Income from college sports programs continues to soar

Fitzgerald Cecilio – 4E Sports Reporter

Indianapolis, IN, United States (4E Sports) – Despite the economic downturn, revenues from sports programs of top public colleges continue to flourish with payroll increasing to an average of 40 percent.

Total revenue from the NCAA’s Football Bowl Subdivision has increased by about a third to nearly $8 billion through ticket sales, donations and lucrative television contracts.

“We thought college football was big time 30 years ago,” said Brian Goff, an economics professor at Western Kentucky University who also writes a sports money blog for Forbes. “In some ways, it was just getting going.”

Income from college sports has become an issue after football players at Northwestern University voted on whether to unionize.

Aside from that, a trial is scheduled to begin in June to decide whether college athletes are entitled to any of the money made off of their names, images and likenesses.

The NCAA is also facing a third major threat in the form of an antitrust lawsuit that charges it with unlawfully capping player compensation at the value of an athletic scholarship.

Operating revenues at all schools increased by about 32 percent from academic year 2007-08 to 2012-13. The nation’s wealthiest athletic department program, the University of Texas, brought in $166 million in revenue in 2012-13.

The Texas Memorial Museum at the University of Texas is facing salary cuts of $507,000, leaving it with a budget of $109,000. The top-earning Texas athletic department had a surplus of $18.9 million in 2012-13 and spent $1.3 million on its cheerleaders and spirit squad. But it also sent $9.2 million back to the university’s general fund.

At the University of Nebraska, officials are sweating over a $4.7 million deficit, and the chancellor has suggested reducing planned raises at the university and making other cuts. In contrast, the athletic department enjoyed a $5.2 million surplus but did do its share to help, transferring about $2.7 million to the university in 2012-13.

In 2012-13, 20 public schools showed a surplus of earned revenue, a number that hasn’t changed much over the past few years. For six schools — Ohio State, Alabama, Oklahoma, Texas, Florida and Oregon — the surplus was in excess of $15 million.

Ohio State showed a surplus of almost $24 million, but that does not factor in $16.6 million in debt service that the department is paying on bonds issued to fund renovations at Ohio Stadium and to build a new aquatics center, along with some smaller building projects, said associate athletics director for finance Pete Hagan.

Hagan said not including debt service was an oversight that should have been included in the expense figures submitted to the NCAA. He said that his department plans to address the oversight.

Sports economists say the actual number of schools with a surplus is probably far higher, as they point to several ways athletic departments can pad expenses to hide extra revenue.

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