The Money Makers, Part 1
by Will Stewart, TechSideline.com
TSL Extra, Issue #6

In part 1 of this fascinating multi-part series, the TSL Extra takes a look at the financial side of college athletics, including reams of data on revenue and expenses for the major Division 1 athletic programs. The numbers reveal some interesting and often surprising facts about the haves and the have-nots of college athletics.

Recently, TechSideline.com came into possession of some detailed data showing revenue and expenses for approximately 250 Division 1 athletic programs. The data include:

  • Total revenue and expenses
  • Football revenue and expenses
  • Basketball revenue and expenses
  • Men's sports vs. women's sports revenue and expenses

In this issue and future issues of the TSL Extra, we'll break down this data for you and highlight the trends that it points out. We'll sort out the big money-makers and money-losers in college athletics, we'll break it down by conference, and we'll highlight the Big East schools, and of course, Virginia Tech.

There is one caveat: the data is from the 98-99 academic year. But while the data may be two years old, the numbers point out major trends and facts that will not change drastically from year to year. So much of what you learn here will still apply today, despite the fact that college athletics, including the financial aspects, can change quickly from year to year.

Also worth noting is that TechSideline.com did not receive any explanation of the data, just the spreadsheets that contain it. So you may have questions about the data that are unanswerable. We'll make our best effort to explain things to you as we go along, but since we received no explanation ourselves, our explanations of the origin of the data may not be totally accurate.

This is part 1 of a multi-part series, and this part will focus on total revenue and expenses of Division 1 programs around the country. We'll show you who made the most money in 98-99, who spent the most, and who lost the most. We'll then sort the data by conference to show you how the conferences rank as money machines.

The Data

First of all, let's go over the format of the data and how to interpret it. It's pretty simple, and it won't take long. And as usual, I'll give you a link to an Excel spreadsheet where you can download the data yourself.

The data covered in this part of the series consist of three numbers for each school: revenue, expenses, and profit/loss.

Revenue: this figure is the total revenue made by all varsity athletic programs at a university. This figure includes ticket revenue, TV contract revenue, football bowl money, NCAA championship money (such as payouts from the NCAA basketball tournament), and money contributed to a school's athletic fund (i.e., Virginia Tech's Hokie Club).

It probably also includes money from apparel and shoe deals, such as Nike's contract with Virginia Tech, in which Nike outfits some of Virginia Tech's teams with uniforms and shoes, in exchange for being able to place their logo on the uniforms. These contracts have a certain cash value, and that value is included in the revenue figures.

There are probably other sources of revenue that I'm neglecting to mention, but the major ones are listed above.

Expenses: this figure is the total expenses incurred by all varsity athletic programs at a university. This figure includes salaries for administrators and coaches, travel expenses, scholarships, equipment, promotional costs, etc.

I'm not sure whether it includes expenses for capital projects, such as stadium construction, practice field construction, etc. It probably includes cash expenditures for capital items (for example, Frank Beamer's new football practice fields that were just built, at a cost of about $1 million, might show up as a line item under expenses), but it probably does not include capital projects that were funded by taking on debt (for example, if Tech took out a $15 million loan to finance stadium expansion, the portion that was paid for by the loan would probably not appear as an expense). Not being an accounting type, I'm not sure what is and isn't included in reports like this.

Profit/Loss: this figure is revenue minus expenses. If the number is in parentheses, then it's a loss, not a profit.

Virginia Tech's Data

Here's a typical example -- take a look at Virginia Tech's line of data (remember, this is for 98-99):

School

Revenue

Expenses

Profit/Loss

Virginia Tech

$20,845,889

$20,319,646

$526,343

So, for the 98-99 academic year, Virginia Tech's athletic department turned a profit of over $500,000. That was during a year in which the Hokies went to the Music City Bowl, which pays about $2 million after Big East revenue sharing is added in. The Hokie Club also brought in about $8.9 million in donations that year.

Since then, bowl revenue has gone up and down, and Hokie Club revenue has exploded. Let's take a look at both figures for 98-99, 99-00, and 2000-2001:

Year

Bowl Revenue

Hokie Club Revenue

Total

98-99

$2 million

$8.9 million

$10.9 million

99-00

$5 million

$10.0 million

$15.0 million

00-01

$2.2 million

$13.5 million? (est.)

$15.7 million

Note: bowl revenue figures are approximate and include VT's direct share of bowl money plus their portion of Big East bowl revenue sharing.

So, you can see what while Tech's revenue in 98-99 was $20.8 million, their revenue in 2000-2001 could be as high as $26 million or more. Probably more, because the Hokie football team enjoyed increased ticket revenue and TV appearance revenue.

The Big East's Data

Now let's expand and take a look at the Big East Conference as a whole. I'll break it up into football schools and non-football schools. Football schools are listed first (beginning with BC and ending with West Virginia), and basketball schools are listed second (beginning with Connecticut and ending with Villanova:

Big East Conference Revenue/Expenses, 1998-1999

School

Revenue

Expenses

Profit/Loss

Boston College

$22,339,561

$27,331,158

($4,991,597)

Miami

$23,581,713

$27,890,899

($4,309,186)

Pittsburgh

$12,323,000

$20,045,000

($7,722,000)

Rutgers

$23,938,578

$23,938,578

$0

Syracuse

$36,376,607

$38,214,074

($1,837,467)

Temple

$5,427,711

$11,711,551

($6,283,840)

Virginia Tech

$20,845,889

$20,319,646

$526,343

West Virginia

$24,016,068

$24,831,971

($815,903)

Connecticut

$24,440,099

$23,733,840

$706,259

Georgetown

$8,644,696

$11,149,364

($2,504,668)

Providence

$4,791,753

$10,786,530

($5,994,777)

Seton Hall

$6,017,932

$6,788,209

($770,277)

St. John's

$5,777,013

$11,655,446

($5,878,433)

Villanova

$6,373,852

$13,409,343

($7,035,491)

If you're a Big East fan, that's alarming. Out of fourteen schools, a whopping three didn't lose money in 98-99: Rutgers, Virginia Tech, and Connecticut. And a number of schools bled major bucks: Pittsburgh, Temple, Providence, St. John's, and Villanova all lost over $5 million, and Boston College and Miami lost nearly that much.

What's most alarming in the data is the amount of money that the football schools lost. Their revenue was routinely over $20,000,000, and yet, they managed to lose exorbitant amounts of money.

Not surprisingly, Temple and Pittsburgh were the big money-losers among the football schools. You might think that Rutgers would be, too, but the Scarlet Knights, despite their losing ways, have a loyal core of fans who support the school financially. Pittsburgh and Temple suffer from major disinterest in their fund-raising and football programs (obviously, Temple is much worse off than Pitt).

In 1998-99, Pittsburgh was still playing in old Panther Stadium, which has since been torn down. It's possible and likely that their new football stadium, the one they will share with the Steelers and start playing in this fall, will help the football program contribute much more to their bottom line than Panther Stadium did (think seat licenses and luxury boxes, which Panther Stadium didn't have).

A future article in this series will delve more deeply into how much each school earns and spends on their football programs, so you'll be able to see the detailed breakdown there.

Among the basketball schools in the Big East, only Connecticut brought in over $10 million, and they brought in way over $10 million -- $24,440,099 to be exact. UConn is a very impressive athletic program, and their past performance in sports such as men's basketball, women's basketball, and non-revenue sports bodes well for their long-term prospects as a Division 1-A football team playing in the Big East Conference.

Do not underestimate Connecticut. With their brand new football stadium, their fundraising ability (that's where a large chunk of that $24 million in revenue came from -- less than $10 million of it came from their signature sports, men's and women's basketball), and their commitment to excellence, they are primed to succeed in 1-A football. That's why they voted to make the jump to 1-A, and they are slated to join the Big East football conference in 2005. Welcome them with open arms and give them some time to impress you.

Once you get beyond the football schools and Connecticut, the remaining basketball-only schools are enough to make you wince. Villanova lost $7 million, Providence lost $6 million (now you know why they dropped baseball last year), St. John's lost nearly $6 million, and Georgetown lost $2.5 million. Only Seton Hall showed any financial responsibility, keeping their expenses down and losing a mere $770,000.

The champion of Big East money-making is Syracuse. At $36 million in revenue, they're $12 million ahead of the $24 million posted by second-place WVU and UConn. In 98-99, Syracuse's football and men's basketball programs alone brought in $29 million of that $36 million. They are the kings of the Big East when it comes to making money. During that year, they were the Big East's representative to the BCS, so they made some good money from that.

Unfortunately for them, they're the kings at spending it, too. They spent $38 million, resulting in a loss of nearly $2 million. No other school in the Big East spent over $28 million.

Comparing the BCS Conferences

Among the BCS conferences -- the ACC, Big 12, Big East, Big Ten, PAC 10, and SEC -- the Big East teams are unique in their ability to lose money. On average, the Big 12 teams each lost money in 1998-99, but not nearly as much as the Big East teams. And on average, the teams from all the other BCS conferences made money.

Take a look at the following two tables, which show total and per-team revenue and expenses for each of the BCS conferences.

Total Revenue and Expenses by Conference, 1998-99
(Sorted by Revenue)

Conference

Revenue

Expenses

Net

BIG TEN

$415,624,664

$390,344,592

$25,280,072

SEC

$373,318,030

$364,558,615

$8,759,415

BIG 12

$306,710,344

$309,871,721

$(3,161,377)

PAC 10*

$269,579,656

$265,761,865

$3,817,791

ACC

$226,996,942

$222,907,003

$4,089,939

BIG EAST

$224,894,472

$271,805,609

$(46,911,137)

Note: the PAC 10 data only represent 9 of the 10 teams. Data were not available for Oregon.

The Big East's total loss of $46 million is staggering when compared to the other conferences. Big East teams spent 21% more than they made. That's not even close to breaking even. By comparison, Big 12 teams spent 1% more than they made, and all other conferences made money.

Per-team Revenue and Expenses by Conference, 1998-99
(Sorted by Per-team Revenue)

Conference

Per-team Rev.

Per-team Exp.:

Per-team Net

BIG TEN

$37,784,060

$35,485,872

$2,298,188

SEC

$31,109,836

$30,379,885

$729,951

PAC 10*

$29,953,295

$29,529,096

$424,199

BIG 12

$25,559,195

$25,822,643

$(263,448)

ACC

$25,221,882

$24,767,445

$454,438

BIG EAST

$16,063,891

$19,414,686

$(3,350,796)

Note: the PAC 10 data only represents 9 of the 10 teams. Data were not available for Oregon.

On a per team basis, the money lost by the Big East teams is laughable. Your first reaction might be to draw the conclusion that the non-football teams (i.e., the "basketball-only" schools) drag down the conference, and in a way, you're correct. They greatly reduce the per-team revenue, but they don't drag down the per-team net. Take a look at this table comparing the Big East overall with the Big East Football schools:

Revenue and Expenses for BE Schools, 1998-99

Classification

Per-team Rev.

Per-team Exp.:

Per-team Net

All 14 Schools

$16,063,891

$19,414,686

$(3,350,796)

8 Football Schools

$21,106,141

$24,285,360

$(3,179,219)

Interesting. Big East per-team net is still a $3 million loss, whether you include the basketball schools or not.

All this data, which I'll admit takes some concentration and some time to sift through, points out in no uncertain terms that the Big East Conference is far below the other BCS conferences in its ability to generate revenue for its teams, both in total and on a per-team basis.

When conference expansion and realignment discussions start up, this is one reason why they always center around the Big East losing teams to other conferences. As recently as 98-99, the Big East was hemorrhaging money like no other BCS conference, and things probably haven't gotten any better, and may have gotten worse.

The Big East has taken great steps to eliminate its split membership problem, by bringing in UConn for football, bringing in Virginia Tech for all sports, and expelling Temple. Next up is repairing the dire financial problems the league faces, but unfortunately for the Big East, those problems are largely up to the schools to solve.

The conference can help by signing more lucrative TV contracts, but it failed to do that when the football conference signed a new TV deal with ABC that actually pays $200,000 per year less than the old deal with CBS (source: The Miami Herald, March 2000). The new football TV contract starts with the 2001 season.

The conference can help with bowl tie-ins, and there are now five of those. Unfortunately, the bowl tie-ins are not relatively lucrative. There is a tie-in with one BCS bowl, one second-tier bowl (the Gator), and three $750,000 bowls (the minimum payouts -- the Insight.com Bowl, the Music City Bowl, and Jeep Christmas Classics). And as a Vick-led VT team proved last year, the Big East will likely never get more than one team in a BCS bowl in any given year.

The one upside for the Big East is that they can potentially place more of their teams percentage-wise into bowls than many other conferences.

The Non-BCS Conferences

Once you get beyond the BCS conferences, the data that TechSideline.com received get very sporadic, and most of the second-tier conferences like the MAC and Conference USA are poorly represented in the data.

Here's the per-team revenue and expenses table again, this time with the MAC, C-USA, and (just for fun) the Atlantic 10 added:

Per-team Revenue and Expenses by Conference, 1998-99
(Sorted by Per-team Revenue)

Conference

Per-team Rev.

Per-team Exp.:

Per-team Net

BIG TEN

$37,784,060

$35,485,872

$2,298,188

SEC

$31,109,836

$30,379,885

$729,951

PAC 10*

$29,953,295

$29,529,096

$424,199

BIG 12

$25,559,195

$25,822,643

$(263,448)

ACC

$25,221,882

$24,767,445

$454,438

BIG EAST

$16,063,891

$19,414,686

$(3,350,796)

CUSA

$13,562,152

$14,208,863

$(646,711)

MAC

$9,231,334

$9,994,775

$(763,441)

A-10

$7,457,768

$7,422,564

$35,205

Number of teams for which data were available:
CUSA: 9 of 11; MAC: 10 of 13; A-10: 10 of 10.



What About Notre Dame? What About Virginia?

I knew you would ask that, so here are the numbers for those two schools:

Team

Revenue

Expenses

Net

Notre Dame

$38,014,825

$34,245,459

$3,769,366

Virginia

$24,945,114

$25,076,514

($131,400)

A lot of people seem to think that Notre Dame would be a good fit for the Big Ten, and from a budget standpoint, these figures support that notion. The Golden Domers' budget totals are right in line with a typical Big Ten school.

Virginia, meanwhile, is right in line with the average ACC school's figures. UVa's revenue and expenses in 98-99 each ran about $4-$5 million higher than Virginia Tech's. The Wahoos received more money from the ACC TV contracts than Virginia Tech received from the Big East TV contracts, and their expenses were higher due to the fact that they fully fund more varsity sports than Tech.

The Top 10 Money-Makers and Money-Losers

To wrap this article up, let's list the top ten schools in revenue, the top ten schools in net income, and the bottom ten schools in net income. Since space is limited, I'll let these tables stand without comment -- VT's standing in the first two rankings is included for reference (they are not in the top 10 in either list).

Top 10 Schools in Total Revenue, 1998-99

Team

Revenue

Expenses

Net

1. Ohio State

$73,017,116

$72,959,563

$57,553

2. Texas

$56,112,081

$56,204,679

($92,598)

3. Tennessee

$51,649,323

$50,777,457

$871,866

4. Florida

$50,100,930

$50,900,580

($799,650)

5. Stanford

$48,721,082

$33,474,361

$15,246,721

6. Michigan

$43,427,000

$47,313,000

($3,886,000)

7. Wisconsin

$42,614,237

$43,707,509

($1,093,272)

8. Penn State

$41,789,114

$41,539,467

$249,647

9. Nebraska

$39,618,936

$39,170,335

$448,601

10. Minnesota

$39,300,450

$38,753,005

$547,445

52. Virginia Tech

$20,845,889

$20,319,646

$526,343

 

Top 10 Schools in Net Income, 1998-99

Team

Revenue

Expenses

Net

1. Stanford

$48,721,082

$33,474,361

$15,246,721

2. Rhode Island

$14,815,916

$9,662,403

$5,153,513

3. U. of Wyoming

$12,601,560

$8,206,585

$4,394,975

4. Notre Dame

$38,014,825

$34,245,459

$3,769,366

5. Louisiana State

$31,821,340

$28,445,681

$3,375,659

6. Maine

$10,163,177

$7,146,064

$3,017,113

7. Dayton

$8,769,505

$6,227,847

$2,541,658

8. Oregon State

$21,476,445

$19,404,293

$2,072,152

9. Auburn

$28,566,739

$26,503,634

$2,063,105

10. West. Kentucky

$6,242,412

$4,201,203

$2,041,209

38. Virginia Tech

$20,845,889

$20,319,646

$526,343

 

Bottom 10 Schools in Net Income, 1998-99

Team

Revenue

Expenses

Net

1. Colgate

$1,139,327

$9,867,790

($8,728,463)

2. Boston Univ.

$3,149,957

$11,660,332

($8,510,375)

3. Lehigh

$1,460,653

$9,849,428

($8,388,775)

4. Holy Cross

$893,360

$9,106,341

($8,212,981)

5. Pittsburgh

$12,323,000

$20,045,000

($7,722,000)

6. Bucknell

$1,316,225

$8,812,837

($7,496,612)

7. Central Michigan

$3,560,052

$10,703,554

($7,143,502)

8. Villanova

$6,373,852

$13,409,343

($7,035,491)

9. Washington

$34,364,563

$41,293,663

($6,929,100)

10. Lafayette

$1,021,830

$7,928,823

($6,906,993)

Worth noting: out of the bottom 23 schools in net income in 98-99, the Big East had 7 of them. The MAC, PAC 10, Big 12, and A-10 all placed one team in the bottom 23. The other 12 schools were from minor conferences.



The Data

If you want to see the complete set of data for total revenue and expenses, you can access the data as a web page, or you can download the Microsoft Excel 97 file.

Web Page link -- note that this is a large file, but it still loads fairly quickly:

http://www.techsideline.com/tslextra/issue006/revenue9899.htm

MS Excel File (Excel 97 compatible):

http://www.techsideline.com/tslextra/issue006/revenue9899.xls

(Right-click the link and do a "Save Link As" or "Save Target As" to save the Excel file to disk.)

 

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