hammer, I had to do some checking, but here's the info. You are probably correct about only 40 schools turning a profit for the entire athletic department for all of the NCAA. But for football alone it is no where near the 100% profit that you assume it is. The studies show that the BCS conferences are the few who are making money and almost everyone else is losing money.
NCAA Profit/Loss PDF
Here's the specific info on football (D1-A)
From 1985 through 2001 the percentage of profitable football programs range from 55% to 71%. With 117 schools in D1, that equals 64 to 83 schools that are profitable in football only. As Sloopy points out earlier, some of these schools are only profitable because of the Bowl money afforded them from other conference members who are sharing their bowl earnings throughout the conference. The average profit ranges from 2.2 million to 7.4 million per school over these same years (the money makes a dramatic increase during the BCS years). If you take a nice round number of 100 football players per team, it works out to $22,000 up to $74,000 that each one "earns" for their school. These numbers are not much different from tuition (plus room & board) that these players recieve in benefit (depending upon school and year).
The number of schools losing money ranges from 45% to 28% for the period 1985 to 2001. That's 33 to 53 schools out of 117. The average loss ranges from 200,000 to 1.3 million per school
The number of schools breaking even range from 0% to 3% over these years.
It's much worse in D1-AA
The range of schools making money from football range from 5% to 24% with an average profit ranging from $80,000 to $350,000 per team.
The range of schools losing money from football range from 76% to 94% with an average loss ranging from $420,000 to $780,000 per team.
The number of schools breaking even range from 0% to 9% over these years.
NCAA Profitability Report-Football
The NCAA News -- April 12, 2004
Conference data emphasize financial gaps
By Gary T. Brown
The NCAA News
Most any research on revenues and expenses for Division I athletics programs shows a clear delineation between profitable programs and those that lose money on sports. But a recent NCAA report that aggregates data by conference shows that the gap between the financial "haves" and "have-nots" is just as dramatic among leagues as it is among individual institutions.
The report conducted by the NCAA research staff and Daniel L. Fulks, the accounting program director at Transylvania University and longtime financial analyst for the NCAA, shows that the six Division I-A conferences referred to as BCS leagues (because they are tied to football's Bowl Championship Series) have demonstrated rapid growth in institutional averages for both revenues and expenses while other leagues have been flat.
Institutions from among the six leagues in question -- the Atlantic Coast, Big East, Big Ten, Big 12, Pacific-10 and Southeastern Conferences -- have increased their operating revenues over a 10-year period by anywhere from 108 to 146 percent and have brought in revenues ranging from $27 million to $44 million in 2002. Schools from the other five Division I-A conferences -- the Mid-American, Mountain West, Sun Belt and Western Athletic Conferences and Conference USA -- are well behind that pace.
For example, the lowest in the revenue range of so-called BCS leagues is the Big East, whose average revenues went from about $13 million in 1993 to $27 million in 2002. At the top of the revenue range among the other five I-A leagues is the Mountain West, where average revenues went from $9 million in 1993 to $18 million in 2002. That represents a "revenue gap" of 50 percent.
The study also reveals that expenses are increasing at a greater pace than revenues for most leagues. In 2002, only four conferences (Big 12, Big Ten, SEC, Mountain West) reported average revenues greater than expenses, and only three (Big 12, Big Ten, SEC) reported average net profits of more than $1 million. Only the SEC schools have reported profits in each of the 10 years of the study. SEC revenues over expenses have ranged from a low of about $1 million in 1998 to almost $6 million in 2002.
On the flip side, five leagues (Big East, Conference USA, MAC, WAC, Sun Belt) have reported a net deficit in all 10 years of the study and the Mountain West has reported expenses over revenues in nine of the 10 years.
"A look at the total Division I-A report in fact shows that the subdivision as a whole has not reported revenues over expenses in any of the 10 years," said Fulks, who has been involved with the NCAA's revenues and expenses studies since they began. "This would lend credence to the baseline economic study last August that indicated increased spending does not necessarily lead to increased revenues."
The study to which Fulks refers is an NCAA-commissioned eight-year look at Division I operating budgets conducted by experts at the Brookings Institution. Those findings indicate that spending in athletics is not associated with more wins, does not generate revenue (most athletics programs in fact lose money), does not improve alumni giving appreciably, and does not attract a greater number or higher quality of applicants.
"The study we've compiled on Division I-A conferences would corroborate that," Fulks said. "It also points out, however, the wide gap in both revenues and expenses between the two groups of leagues."
Inflation adjustments
The report studies a 10-year period from 1993 (the time when the NCAA began tracking schools' financial data) through 2002 and uses the same data gleaned from NCAA institutions that are used to create the NCAA's "Revenues and Expenses of Divisions I and II Intercollegiate Athletics Programs" that have been published biennially since 1994. As in those reports, the data include operating budgets and not capital expenditures.
Fulks said he and NCAA researchers conducted the conference study in response to increased interest from the general public as well as the NCAA membership.
Fulks noted that some portion of the changes in data during the 10-year period is the effect of inflation, or the buying power, of the U.S. dollar. Since such inflationary effects can be misleading, Fulks said he applied the consumer price index (CPI) provided by the U.S. Bureau of Labor and Statistics to adjust the data. The CPI measures inflation as experienced by consumers in their daily living expenses.
"The result of such an adjustment should allow people looking at the research to observe 'real' changes in the levels of revenues and expenses over the 10-year period," Fulks said.
While the adjustments generally reduce the raw percentage of fluctuation among revenues and expenses over the course of the study, the pattern of outcomes does not change. In other words, leagues running a deficit are identified both by the raw data and the price-adjusted data, and gaps continue to exist between the two groups of conferences.
Fulks also noted that the results are averages for all members of the respective leagues. "An individual institution's actual results may differ significantly from that institution's conference average," he said. "The varying sizes of institutions and their budgets, as well as the markets within which they operate, may have dramatic effects on financial results."
Fulks also said that for purposes of the report, the membership of each conference as of the 2003 fiscal year is the one used for all years covered by the report. Thus, for example, the current 11 members of the Big Ten have been included in that conference's aggregate numbers for all reported years.
Effects in football, men's basketball
In no part of the report is the gap between haves and have-nots more apparent than in football, where the BCS conferences have escalated steadily in revenues and expenses while the other Division I-A leagues have remained flat.
Net profits in football also are more readily apparent in the group of six I-A leagues. None of the six in fact reported expenses exceeding revenues in any one year of the report. The lowest one-year gain was the Big East's $1.013 million profit in 1995. In the most recent year reported, all six leagues reported average profits of at least $3.75 million, topped by the SEC's $18.1 million average and the Big Ten's $12.7 million average.
The football portion of the report also shows the expected spike in net revenues for BCS leagues after 1998, the first year the Bowl Championship Series was conducted. In the SEC, for example, average net revenue jumped from $8.7 million in 1998 to $11.6 million in 1999. The Big Ten went from $6.9 million to $8.5 million in the same period.
In men's basketball, more conferences show net gains than in football. In addition to the six BCS leagues, Conference USA, the Mountain West and the WAC report revenues over expenses in all 10 years of the study. Conference USA and the Mountain West in fact show consistently larger net profits than the Big East and are competitive with the Big 12. The study shows the ACC as the biggest budget winner in men's basketball with net profits consistently exceeding $3.5 million ($5.1 million in 2002).
The complete study will be available in PDF format online at
www.ncaa.org later this month.
Also, you didn't answer my question. Should HS football players be compensated? Should band members? Where do you draw the line? What's the value of a college education (not the cost)? For you to assume that schools who take a loss at college football is due to poor management is laughable. Too many schools are losing money on football to be blamed on poor management. The expense in running a football program is huge.
rhammersmith said:
Nearly 100% of the colleges make a profit off of football (heck even a lot of high schools make a profit off of football), and the ones that don't are more reflective of bad managment decisions than the potential to make money off college football. However, only 30-40 schools make a profit off the entire athletics program, because for most colleges there are only two profitable sports, football and basketball.
Its the players that don't need a college education to earn millions of dollars that are being taken advantage of. The other college sports that aren't profictable are funded by football and basketball fans who pay to see stars that will one day make millions. If you aren't worth more than you are being compensated I don't see how you are being exploited. If Lebron James chose to play college basketball, the fact that he chose to pass on millions of dollars negates exploiting him. Football players who are good enough to play in the NFL don't have that choice.
