[Vision2020] Do college athletics make money?

[Joan Opyr]

Dear Visionaries:

I'm forwarding the following from an NCAA website.  I wish I could tell you 
which one, but I'm trying to work out the kinks of an unfamiliar internet 
dial-up.  The web address info isn't displayed at the top of the file on the 
browser I'm using; God only knows why.  (I'd ask Him, but I can't decide if 
he's one person, three, or a baker's dozen.  God: Sophia or Sibyl?  You be 
the judge.)

Anyhow, this piece is from 1996.  Perhaps there's something more recent out 
there?

Joan Opyr/Auntie Establishment

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Tuesday, November 19, 1996
Kathryn M. Reith
Director of Public Information

COLLEGE SPORTS: PROFITS OR LOSSES?

OVERLAND PARK, KANSAS---Are college athletics departments making a profit or 
are they losing money? For Division I-A colleges and universities, the 
answer may be: both. For other Division I institutions along with those in 
Division II, the answer is: losing money. For Division I-A football and 
men's basketball, the answer is usually making money. For football and 
basketball in other divisions and for other sports, the answer is usually 
losing money.

An NCAA study, "Revenues and Expenses of Intercollegiate Athletics of 
Division I and II Intercollegiate Athletics Programs," by Daniel L. Fulks, 
Ph.D., CPA, from the University of Kentucky School of Accountancy, details 
the financial state of intercollegiate athletics in 1995 and updates a 
similar survey from 1993.

The study shows that Division I-A is the only subdivision or division of the 
NCAA in which the average athletics department operates at a profit. In 
1995, the average I-A athletics program brought in about $15.5 million in 
revenue while spending about $14.3 million, creating an average profit of 
about $1.2 million. That number is up from the average profit of $660,000 in 
1993, the last time member schools were surveyed.

But the profit cited includes money provided by the college or university to 
operate the athletics department, or institutional support. If institutional 
support is removed from the budget, the result is a $237,000 deficit, up 
from a $174,000 deficit in 1993.

In addition, only 46 percent of Division I-A schools were profitable after 
institutional support is removed, compared with 51 percent in 1993.

Division I-AA and I-AAA programs showed a similar pattern to each other. The 
average I-AA program showed a deficit, considering all income sources, which 
was $469,000 in 1995, down from $618,000 in 1993. With institutional support 
removed, the average deficit was $1.67 million, up from $1.41 million in 
1993. For I-AAA, the average program had a $388,000 deficit, compared to 
$658,000 in 1993. Without institutional support, the numbers were $1.46 
million in 1995, up from $1.13 million in 1993.

Division II athletics departments also showed a similar pattern. The average 
Division II program with a football team showed a deficit, which was 
$221,000 in 1995, down from $432,000 in 1993. The average Division II 
program without football also showed a deficit, $177,000 in 1995, down from 
$210,000 in 1993. Without institutional support, athletics programs with 
football lost $842,000 in 1995, up slightly from $805,000 in 1993, and 
programs without football lost $584,000 in 1995, again up from $503,000 in 
1993. The average I-A program generated more income from ticket sales than 
any other source, or 29 percent of its revenue, down from 33 percent in 
1993. The next largest sources were donor contributions, 15 percent, and 
institutional support, nine percent. Conference distributions, student 
activity fees and radio/television rights each accounted for seven percent 
of revenues in Division I-A. Note that those conference distributions may 
also include NCAA distributions that go first to the conference and are then 
distributed among its members.

Salaries and benefits were the largest expense at 31 percent, unchanged from 
1993. Scholarships are the second-largest expense, at 17 percent. More 
expenditures are directed at men's sports than women's, 48 percent to 15 
percent, but that gap is narrowing. The 1993 numbers were 54 percent for 
men's sports and 14 percent for women's, respectively. The rest of expenses 
are administrative and not assigned to one gender.

In football, the average Division I-A program reported a profit in 1995, up 
two percent from 1993. The average football profit reported was $3.9 
million. The percentage of schools reporting a deficit decreased from 33 
percent to 30 percent, and the size of the average deficit also declined, 
from $1,020,000 to $969,000.

Division I-A men's basketball also showed an increase in the percentage of 
teams making a profit, up to 70 percent in 1995 from 67 percent in 1993, and 
that average profit rose from $1.6 million in 1993 to $1.9 million. The 
percentage of schools losing money on their basketball team declined from 32 
percent in 1993 to 29 percent in 1995 and the average deficit stayed about 
the same.

Division I-A women's basketball showed an increase in those making profits, 
from two percent in 1993 to six percent in 1995. Average profits increased 
from $57,000 to $67,000. The percentage losing money decreased from 95 
percent in 1993 to 91 percent but the average deficit increased from 
$373,000 in 1993 to $459,000 in 1995.

A majority of teams in those three sports lost money in Divisions I-AA and 
I-AAA, as well as in Division II.

Just 10 percent of I-AA football teams made an average profit of $351,000, 
while 84 percent had average deficits of $632,000. The good news is that the 
10 percent creating a profit is twice the amount in 1993 and teams reporting 
a deficit dropped from 95 percent in 1993 to only 84 percent in 1995. 
Another six percent reported breaking even.

Nineteen percent of I-AA men's basketball teams reported a profit, compared 
to 24 percent in I-AAA. That percent in I-AA was unchanged from 1993, while 
it was up five percent in I-AAA.

Only two percent of women's basketball teams in I-AA showed a profit, down 
from three percent in 1993. Women's basketball in I-AAA, on the other hand, 
showed an increase, from four percent making a profit in 1993 to nine 
percent in 1995.

All three sports in Division II institutions with football showed an 
increase in the percent of teams reporting a profit. For Division II 
football teams, the increase was from 11 percent to 17 percent. The 
percentage of men's and women's basketball teams at Division II institutions 
with football reporting a profit increased by eight percent, from 11 to 18 
for men and from five to 13 for women. Basketball showed a smaller 
improvement in Division II institutions without football. Men's teams 
reporting a profit increased from 10 to 13 percent and women's teams 
increased from two to seven percent.

A separate report by Dr. Fulks on revenues and expenses in Division III 
colleges and universities is also available from the NCAA.

The NCAA is a membership organization of colleges and universities that 
participate in intercollegiate athletics. The primary purpose of the 
Association is to maintain intercollegiate athletics as an integral part of 
the educational program and the athlete as an integral part of the student 
body. Activities of the NCAA membership include formulating rules of play 
for NCAA sports, conducting national championships, adopting and enforcing 
standards of eligibility and studying all phases of intercollegiate 
athletics.

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