Sports Subsidies Soar

Money is harder to come by in virtually all realms of higher education these days, and competition for funds is likely to grow. So at a time when many colleges and universities are freezing salaries and positions and even furloughing employees, it is likely to disturb employees on some campuses that institutional subsidies for sports programs are large and growing.

That analysis is possible thanks to data on sports revenues and expenditures collected and published last week by USA Today. The newspaper asked universities that play football in the Football Bowl Subdivision, the National Collegiate Athletic Association's top competitive level (formerly Division I-A), for four years' worth of the financial disclosure forms they provided to the association as part of its regular survey of sports finances. The NCAA's own report on the data provides information only in the aggregate, but by publishing the data for virtually all public universities that play big-time football -- most private institutions and a handful of publics declined to make their forms public (see below) -- USA Today has made it possible to look at the situations at individual sports programs.

While the picture looks different depending on the institution, a few broad patterns are evident and worth highlighting:

• The vast majority of sports programs -- even those that purport to support themselves -- receive significant financial backing from their institutions to operate. Of the 99 institutions in the table below, all but four -- Louisiana State, Ohio State, and Purdue Universities, and the University of Nebraska at Lincoln -- reported receiving at least some revenues in the 2007-8 fiscal year from one of four categories of "allocated" revenues: student fees, direct state or government support, direct institutional support (general fund money), or indirect institutional support (facilities, energy costs, etc.).
• While 65, or two-thirds, of the sports programs reported having more operating revenues than operating expenses in 2007-8 -- meaning that they appeared to turn a profit -- just a quarter showed net profit after excluding the subsidy totals.
• 44 of the 99 sports programs derived at least a third of their operating revenues from student fees, institutional support or other allocated sources -- and 27 derived at least half of their revenues that way. Among the highest: Eastern Michigan, Florida Atlantic, Florida International, Kent State, Miami (Ohio), Middle Tennessee, Ohio, Western Kentucky and Western Michigan Universities, the State University of New York at Buffalo, and the University of Akron drew at least two-thirds of their operating revenues from allocated rather than generated sources (ticket sales, fund raising dollars, television and other deals, etc.).

A few caveats warrant mention.

First, there is legitimate debate in college sports about whether it is reasonable or appropriate to demand that sports programs be self-supporting. Defenders of such subsidies often note that Ivy League and Division III colleges, whose sports programs are generally seen as being part of their institutions' broader educational missions, make no apologies about providing most of the financial backing for those programs, as they would for arts or music or other programs. The more that big-time sports programs are required or pushed to be financially self-supporting, some supporters of the programs argue, the more pressure they may feel to commercialize themselves.

Second, some of the "allocated" revenues that count in this analysis as "subsidies" can be seen as revenue that the sports programs would otherwise be generating on their own. The prime example of this is student fees, which many sports programs receive in exchange for providing free or discounted tickets to students -- tickets that, in some cases at least, they would otherwise be able to sell and produce revenue.

Still, the spiraling costs of college sports programs, and the sometimes surprisingly large and growing share of those costs that are covered with institutional or state dollars, have become a matter of concern on several campuses, and are almost certain to draw attention on others as higher education's fiscal crisis expands. The faculty at the University of California at Berkeley voted in November to require the sports program there to wean itself off millions of dollars in annual subsidies that had led to a $31 million cumulative deficit that university leaders forgave in 2007. The extent of the deficits became known only because of faculty digging into past sports budgets.

The issue of sports spending has already appeared on the radar screen at the University of Cincinnati, too, where a universitywide panel concluded that the university's current sports budget (which runs an annual deficit of $3.5 million) was insufficient for it to compete successfully in the Big East Conference, which it joined recently. To fully compete, the panel said, could require as much as $11 million more spending a year.

While the panel said it was essential for the athletics department to stop running an annual deficit, several of its ideas for doing so -- including raising student fees and having the university absorb some or all of the department's $24 million cumulative structural deficit -- would require a bigger commitment of institutional funds, at a time when Ohio's public universities, like many around the country, are facing more budget turmoil, not less.

"This has generated a lot of discussion about athletics vs. academics," acknowledged Sandra Degen, Cincinnati's vice president for research and a co-chair of the panel.

Like most public universities in California, San Diego State University has seen its state support cut sharply in recent years, and, promises from Gov. Arnold Schwarzenegger notwithstanding, more reductions are possible. Yet San Diego State has seen its subsidies for athletics rise from $11 million to $16 million in three years. A spokesman said in an e-mail message that allocations from the university's general fund had remained flat, and attributed the increase to a student fee increase designed to add women's lacrosse and keep the institution in compliance with statewide gender equity guidelines. "SDSU’s athletic budget allocations from the university’s general fund have actually remained flat," said the spokesman, Greg Hand.

The reports that the university submitted to the NCAA, replicated in USA Today's database, indeed show San Diego State's student fee allocations to athletics rising from $5.3 million in 2004-5 to $6.3 million in 2007-8. But the reports also show "direct institutional support" to athletics nearly doubling, from $5.3 million in 2004-5 to $10.1 million in 2007-8.

"We are well aware of the fact the increasing general fund allocations to athletics cannot be an option given California finances," Edith J. Benkov, director of French and Francophone studies and chair of the San Diego State University Senate, wrote in an e-mail message.

In addition to virtually all of the private institutions that compete in the Football Bowl Subdivision -- including universities like Duke, Notre Dame, Stanford and others -- several public institutions declined to provide their NCAA financial forms to USA Today. They include the three state-related institutions in Pennsylvania -- Pennsylvania State and Temple Universities and the University of Pittsburgh -- and the U.S. Naval Academy.

More up-to-date financial data on the institutional subsidies to sports programs could be available soon, as NCAA members were required to submit their 2008-9 financial reports to the NCAA last week.

Big-Time Sports Programs and Institutional Subsidies

Source: USA Today survey of NCAA reports