Because that’s where the money is.

I’m sure this will come as a complete shock to you.

NCAA revenues and expenses data from the 2009-10 fiscal year show a widening gap between schools with self-sufficient athletics programs and schools that rely on institutional subsidy to balance their athletics budgets.

The most recent annual report indicates that “generated revenues” (ticket sales, NCAA and conference distributions, concessions, contributions, media rights and other sources not including institutional or governmental support, or student fees) exceeded expenses at 22 Football Bowl Subdivision institutions, eight more than during the previous fiscal year.

The median net surplus at those 22 institutions was about $7.4 million (ranging from $211,000 to $41.9 million), compared with the median net deficit for the remaining Football Bowl Subdivision schools of about $11.3 million. That gap – almost $19 million – is significantly higher than the $15.6 million separation in 2009.

The rich get richer.  That’s what 21st century America is all about, my friends.  And to an extent, there’s nothing wrong with that.  Except this does seem a little tacky.

… Much of the rise in athletics revenue came from an escalation in money generated through multi-media rights deals, donations and ticket receipts, but schools also continued increasing their subsidies from student fees and institutional funds.

Altogether in 2010, about $2 billion in subsidies went to athletics programs at the 218 public schools that have been in the NCAA‘s top-level Division I over the past five years. Those subsidies grew by an inflation-adjusted 3% in 2010. They have grown by 28% since 2006 and account for $1 of every $3 spent on athletics.

Belt-tightening is for suckers.

Meanwhile, if you are the athletic director at a school that isn’t playing D-1 football, what are you thinking when you see this chart?

You’re probably thinking something along the lines of “I’ll gladly take my chances.  Where do I sign up”?  Of course, that’s one reason the NCAA has made the admissions process considerably more expensive.

But don’t worry, have-nots.  Mark Emmert is on the mother.

… NCAA President Mark Emmert said the disparity this report shows among athletics programs in Division I is cause for concern and likely will drive the agenda at a presidential retreat Emmert is convening in August.

“That gap in revenue, either from self-generated or institutionally allocated sources, is significant,” Emmert said. “Indeed, it is coming to redefine what we mean by competitive equity. This will undoubtedly be a discussion point at the August presidential retreat.”

Keep in mind that Emmert is the same fellow who thinks that Jim Delany’s musings about extending full cost scholarships to student-athletes – as enormous a threat to the budgets of non-BCS conference schools as you could imagine – has merit.  How he can balance that with a concern about “competitive equity” should be a neat trick.  (So should Jim Delany’s keeping a straight face as Emmert attempts to do so.)

That presidential retreat should be a real hoot.

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7 Comments

Filed under It's Just Bidness, The NCAA

7 responses to “Because that’s where the money is.

  1. Go Dawgs!

    Tacky? Uh, yeah. The second you get out of the red, you should cut the student activity fee. If you’re still in the black, time to start giving back any funds from the school itself. Universities are struggling. I am one hundred percent for funding athletics. But if you are profitable, then you really shouldn’t keep state money in your surplus.

    • Gern Blanski

      +1
      I would also be in favor of eliminating student activity fees before extending the scholarship to cover the costs of full attendance. Why should the fellow students help fund programs that give their more athletic colleagues full rides + living expenses.

  2. Nancy Pelosi

    “The rich get richer. That’s what 21st century America is all about, my friends.”

    Exactly! We need to tackle this disparity head on…

    http://thehill.com/blogs/on-the-money/801-economy/166599-pelosis-net-worth-rises-62-percent-

  3. HK

    First of all, the only problem with capitalism in America is that there aren’t enough capitalists.

    Anyhow, about that huge fee for applying for D-1 status. Does that apply just to schools moving up in general from D-2 to D-1, or just in the sport of football. As in, Mercer is D-1 in every sport, but hasn’t had football since the 40′s. They start back with football in 2013 in the Pioneer league, which is D-1 but doesn’t give athletic scholarships. Might that fee have something to do with that? I haven’t heard anything like that, just figured it was to appease some professors who don’t understand the value of a football program to a school, but if not giving scholarships avoids the fee that would also make sense. (If you can make any sense at all of not giving scholarships.)

    If anyone can enlighten me, please do.

  4. Toom

    If ‘generated revenue’ is ticket sales, NCAA and conference distributions, concessions, contributions, media rights and other sources not including institutional or governmental support, or student fees, what would be added to get you to ‘total revenue’? Whatever that is, it is 3x the ‘GR’ for FCS and 5x for non D1.

    Also, if you can run a program for $13 mil, why would you spend more as a FBS school knowing you will lose money?

    My point: I understand the arms race where you spend more to match what other people are doing IF YOU CAN AFFORD TO.
    I also understand trying to run your program cost-effectively to match your smaller revenues.
    But I don’t understand those with smaller revenues spending like they’ve got it to spend that equates to $9+ million!

  5. 69Dawg

    Lets face it the guys in charge of some of these marginal programs are public sector employees and they will spend money until you are dry. These AD’d need to go to the President and break the bad news, we need to step down in Division not up.

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