What Do Universities Do With The Money Sports Brings In
Does College Football Make Coin?
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Mary Gormandy White
Mary currently teaches at a community college. She has worked in higher educational activity assistants and has taught in college and university settings.
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M.A., SHRM-SCP, SPHR - College Instructor
The question of whether or not college football makes coin is a complicated one. While at first glance, it may seem the answer is obvious, it's important to realize college football isn't limited to the big-name schools with high profile programs and championships. Even schools that have in a lot of football-related coin aren't necessarily bringing in more than than they spend.
Sources of Higher Football Acquirement
College football programs can generate revenue in a diverseness of ways, including ticket purchases, corporate sponsorships, endorsements, licensing fees, boob tube contracts, alumni donations, capital campaigns, educatee athletic fees and, for the elite few, bowl game fees or playoff/championship revenue.
A lot of coin changes easily in the world of college football, particularly in the big programs within the powerhouse conferences. However, taking in a significant amount of football game money doesn't mean a school's football programme is actually profitable. Profitable college football programs are not the rule; they are the exception. Equally pointed out in the International Business Times, "Nigh public universities lose coin on their able-bodied programs."
Large-Time Perspective
A 2015 Washington Post article states, "Big-time college sports departments are making more money than ever earlier... but many departments are also losing more than money than always." This is truthful for both schools that take in a lot of money, every bit well every bit those that take in less. Losses can exist attributed to depression acquirement in some cases, merely in others, it is related to calculation high-dollar scoreboards, expensive stadium upgrades, boosted administrative positions, corporate jets for recruiting trips and more.
Big-Time Revenue
According to CBS Sports, the 65 schools in the "Power Five" (i.e., wealthiest) athletic conferences, which are the Southeastern Conference (SEC), Big x, PAC- 12, Big 12 and Atlantic Coast Conference (ACC), paired with Notre Dame, took in $six.3 billion in total athletic department revenue for the 2014/2015 season. The vast majority of this revenue can be attributed to football.
Out of these 65 schools, 28 raked in more $100 million each (in terms of total athletic revenue - non merely football), based on CBS' analysis of data from the U.S. Department of Education'due south Part of Postsecondary Education. As of the 2011/2012 season, only 11 schools brought in more than than $100 1000000 in able-bodied acquirement. That is a huge increment, largely associated with what CBS describes as "the infusion of College Football Playoff dollars and increased boob tube money." (The College Football Playoffs began with the 2014/2015 season).
According to Forbes, the University of Texas is the but school to ever pass the $100 meg acquirement marking just for football. The 2014/2015 season marked the fourth yr the Longhorns exceeded this benchmark, bringing in $121 million that year. This figure far exceeds the football game program's expenses and contributes significantly to overall athletic expenses.
Spending Money to Brand Coin
The Washington Post analyzed NCAA financial reports for 48 schools in the "Power 5" briefing. Their analysis revealed that athletic section revenue at those schools increased from 2.half dozen billion to 4.5 billion from 2004 to 2014. However, 25 of these 48 departments actually lost money (i.east., operated in the crimson) in 2014.
The Washington Post highlights primal expenditures to illustrate spending:
- Auburn Academy spent $13.9 one thousand thousand on a new scoreboard.
- Rutgers spent $102 million to aggrandize its football stadium.
- Academy of California at Berkley added a $23.iv million mortgage associated with able-bodied buildings.
- University of Wisconsin increased maintenance spending on athletic facilities by $27.7 one thousand thousand (more than a 300% increase).
Beyond the Big-Time
Of course, at that place are thousands of college football game programs outside the "Power Five" that don't have anywhere almost the revenue-generating potential of the large-time programs. While they exercise bring in money, they aren't raking in a profit, nor are they expected to exercise so. As stated in the Washington Post article, "for the vast majority of the more than than 4,000 colleges and universities in America, athletic departments should lose money." They are intended to enrich the collegiate experience for students.
Money-Making Myth
According to the American Council on Education (ACE), the notion that higher sports makes money is a myth. Even where football game does turn a turn a profit, that coin often goes to comprehend expenses associated with other sports. According to the Texas Tribune, "a successful football squad tin prop upward an entire athletic department." Still, more oftentimes than not, college athletics programs are not fully cocky-supporting, fifty-fifty with football money. In a 2014 news release, the NCAA indicated able-bodied department expenses exceeded acquirement in all only xx Football Bowl Subdivision (Sectionalization I) schools and in all Partitioning Two and Three schools.
Self-Sustaining College Athletic Programs
In 2012, ACE indicated only 8 public university able-bodied programs either covered their expenses (across all athletic programs; non but football) or bankrupt fifty-fifty. These eight schools, that ACE describes as an "elite fraternity," are members of the Big Ten, Big 12 and SEC. They are:
- Louisiana State University (LSU)
- Pennsylvania Country University (Penn Country)
- Academy of Georgia
- Academy of Iowa
- Academy of Michigan
- University of Nebraska
- University of Oklahoma
- University of Texas
At these schools, able-bodied programs brought in enough revenue in 2012 to encompass their expenses without requiring financial support from the university. According to ACE, most of that money can exist attributed directly to football.
All-time Doesn't Mean Most Profitable
Information technology'south interesting to note the schools included in ACE's listing of universities with self-sustaining athletic programs aren't the commencement ones to come to heed when thinking about the top football programs. None of these schools have won championships lately. The last i from this list to win a championship is LSU, and that was in 2007.
Since 2007, the national championships have been won by the University of Alabama, Ohio Country Academy, Florida Country University, Auburn University and the University of Florida. These schools all bring in meaning revenue associated with football, all the same their overall athletic programs nonetheless require academy support.
Interesting examples cited on EthosReview.org include:
- Academy of Alabama: The Academy of Alabama's football acquirement was $110 one thousand thousand for the 2011-2012 flavor, against $41.five million in operating expenses and $13 million in debt-service costs. And then, the football game program brought in a tremendous amount of acquirement - much more than it cost to operate. Nevertheless, a lot of that money went to subsidizing the school's other athletic programs. With the exception of basketball, all other athletic programs at the school operated at a loss.
- Marshall University: At this much smaller school, the costs and expenses associated with football are shut to being even for the 2011-2012 flavour. Even though the football game program brought in a much smaller corporeality of revenue than Alabama'due south plan, the sport sustained itself. The schoolhouse brought it in just over $7,760,000 in football revenue against just nether $vii,100,000 in football expenses. Some football money was bachelor to offset other able-bodied programs, but but a small amount equally compared to a bigger-name, higher-acquirement-generating football school.
Other Financial Factors to Consider
Analyzing the dollars and cents directly attributed to football and athletic plan expenses and revenues is important, but when considering if college football game makes coin information technology is besides important to consider other impacts. As an Inside Higher Ed article points out, having a successful football plan tin lead to an increment in applications for admission to the school. A USA Today article also points out football provides a unifying factor for the student body, impacting "campus culture" and leading to displays of "school pride."
These factors can have a positive financial touch on schools in terms of increased enrollment, improved student retention and (down the road) alumni donations. This, of class, doesn't show in an objective assay of the money flowing in and out of the athletic department.
The Financial Bear upon of College Football
The reality is college football is a money-maker in some schools, but not all. The schools that don't make money from the sport far outnumber those that do. Information technology's important to note bringing in money and making coin (i.e., turning a profit) are two different things. Simply put, looking at dollars and cents doesn't tell the full story of the value of higher football.
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