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The divide between the haves and have-nots is increasing, expense growth is outpacing revenue growth, donors are still the largest source of revenue for most programs, and sports outside of football and men’s basketball aren’t generating enough revenue to cover expenses. That’s the short version of what the NCAA’s latest revenue and expense report tells us.
Here are some points worth noting:
- Median spending by Football Bowl Subdivision athletic departments was $62.2 million. The largest, however, was $146.8 million (Texas), more than twice the median.
- The gap in revenue generation is even larger than the gap in spending. The median for revenue generation in FBS was $41.9 million, roughly a quarter of the largest revenue generator (Texas) at $169.7 million.
- Median expenses in the FBS have increased by 114.6 percent since 2004; median generated revenue, however, has only increased 83.2 percent since 2004.
- Only 20 FBS athletic departments reported operating in the black, which is down from 23 last year. You can read Chapter 1 (for free!) of my book, Saturday Millionaires, to learn why this is misleading. In short, transactions between athletic departments and universities aren’t exactly arms-length transactions, with the university often taking money off the athletic department’s books.
- Ticket sales and contributions continue to slightly outpace conference distributions in the FBS, accounting for 26 and 25 percent of athletic department generated revenues, respectively. Conference distributions, largely consisting of television contracts and March Madness, accounted for 24 percent. As you can see, those three categories alone account for over three-quarters of athletic department revenue.
- Two-thirds of total expenses for FBS athletic departments came from two sources: coaching salaries (35 percent) and scholarship costs (15 percent).
- Expense per student athlete in the FBS has risen from an average of $63,000 in 2004 to $109,000 in 2013. That number could rise significantly if the O’Bannon decision stands.
- Median student fees in FBS were $2.6 million last year.
Football and men’s basketball continue to be the two sports athletic departments have to rely upon to drive the department’s revenue. Overall, 50 to 60 percent of FBS football and men’s basketball programs have reported a surplus in each of the past nine years.
Meanwhile, no sport outside of football or men’s basketball has a median that falls on the positive side of the scale when you subtract expenses from revenue. I’m always asked if baseball and ice hockey programs make money, and there are a handful that do each year, but overall they lose money too. The median baseball program loses $733,000, while the median ice hockey program loses $511,000. Losses at the median on the men’s side range from $40,000 for rifle to the $733,000 for baseball.
Just one women’s basketball program reported revenue exceeding expenses this year, which matches last year. Overall, the median for women’s sports shows losses that range from $35,000 for bowling to $1.5 million for basketball.
It’s tough to imagine what these numbers will look like if the O’Bannon decision stands and is implemented. Although revenue numbers should rise as television deals grow, and conference networks add to the bottom line in several conferences, the expense side could be impacted mightily by O’Bannon. That impact is multiplied if Title IX does indeed require athletic departments to institute stipends, and possibly trust funds, for all student athletes.
Kristi A. Dosh is a sports business reporter, attorney and author of a book on the business of college football, Saturday Millionaires.