Friday, May 16, 2008

Number Of Profitable Football Programs Increased

To 19? WTF?

Without subsidies, athletics departments at 19 of the 119 schools in Division I-A (now known as the Football Bowl Subdivision) made money in fiscal 2006 — up from 18 in '05 and '06 — and 16 did so over the three-year period.
With all the emphasis on money and football, and the fact that you (almost?) never hear about programs folding for financial reasons, this sounds like some fuzzy accounting to me.
The report showed that for the 67 I-A football programs that showed a program-generated surplus in fiscal year 2006, the average surplus was nearly $8.8 million, while among the 52 programs that showed a deficit, the average deficit was a little more than $2.5 million.

The report also showed that for the 19 I-A athletic departments that showed a surplus in fiscal 2006, the average surplus was nearly $4.3 million, while among the 99 departments that showed a deficit that year, the average deficit was a little more than $8.9 million.

Both gaps have grown since fiscal 2004.
I'm simply not buying that only 19 football programs make money. With an increasing lineup of bowl games, an ever expanding lineup of televised games, and a D1a list that is actually growing, something has to be off here.
For the study, athletics-generated revenues were defined as those from sources such as ticket sales, conference revenue sharing and donations. School-allocated revenues were those from sources such as student fees and direct and indirect institutional support, including utilities and maintenance.
What is the difference between "athletics-generated" and "school-allocated" revenues? Regardless, it doesn't sound like this is taking into account the large boost home games give to the local economy, the way success on the football field can impact the number (and thus quality) of applicants, or, and this I don't get, TV revenue?!?!

Penn State is typically one of the top 15 most profitable programs, netting roughly $26 million a year.

11 comments:

Nick said...

Bowl games actually cost most teams money, especially if they can't fill their ticket allotment.

Paterno Lives! said...

but eveyone gets a wii!

i just can't believe that there are only 19 programs making money, it just can't be true.

Nick said...

Only the players get Wii's or does the coaching staff get hooked up too?

Paterno Lives! said...

looks like the coaches get shafted...this is a couple years old, but the '03 sugar bowl players got all kinds of crap, and everyone else:
"Coaches, athletic directors and other university officials will receive a replica of the Sugar Bowl cup mounted on a cherry-wood platform."

Jeff V said...

That is interesting but probably just the result of non-cash write-offs.

Depreciation is subtracted from EBITDA before taxes and most athletic departments have a TON of things to depreciate (stadiums, practice facilities, gyms, equipment, Joe Paterno's knees--I kid) With that said, depreciation does not involve a cash outflow unlike other expenses so it changes the way profitability looks on paper without really effecting the amount of money in the bank.

This is especially interesting considering that schools in BCS conferences are guarranteed a pretty large chunk of money whether or not they even have a successful season...

Jonny said...

I'm too lazy to read the article...Do they write off every $20,000 scholarship as an expense? OSU has something ridiculous like 35 varsity sports. I'd think that would skew the bottom line a bit. (along with the depreciation -- noted above)

Jonny said...

Oh yeah, Go Cavs

Paterno Lives! said...

The article doesn't do any explaining about how the numbers were computed, I've quoted just about everything of substance.

OSU does have the most varsity sports of any schoool, I've read that somewhere, but this is only looking at the football program, not then entire AD...just can't believe people got paid to create a worthless $ figure.

The Cavs would be better if everyone not named Lebron didn't suck.

Must be nice to have KG and some idiot hitting 40 points worth of un-defendable shots...

Paterno Lives! said...

Un-defendable is defiantly made up word.

Anonymous said...

This is profitable programs in general, not just football. Basically, only 19 schools make enough from football and basketball to cover everything else.

Anonymous said...

Folks, wake up and smell the coffee--these numbers are right. Look at some of the university budgets. When you take into account fixed overhead costs like stadium maintenance and improvements, game day security, coaches salaries, etc., these eat up even the biggest revenue streams pretty quick. Take a look at the NCAA report itself--it does include TV revenue. And those 19 teams that make money (which the NCAA conveniently refuses to name), have got to be in the big TV conferences (Big Ten, SEC).

And the difference between "athletics-generated" and "school-allocated" revenues? Simple: "athletics-generated" is money brought into the university by athletics (money the university wouldn't have otherwise). "School-allocated" is money that comes OUT of the university's budget to support (subsidize) the football team (money the university wouldn't have to pay otherwise).

The fact is, if the NCAA itself is coming to this conclusion, things must be a lot worse than they appear. The NCAA has a real vested interest in maintaining the fiction that athletics makes money, and that they won't identify the 100 football programs that DON'T make money speaks volumes.

I say all this as a former Division 1 athlete who loves college sports. I think that athletics can have a positive impact on a college culture that is worth subsidizing to a certain extent, just like the orchestra, theater, etc. But something is fishy in football land, especially when you consider that players are getting scholarships worth a measly $25,000 and coaches are getting millions. And that sucks.