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January 19, 2010 - Sports Subsidies Soar

Inside Higher Ed reported on a USA Today investigation which looked at financial data from the past four years from 99 of 120 NCAA Division I Football Bowl Subdivision institutions, and the extent that institutions were subsidizing their athletic programs.  The article noted that a look at each individual school’s finances provides a more clear picture at how institutions fund each of their sports programs.

The article found a few patterns in the data:

  • Of the 99 institutions in the table below, all but four -- Louisiana State University, The Ohio State University, Purdue Universiy, 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.).
  • After excluding subsidy totals, only 25 athletic programs reported having more operating revenues than expenses in 2007-2008.  The number jumps to 65 athletic programs making a profit after including subsidies.
  • 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.).

The report by Inside Higher Ed noted the concerns (which include those of the Knight Commission) from institutional sport programs being forced to be financially self-supporting.  Many believe sports programs are an important part of institutions' broader educational missions and thus should receive subsidization as would other ancillary programs on campus. Further, there are concerns that big-time sports programs required to be financially self-supporting may feel more pressure to commercialize themselves.

In addition, the USA Today investigation counted some of the allocated revenues counted as subsidies, such as student fees or discounted tickets to students.  In another light, these subsidies could be seen as revenue that the sports programs would otherwise be generating revenue on their own.

Inside Higher Ed shared the example of San Diego State University (SDSU), whose subsidies for athletics rose from $11 million to $16 million in three years.  A spokesman for SDSU 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. While the student fees rose from $5.3 million in 2004-5 to $6.3 million in 2007-8, direct institutional support nearly doubled, from $5.3 million in 2004-5 to $10.1 million in 2007-8.