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By David Morrison
david.morrison@news-record.com
News & Record
The chosen few
Since 2005-06, only three ACC public-school athletics programs have reported a profit when student fees and university support are factored out of their revenue pools.
2011-12
Florida State $1.99 million
2009-10
Virginia Tech $968,280
2007-08
Florida State $1.28 million
2006-07
Virginia Tech $3.09 million
Florida State $3.00 million
N.C. State $1.43 million
2005-06
Florida State $1.14 million
Sources: Public-records requests, ESPN.com database.
The ACC's eight public schools have used an average of $8.2 million in student fees and university funds not generated by the athletics dept. over the past five years to help balance athletics budgets.
The average ACC school is spending about $11.3 million mored a year on athletics than it did in 2008 and taking in about $12.3 million.
Imagine you’re the athletics director at Maryland.
Your department generated $68.1 million in revenue during the 2011-12 year. But you will soon be expected to compete with schools such as Ohio State, which generated $142 million, and Michigan, $128.9 million, drawing on twice the resources you can.
And that’s just in your own conference.
John Cheslock, director of the Center for the Study of Higher Education at Penn State, related a similar example from the Southeastern Conference. Ole Miss, generating $42.9 million in revenue, must contend with Alabama ($124.1 million) and Florida ($120.3 million).
“Mississippi’s athletic program wants more to spend on athletics, and their ability to make that argument is aided by Alabama spending more,” Cheslock said. “They can say, ‘You might think a weight room with 20,000 seats is ridiculous, but they have one with 30,000. How can that be ridiculous when it’s 50 percent more than ours?’”
Even at the highest levels of college sports, athletics departments spend not to gain ground but simply to keep up with juggernauts.
Ever-increasing revenue possibilities help smaller athletics programs keep that dream alive, but the constant pressure to compete can also force some to spend beyond their means.
Most athletics departments count on student fees or university support to make their budgets every year. So chances are, if athletics departments spend more than they’re making, more of the burden will fall on the schools — and on the parents writing tuition checks and students taking out loans to pay for it.
Among the reasons Maryland, a 60-year member of the Atlantic Coast Conference, and Rutgers gave for their move to the Big Ten Conference was increased revenue to help bail both athletics departments out of tenuous financial circumstances. Maryland cut seven sports in summer 2012 because rising expenditures were outpacing money that was coming in. USA Today found that Rutgers spent more than $115 million in university and student-fee funds to augment its athletics spending from 2006 through 2010.
But will all the added money necessarily push these schools — and other major programs that are sharing in a growing gold mine for college sports — to be more fiscally responsible?
“It’s keep up with the Joneses: ‘You just got this? We need that,’ ” said Robert Malekoff, chairman of the Department of Sport Studies at Guilford College. “You have to ask yourself, ‘At what point is some of this ridiculous?’”
Doling out funds
Most of the average athletics department’s expenditures go to three things: athletic student aid; coach and staff salaries and benefits; and facility maintenance, rental and improvements.
Student aid remains fairly consistent through the years, though it rises with tuition costs at the university.
The other two are major growth industries.
If one school in the conference builds an indoor practice facility for football, the other schools want one so they can keep up.
If Alabama’s Nick Saban is making $5.5 million a year in base salary, other schools will want to find comparable funds if they want to lure coaches of comparable quality.
And then, if a coach doesn’t produce results quickly enough, a university might fire him before his high-dollar contract is up. It then must find funds to pay his severance if they fire him before his contract runs out.
The ACC’s eight public schools used an average of 21.5 percent of their expenses, more than $15 million, on coaches and support staff in 2011-12, according to revenue and expense reports obtained through public records requests. Georgia Tech, Maryland, North Carolina and Virginia each paid more than $1 million in severance.
“It really separates the haves from the have-nots. Or maybe it’s better to call them the “wannabes,’ ” said Todd Turner, who served as athletics director at N.C. State, Connecticut, Vanderbilt and Washington. “They see the branding value of being considered alongside of these mega-universities, and it’s just put them in a woeful state in terms of managing their budget.”
It’s difficult to avoid the pull of trying to keep pace with schools that have more resources at their disposal.
But at some point, said Wake Forest President Nathan Hatch, you just have to understand who you are.
Wake Forest generated $48.8 million in revenue in 2011-12, according to U.S. Department of Education figures. Florida State generated $100 million.
“You have to be realistic and realize your facilities might not be the same as someone who can create far more revenue, but then I think you have to be more creative in what you do,” Hatch said. “You realize in some ways you’re an underdog. And, in doing well, you take greater satisfaction.”
Self-sufficiency
All 12 ACC athletics departments reported a profit, or at least broke even, in 2011-12, according to information they submitted to the NCAA and U.S. Department of Education.
But when student fees and institutional support are factored out, only Florida State turned a profit ($1.99 million) out of the conference’s eight public schools, according to revenue and expense reports submitted to the NCAA. The four private schools’ itemized expense and revenue reports are not available through public-records requests.
The league’s public schools used an average of $8.9 million in student and school subsidies to buttress their athletics departments in 2011-12, a trend that has held steady for three years.
Maryland used a combined $17.7 million, or 26 percent of its revenue, from student fees and institutional support in 2011-12. It reported a $33,021 profit without the subsidies.
Maryland has derived at least a quarter of its athletics revenue from student fees and institutional support in each of the past four years.
Only two of the eight public university athletics departments, Clemson and Georgia Tech, diverted funds back to their schools for nonathletic uses in 2011-12.
“Colleges and university athletic departments are not based on a profit model,” said Richard Southall, associate professor of sports administration at UNC-Chapel Hill and director of the College Sport Research Institute. “They don’t have shareholders. They don’t have money that they must return to shareholders. What happens is you have pressure to increase facilities.
“I don’t begrudge a college coach getting all the money he or she can make. That’s how things work in a market economy.”
Major-conference programs maintain a higher level of self-sufficiency than those in the lower tiers, due in large part to more plentiful opportunities to generate revenue through media deals, contributions and licensing.
But the search for enough revenue to keep up with competitors still leads them to rely on student and institutional funds for support.
“Does Harvard feel like it has enough money with an endowment that’s bigger than some countries’ GDP?” asks Penn State’s Cheslock, who co-wrote a paper on the trickle-down effect of expenditures in college athletics. “Some of the wealthiest individuals in the world, do they feel like they have enough money?
“The real trick with athletics is, how do you figure out how much spending is enough? It’s not based on some absolute figure; it’s based on how much I have relative to my competition.
“That is sort of the idea of an arms race. There’s never really enough because you’re always trying to out-compete.”
david.morrison@news-record.com
News & Record
The chosen few
Since 2005-06, only three ACC public-school athletics programs have reported a profit when student fees and university support are factored out of their revenue pools.
2011-12
Florida State $1.99 million
2009-10
Virginia Tech $968,280
2007-08
Florida State $1.28 million
2006-07
Virginia Tech $3.09 million
Florida State $3.00 million
N.C. State $1.43 million
2005-06
Florida State $1.14 million
Sources: Public-records requests, ESPN.com database.
The ACC's eight public schools have used an average of $8.2 million in student fees and university funds not generated by the athletics dept. over the past five years to help balance athletics budgets.
The average ACC school is spending about $11.3 million mored a year on athletics than it did in 2008 and taking in about $12.3 million.
Imagine you’re the athletics director at Maryland.
Your department generated $68.1 million in revenue during the 2011-12 year. But you will soon be expected to compete with schools such as Ohio State, which generated $142 million, and Michigan, $128.9 million, drawing on twice the resources you can.
And that’s just in your own conference.
John Cheslock, director of the Center for the Study of Higher Education at Penn State, related a similar example from the Southeastern Conference. Ole Miss, generating $42.9 million in revenue, must contend with Alabama ($124.1 million) and Florida ($120.3 million).
“Mississippi’s athletic program wants more to spend on athletics, and their ability to make that argument is aided by Alabama spending more,” Cheslock said. “They can say, ‘You might think a weight room with 20,000 seats is ridiculous, but they have one with 30,000. How can that be ridiculous when it’s 50 percent more than ours?’”
Even at the highest levels of college sports, athletics departments spend not to gain ground but simply to keep up with juggernauts.
Ever-increasing revenue possibilities help smaller athletics programs keep that dream alive, but the constant pressure to compete can also force some to spend beyond their means.
Most athletics departments count on student fees or university support to make their budgets every year. So chances are, if athletics departments spend more than they’re making, more of the burden will fall on the schools — and on the parents writing tuition checks and students taking out loans to pay for it.
Among the reasons Maryland, a 60-year member of the Atlantic Coast Conference, and Rutgers gave for their move to the Big Ten Conference was increased revenue to help bail both athletics departments out of tenuous financial circumstances. Maryland cut seven sports in summer 2012 because rising expenditures were outpacing money that was coming in. USA Today found that Rutgers spent more than $115 million in university and student-fee funds to augment its athletics spending from 2006 through 2010.
But will all the added money necessarily push these schools — and other major programs that are sharing in a growing gold mine for college sports — to be more fiscally responsible?
“It’s keep up with the Joneses: ‘You just got this? We need that,’ ” said Robert Malekoff, chairman of the Department of Sport Studies at Guilford College. “You have to ask yourself, ‘At what point is some of this ridiculous?’”
Doling out funds
Most of the average athletics department’s expenditures go to three things: athletic student aid; coach and staff salaries and benefits; and facility maintenance, rental and improvements.
Student aid remains fairly consistent through the years, though it rises with tuition costs at the university.
The other two are major growth industries.
If one school in the conference builds an indoor practice facility for football, the other schools want one so they can keep up.
If Alabama’s Nick Saban is making $5.5 million a year in base salary, other schools will want to find comparable funds if they want to lure coaches of comparable quality.
And then, if a coach doesn’t produce results quickly enough, a university might fire him before his high-dollar contract is up. It then must find funds to pay his severance if they fire him before his contract runs out.
The ACC’s eight public schools used an average of 21.5 percent of their expenses, more than $15 million, on coaches and support staff in 2011-12, according to revenue and expense reports obtained through public records requests. Georgia Tech, Maryland, North Carolina and Virginia each paid more than $1 million in severance.
“It really separates the haves from the have-nots. Or maybe it’s better to call them the “wannabes,’ ” said Todd Turner, who served as athletics director at N.C. State, Connecticut, Vanderbilt and Washington. “They see the branding value of being considered alongside of these mega-universities, and it’s just put them in a woeful state in terms of managing their budget.”
It’s difficult to avoid the pull of trying to keep pace with schools that have more resources at their disposal.
But at some point, said Wake Forest President Nathan Hatch, you just have to understand who you are.
Wake Forest generated $48.8 million in revenue in 2011-12, according to U.S. Department of Education figures. Florida State generated $100 million.
“You have to be realistic and realize your facilities might not be the same as someone who can create far more revenue, but then I think you have to be more creative in what you do,” Hatch said. “You realize in some ways you’re an underdog. And, in doing well, you take greater satisfaction.”
Self-sufficiency
All 12 ACC athletics departments reported a profit, or at least broke even, in 2011-12, according to information they submitted to the NCAA and U.S. Department of Education.
But when student fees and institutional support are factored out, only Florida State turned a profit ($1.99 million) out of the conference’s eight public schools, according to revenue and expense reports submitted to the NCAA. The four private schools’ itemized expense and revenue reports are not available through public-records requests.
The league’s public schools used an average of $8.9 million in student and school subsidies to buttress their athletics departments in 2011-12, a trend that has held steady for three years.
Maryland used a combined $17.7 million, or 26 percent of its revenue, from student fees and institutional support in 2011-12. It reported a $33,021 profit without the subsidies.
Maryland has derived at least a quarter of its athletics revenue from student fees and institutional support in each of the past four years.
Only two of the eight public university athletics departments, Clemson and Georgia Tech, diverted funds back to their schools for nonathletic uses in 2011-12.
“Colleges and university athletic departments are not based on a profit model,” said Richard Southall, associate professor of sports administration at UNC-Chapel Hill and director of the College Sport Research Institute. “They don’t have shareholders. They don’t have money that they must return to shareholders. What happens is you have pressure to increase facilities.
“I don’t begrudge a college coach getting all the money he or she can make. That’s how things work in a market economy.”
Major-conference programs maintain a higher level of self-sufficiency than those in the lower tiers, due in large part to more plentiful opportunities to generate revenue through media deals, contributions and licensing.
But the search for enough revenue to keep up with competitors still leads them to rely on student and institutional funds for support.
“Does Harvard feel like it has enough money with an endowment that’s bigger than some countries’ GDP?” asks Penn State’s Cheslock, who co-wrote a paper on the trickle-down effect of expenditures in college athletics. “Some of the wealthiest individuals in the world, do they feel like they have enough money?
“The real trick with athletics is, how do you figure out how much spending is enough? It’s not based on some absolute figure; it’s based on how much I have relative to my competition.
“That is sort of the idea of an arms race. There’s never really enough because you’re always trying to out-compete.”
