Bloomberg News reported that the University of Texas (UT) is profiting from a decision to renovate its football stadium four years ago instead of investing in securities. According to UT Athletic Director DeLoss Dodds, the school's annual debt payment from the football stadium construction is about $14 million, while revenue from the renovation is about $24 million a year. He said placing the money in endowments would have produced a 30 percent drop.
However, the profits reported at UT are the rare exception; at most colleges, athletic departments have lost money during the economic recession.
Jim Isch, interim president of the National Collegiate Athletic Association, stated “These schools are the anomalies. They are playing for national football championships, they have tradition, people know if they don't keep their tickets, someone else is standing in line to get them. But the average programs are going to see declines." Isch said the most successful athletic departments probably will show declines in ticket revenue, contributions and endowment income.
Schools may begin showing the recession's effects when financial results are calculated for the fiscal year ending in 2010. “I believe you will see that intercollegiate athletics is not recession-proof,” Isch said.
Bloomberg News received financial statements for the fiscal years ending in 2007 through 2009 from 51 public universities in the Atlantic Coast, Big East, Big Ten, Big 12, Southeastern and Pacific 10 conferences after filing open-records requests. Nineteen of the schools in the survey showed declines in operating revenue in the final year of the three- year survey.
Andrew Zimbalist, an economics professor at Smith College, said when 2009-10 data becomes available later this year, it will probably show back- to-back years of revenue declines for many schools.
“The sharp impact of the downturn happens around the beginning of October 2008,” he said. “By that time, many of the season tickets, the booster donations, the catering functions have already been booked for the 2008-09 year.”
According to the report, schools with less revenue between fiscal 2007 and 2009 included: the University of Florida, down 11 percent to $96.8 million; Arizona State, down 5 percent to $51.9 million; and the University of Washington, down 9 percent to $54 million.
A separate Bloomberg survey in November showed that 45 of the largest U.S. college athletic programs lost a combined $209 million in their investment portfolios between 2007 and 2009, with the University of North Carolina experiencing the biggest loss — $52 million, dropping the market value of its endowment fund to $148 million, according to the school.