By Kiwi Palmer
If you had to guess, how much money would you think the Boise State Football team contributes to the school every year?
No, really think about it, how much would you guess they profit?
I don’t expect you to have an accurate answer. A lot goes into this question.
Well, once we add together the ticket sales, ad revenue, branding, etc. and subtract the cost of recruiting, equipment, building the stadium, coach salaries, and other things like that, we should have a nice little profit, right?
What if I told you that the Boise State Athletics department loses the school $20 million a year?
If you weren’t already aware of the massive drain that athletics departments are on public colleges, you are probably reeling back right now, thinking something like, “That doesn’t sound right. Do they take into account x, y, and z? It has to be worth it in some regard. There must be immeasurable benefits, they wouldn’t just keep doing it if it was a money pit.”
I promise, everything has been taken into account. Well, I guess that depends who you ask.
Public universities have to release their accounting information, so we can take a look at all of this information online. If you are having a hard time believing me, I’ll put some references for you to take a look at yourself. That being said, it is important to know what you’re looking at, because they do some very clever accounting tricks to make it seem like they are not as severely in the black as they are in reality.
Case in point: ESPN.com. They make a ton of money from the advertising and branding of college athletes and university athletics, and they’re not paying for operations costs, so they are very good at making it seem like everything is fine. On their website, they list a bunch of colleges and their various revenue streams versus operating costs and it appears that they make quite a bit of money. As a disclaimer, they mention that this is not every single source of revenue or expense, and that’s why the numbers don’t add up. However, on top of the revenue streams you would expect, such as ticket sales and alumni donations, they include a mysterious column called “student fees” and the also include university subsidies. This category is labeled simply “university”.
So, wait, in calculating how much the athletics department makes, we’re counting how much money the university gives them to keep it running? As it says on the NCAA website, “While athletics expenses continue to outpace revenue at a majority of schools, institutional funding for athletics has increased at a steady rate.”
And student fees? That’s every student’s fees, from biology majors to people on need based financial aid, who pay general school fees. For most schools, that money goes directly to the coaches salaries, or equipment costs, and other things central to athletics. So in the revenue, we are counting the money getting redirected from students and subsidies redirected from other places on campus to make it look like they’re breaking even?
If we don’t use the money that the students and universities pay to help athletics float, how does it look? Without that counted, only 24 of the couple hundred Football Bowl Subdivision schools broke even or made a little profit according to the 2014 numbers. That’s 10.4%. Okay, let’s use that generous formula. Let’s say we count subsidies and fees as revenue. Does that make it better? That still leaves us with quite a few schools that do not break even.
Jeff Benedict and Armen Keteyian, who wrote The System: The Glory and Scandal of Big-Time College Football in 2013, show that in the 2010-2011 academic year, only 22 of the 120 top-tier football schools broke even or eked out a profit with their athletics department overall. That means even among top tier schools, over 80% lost their university money. The authors also put it this way:
Football Bowl Subdivision (FBS) schools spent more than $91,000 per athlete compared with just over $13,000 per student. Yet students across the country faced steep tuition hikes and increased fees.
As we know, those fees go right to athletics department. At Boise State, $12.4 million in university subsidies went to football, and the football department still lost about $500,000. When we add all the other sports that don’t make the money that Bose State football does, we get a deficit that has gotten to more than $20,000,000 in recent years.
They keep these other sports running, because they have to. The NCAA minimum number of sports in which your school must participate is 14.
Auburn athletics reported $13.6 million deficit in 2013-2014. UC Berkeley lost $22 million the same year.
My question is, how long can this last?