Revenues and Expenses Continue to Rise for Athletics Departments, NCAA Finds

By WELCH SUGGS

The gap between rich and poor athletics departments is growing, according to a study released Monday by the National Collegiate Athletic Association. In its biennial financial survey of its member colleges, the association found that departments that make profits are making larger ones, but that for the vast majority of institutions in Divisions I and II, expenses are rising faster than revenues.

The report, written by Daniel L. Fulks of Transylvania University, found that in 1998-99, colleges with Division I-A football teams broke even on their athletics programs, with average revenues and expenses of $20-million. Those with football teams in Division I-AA, the next-highest tier, lost an average of $2.2-million, while Division I institutions without football teams lost $2.5-million apiece. Division II institutions with football teams lost an average of $1.2-million, while those without the sport lost $900,000 apiece.

Breaking even is actually an improvement for the program in Division I-A, the N.C.A.A.'s top competitive level. In 1996-97, the last time the survey was conducted, those institutions lost roughly $800,000 apiece on average. None of these figures includes revenues that come from the college or university itself, such as student fees or direct allocations from the general fund.

However, the averages tell only part of the story, says Mr. Fulks, a professor of accounting. While the colleges that made money in athletics made a lot of it, those that lost money saw their losses grow even larger.

Only 46 percent of I-A institutions reported a net profit on their athletics departments, but they reported average profits of $3.8-million, up a whopping 124 percent from 1996-97. The rest of the athletics departments in I-A lost $3.3-million apiece, up from $2.8-million apiece in the previous study.

That is indicative of a growing concern within the N.C.A.A. that expenses will continue to grow faster than revenues, Mr. Fulks said.

"Our focus is going to have to be on the expense side, now and in the coming years," he said. "My belief is that there's a ceiling on the revenue side -- we can only put so many seats in a stadium, we can only sell so many tickets, we can only raise ticket prices a certain amount, we can only get so much money out of TV and radio. But on the expense side, we don't have those ceilings -- there's nothing to stop salaries and benefits from going up, grants-in-aid -- those will move as the cost of education increases."

One of the study's weaknesses, Mr. Fulks said, is that it does not always account for indirect institutional support of athletics departments, such as maintaining facilities, paying off debts, or providing athletics scholarships. As such, the amount that universities spend on athletics departments could be much higher.

Copyright 2000 by The Chronicle of Higher Education

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