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May 19, 2008 - NCAA’s financial picture receives concern from media

Several recently published articles help identify concerns about the financial nature of intercollegiate athletics in response to the NCAA’s recent financial report, “2004-06 NCAA Revenues and Expenses of Division I Intercollegiate Athletics Programs Report.” The NCAA’s report demonstrated the median net deficit in generated revenues for Division I-A programs increased from $5.9 million in 2003-04 to $7.3 million in 2005-06, and between 2004 and 2006, Division I-A median revenues grew by 16 percent while median costs increased by 23 percent.

In Street & Smith’s Sports Business Journal (subscription required), Andrew Zimbalist notes that the NCAA’s reported financial picture may be worse in reality for several reasons: 1) an increase in athletic giving from 14.7 percent in 1998 to 26 percent in 2003 may diminish general fund giving, leading to a deeper burden on an institution’s finances; 2) the report failed to include amount of compensation to non-athletic college administrators as athletics expenses; 3) and, the report’s lack of inclusion of capital expenses. Doug Lederman of Inside Higher Education reported the trend between the haves and have-nots seems to be expanding, that “the 16 programs that generated more than they spent, the average new revenue was $4.3 million, while the average loss of those with negative net revenue was $8.9 million. That $13 million difference suggests a widening gap between the ‘haves’ and ‘have-nots’ in big-time college football, as the equivalent gap in 2004 was about $11.3 million.” And, Steve Berkowitz of the USA Today interviewed Stan Nosek, vice chancellor of administration at the University of California-Davis and a member of the NCAA Task Force Oversight Committee. Nosek identified the growing concern among presidents about fully understanding how much their schools are subsidizing athletics, because “when some programs require more institutional support, it takes away from the core mission.”