The latest USA Today report on college athletic departments’ finances, for the 2016-7 fiscal year, has emerged. Good news for Georgia: it’s one of seven D-1 schools with revenues exceeding $150 million, something I expect to continue with a bang in the next fiscal cycle. Even better, it ranks nineteenth in expenses, which means it turned close to a $40 million profit even after transferring $4,500,000 back to the school.
Before some of you go there, I have no problem with turning a large profit, as long as the money is spent wisely in the pursuit of excellence. (Well, other than charging student fees when your profit margin exceeds 25%, that is.) But it also means that I do think whining about the sanctity of the reserve fund in times like these as a defense to implementing a master plan for athletic facilities is weak beer.
It’s not the worst thing in the world, of course. This is worse.
A few weeks before the football season last August, a Washington State University vice president sent an urgent message to the athletic director.
The topic was deficit spending in the athletic department, which had ballooned to a cumulative debt to the university of $67 million…
The messages were obtained by USA TODAY Sports as part of a public-records request and are part of an ongoing financial drama that has unfolded in some parts of major college sports – not just at Washington State, but at other schools that might be described as the underclass of the upper class. Besides WSU, these include the University of California and other Power 5 conference institutions that have dug their own holes and struggled to avoid getting buried in them.
They are not broke. They simply overspent their means by tens of millions as they tried to keep up with their richer rivals in coaches’ pay and opulent facilities. And though such pressure to compete is nothing new, their deficit spending and subsidies have accelerated to unprecedented heights since 2011, even as their collective revenues have shot up by nearly 50% since then, largely because of lucrative television and media contracts.
Their problem is a bit of a paradox.
Not really. But it does much to explain the current state of whoredom that characterizes college sports.
These schools make more money than ever. Since they began emerging from the Great Recession in fiscal year 2011, their combined revenue has rocketed from $5.6 billion to $8.3 billion in 2017, not adjusted for inflation. That’s according to data for the 108 public schools tracked by USA TODAY Sports in the Football Bowl Subdivision (FBS), in partnership with Syracuse University’s S.I. Newhouse School of Public Communications.
Yet instead of being financially relieved by this revenue boom, 18 of them burned through it and still posted annual deficits of more than $1 million in fiscal year 2017, compared to seven at that level in 2011. WSU athletics has run deficits for seven straight years, drawing scrutiny from state legislators.
They don’t know how to spend wisely; they only know that they believe they have to spend, and spend blindly, to be competitive.
And the department deficit problem he inherited is projected to be even worse than those e-mails described last year – $85 million in debt to the university by 2023. That debt was rung up largely because of spending increases in coaching pay and facilities for football – namely $130 million to renovate the football stadium and build a five-story football headquarters.
“He took this place out of the stone ages,” Chun said of Moos and the spending he pushed to modernize Cougar athletics.
Moos said “everybody was fully aware” of the debt WSU was taking on with these investments at the time, including the state legislature and WSU regents. “It’s like somebody woke up in the middle of the night and said ‘I’m shocked. I’m shocked that we have a deficit,’ ” Moos told USA TODAY Sports. If WSU hadn’t invested like this, he said the Cougars “would have been left in the dust.”
Thinking like this is why I chuckled the other day when a commenter defended McGarity by saying he acts just like every other college AD. Dude, that’s not a compliment.
There’s only one cure for their illness and that’s more
cowbell money — from the students…
WSU even hopes to convince students to approve a fee increase to fund athletics, up from the current $25 per student per semester to fund its football stadium renovation.
… the fan base and from, most importantly, television. Even if and when they get it, though, it won’t stop an arms race that most schools can’t afford. The trend, if anything, is accelerating away from them.
– What kind of growth do this year’s figures reflect? Not adjusting for inflation, consider the following table showing the number of schools at certain benchmark figures over time:
Total expense $80 million+ $100 million+ $120 million+ $140 million+
2017 51 32 17 7
2012 25 10 2 0
2007 5 1 0 0
Total revenue $80 million+ $100 million+ $120 million+ $140 million+
2017 51 31 23 15
2012 28 13 5 3
2007 9 3 0 0
– The gap between the top revenue total and the bottom revenue total has opened wider than ever.
In 2017, Texas had the greatest at $214.8 million, Alabama A&M the lowest at $3.3 million.
In 2012, Texas had the greatest at $163.3 million, New Orleans the lowest at $3.1 million.
In 2007, Ohio State had the greatest at $109.4 million, Coppin State the lowest at $2 million.
There’s never enough. There never will be enough.