Spreading the wealth

Jon Solomon has a typically good piece out tracing revenue increases in D-1 athletics since 2005 and tracking those against increases in spending on salaries and scholarships over the same time.  The results shouldn’t be that surprising to you.

Seventy-one percent of the public BCS schools experienced higher expense increases on coaches/staff pay than scholarship costs over the past seven years. Meanwhile, 60 percent of non-BCS schools spent a higher rate on scholarship costs, illustrating the haves vs. have-nots debate.

Among athletics departments that reported at least $35 million in total revenue last year, 67 percent saw higher increases on coach/staff pay. That number was 40 percent for schools with less than $35 million. The figure stayed at 40 percent even for the 35 schools under $10 million in athletic revenue last year.

The explanation for that is about what you’d expect, too.

Scholarship costs can be a function of how fully funded an athletics department is and how fast a university raises tuition. Since many wealthier schools are fully funded in sports they offer, new revenue goes elsewhere, often to employees and facilities. The analysis suggests that’s happening with many lower-resourced schools, too.

According to the NCAA, salaries/benefits make up 34 percent of athletics department costs. That’s followed by scholarships (15 percent) and facilities (14 percent).

But here’s something interesting.

There were many schools with higher spending rates on scholarships than salaries. Although they tend to be lower-resourced universities, examples of wealthy schools with a higher rate of scholarship costs include Ohio State, Texas A&M, Oklahoma, Tennessee, Iowa and Georgia.

Solomon’s compiled a chart of all the schools here.  Georgia’s revenues since ’05 have only increased by about one-third (the lowest rate of increase of the eleven SEC schools listed, by the way), but salaries and scholly costs have increased about twice as fast, with the latter rate of increase being just slightly more than what the coaches got.

I suspect Solomon’s analysis explains much about Georgia’s spending.  Tuition hikes are behind the scholarship spending, which makes that something the school has no control over, while salary increases are part of life in the SEC these days.  And the slowed rate of revenue growth may have something to do with McGarity’s relative frugality on the salary front.

It’ll be worth revisiting these numbers in a few years after the revenue streams from the new broadcast deal and the new postseason deals have kicked in.

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3 Comments

Filed under Georgia Football, It's Just Bidness

3 responses to “Spreading the wealth

  1. “Typically good piece”

    Chuckle.

    • You don’t like Solomon? I think his data-driven work is usually quite solid.

      Sure beats reading Scarbinsky, anyway…

      • Eh, agenda driven data analysis can usually be spun several different ways.

        I’m not a fan of Scarbinsky’s writing either, but have you ever listened to his morning radio show? It’s actually not too bad. Maybe it’s because the co-host gives a counter balance.

        Have a good day,

        BD