This article, Part 3 of the series, takes a look at men's basketball income and expenses, and then compares that to football income and expenses. We've all heard that football is the "cash cow" in college sports, and that it's the driver in college athletic trends. As the data will show, this is true, but as we examine this data, we'll make some interesting discoveries about which teams and conferences get more value from the sport of basketball, and how it impacts their bottom lines.

As usual, a reminder: the data are from the 1998-99 academic year (the 1998 football season and the 1998-99 basketball season). Some of the data may have changed rather significantly since then, most notably if a school has undergone a conference realignment or had their conference's TV contracts, bowl contracts, or NCAA basketball tournament income change. So this data should be taken for what it is: a snapshot from two seasons ago. Even as such, it reveals some interesting things about the relationship between football and men's basketball as money-making machines for universities.

The format of the data is very simple. The data covered in this part of the series consist of three numbers for each school in each sport: revenue (basketball and football), expenses (basketball and football), and profit/loss (basketball and football). As with the overall data presented in Parts 1 and 2, definitions of the categories of data (revenue and expenses) were not given. Here is TSL's best guess at what each category includes:

Revenue: this figure is the total revenue made by a university's football or basketball program. This figure includes ticket revenue, TV contract and appearance revenue, football bowl money, and basketball tournament revenue. The revenue figures probably also include concession sales and advertising/signage income, including income from radio broadcasts.

I do not believe the revenue figures include money contributed to a school's athletic fund (i.e., Virginia Tech's Hokie Club), or money made from licensed apparel. It may or may not include 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 I'm not sure if the football and basketball portions are included here in these figures.

Expenses: this figure is the total expenses incurred by a university's football or basketball program. This figure includes salaries for administrators and coaches, travel expenses, scholarships, equipment, promotional costs, etc.

As with the overall data from Parts 1 and 2, this data may or may not include expenses for capital projects, such as stadium or arena 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).

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

For the 1998-99 academic year, here is Virginia Tech's set of data:

The basketball revenue and net income figures paint a bleak picture of men's basketball at Virginia Tech. Among the 67 Big Six schools (defined as schools from the six major conferences -- ACC, Big 12, Big East, Big Ten, PAC 10, and SEC), only 7 lost money. Out of those 67 schools, the Hokies lost more money than everyone but Baylor ($747k) and Colorado ($1.07 million).

Side note: in the football revenue article (Part 2), the "BCS schools and Notre Dame" amounted to 63 universities. That number goes up to 67 when discussing basketball's Big Six conferences because:

1.) You add 6 basketball-only schools in the Big East: Providence, Seton Hall, Connecticut, Georgetown, St. John's, and Villanova, for a total of 63 + 6 = 69 teams; and

2.) You subtract Temple and Virginia Tech, because they were in the "non-Big-Six" Atlantic 10 for basketball in 1998-1999, for a total of 69 - 2 = 67 teams.

After losing over $400,000 in 98-99, the Hokies went on to lose even more than that in 1999-2000, posting a loss of $651,222 on revenue of $1,016,113, according to a Dec. 28, 2000 article in The Detroit News.

With their loss of over $600,000 in the 1999-2000 school year, Tech ranked 136th out of the 137 schools surveyed by the Detroit News for their article. Only Colorado, which lost nearly $1.2 million on just $1.035 million in revenue, fared worse than Virginia Tech in men's basketball income in 1999-2000 among the schools sampled.

The list of schools for which the Detroit News accumulated data was defined as "137 of the nation's largest collegiate athletic programs, including all schools from the ten largest conferences" -- the Big Six conferences plus the MAC, the WAC, Conferences USA, and the Ivy League (note that the Atlantic 10 is not included in that list).

Of course, for that two-year span of 1998-2000, the Hokies were in the Atlantic 10 for basketball, not the Big East. One major difference between the Atlantic 10 and Tech's new home, the Big East, is TV revenue. The A-10 TV contract used to net about $100,000 a year for the Hokies, and the Big East contract nets each Big East team just over $1 million.

The problem is, the Hokies won't partake in that $1 million in revenue sharing until the 2005-2006 season. Tech will receive no Big East revenue-sharing in basketball, which includes TV and NCAA Tournament money, for the first five years of their Big East membership, under their membership agreement with the Big East.

In addition to no revenue sharing for five years, Tech will pay a total of $2.5 million to the Big East over the first ten years of their membership, according to an October 6th, 1999 News and Notes article on TechSideline.com. The payments will be $200,000 per year for the first five years, and $300,000 per year for the last five years of the ten-year time period. Revenue sharing for Tech will start in year six (2005-2006), and will average approximately $1.3 million per year, as compared to a paltry $100,000 that Tech was receiving from the Atlantic 10).

Those dismal figures for basketball revenue and basketball net income will remain that way for at least the next four years, or may even get worse, unless the Hokies increase home attendance and receive appearance fees for being on television. TV appearances are not likely to increase in the near future, but if the team puts together some wins in the coming years, attendance could take an upturn (see the related article "Inside the Numbers: Tumbleweeds in Cassell" this month).

Now let's take a look at the Big East Conference's revenue and expense figures for men's basketball:

In reviewing this data, several key points jump out at me. I'll cover them one by one.

First of all, there are those wacky Syracuse figures again. Much like with the football figures, Syracuse made way more than any other Big East team on basketball, and spent way more than any other Big East team. Again, I'm forced to wonder if Syracuse does some strange accounting tricks that other Big East schools don't do. Unfortunately, for brevity's sake, I can't reprint the football figures here, but you can look them up in last issue's feature and see the similarity in Syracuse's inflated basketball numbers and their inflated football numbers.

Secondly, as with football, the West Virginia Mountaineers are the picture of frugality and efficiency. Their basketball income ranked 8th in the 13-team league, but their expenses were the smallest, resulting in a net income that was 4th in the league. In last month's football figures, WVU was 2nd (out of 8 teams) in revenue and 7th in expenses, finishing a runaway first in net income from football.

Third, UConn is king of the Big East in basketball net income, by a narrow margin over Syracuse. I've said it before and I'll say it again, Connecticut is a financially well-run athletic department with competitive teams and great support from their fans. As a true all-sports member (which they will be when their football team joins the Big East in 2005), they are a credit to the league and a tremendous asset.

The Huskies know how to run successful sports programs both on and off the field, and the potential for them to succeed in Division 1-A football is there. I think in their attempts to succeed at the 1-A level in football, the biggest questions they'll have to answer will be in recruiting and coaching. With their new football stadium approved and in the works, the facilities are in place, and I think they'll get the fan support, so that's half the battle.

Lastly, the Big East's financial performance in basketball with respect to their peer Big-Six conferences is strikingly similar to their financial performance in football. In this case, I can reprint the football numbers, and here they are, combined with the basketball numbers:

In both cases (football and basketball), Big East average revenue is about 75% of the BCS/Big Six average revenue, expenses are about equal, but net income is much lower (Big East teams net 38% of the BCS average in football and 50% of the Big Six average in men's basketball).

Speaking of how the Big East compares to the other Big Six conferences, let's take a look.

The Big Six Conferences are the six conferences that are part of the BCS bowl contract in football and are, as a rule, true all-sports conferences: the ACC, Big 12, Big East, Big Ten, PAC 10, and SEC. Let's break down total basketball revenue and expenses and per-team basketball revenue and expenses for those conferences.

The Big Ten's status as the top conference in total revenue, total net, per-team revenue, and per-team net is a surprise. I think that when most of us outside the Big Ten think of the conference, we think of football: Michigan, Ohio State, Penn State, and company. But our first impression of the Big Ten as a basketball conference is that it's not on par with the ACC, or the PAC 10, or maybe even the SEC. When I think basketball, I think of North Carolina, Duke, UCLA, Arizona, and Kentucky. I don't think of the Big Ten schools.

But on second thought, the Big Ten is a great basketball conference, too. Bobby Knight's Indiana Hoosiers are as storied a program as any other (never mind that Knight is gone now), and in recent years, we've seen Michigan's Fab Five and the national champion Michigan State Spartans. Yes, football is king in the Big Ten, but basketball plays a mean second fiddle (if I may be allowed to mix my metaphors).

Also worth noting is that the Big East Conference, despite being formed (and perceived) first and foremost as a basketball conference, finishes near the bottom of the pack in per-team revenue and per-team net income.

Expenses are fairly uniform across the Big Six conferences. The conferences all spend within the range of $1.86 million to $2.28 million per team. But per-team revenue fluctuates between $2.6 million per team (Big 12) and $6.4 million (Big Ten).

Among the 67 Big Six teams, only 6 lost money on men's basketball in 1998-99. Four of the six teams come from the Big 12: Colorado, Baylor, Texas, and Texas A&M. The other two teams are Georgetown and Southern California.

Note that Virginia Tech and their $414,000 dollar loss do not appear on this list because the Hokies were in the Atlantic 10 in basketball in 1998-99, not a Big Six Conference.

In football, once you get outside the BCS conferences, revenue figures drop off dramatically. In basketball, it's a slightly different story, because outside of the Big Six, there are some pretty good basketball conferences and teams.

The two most notable non-Big-Six basketball conferences to Hokie fans are Conference USA and the Atlantic 10. CUSA is of interest to Hokie fans because it contains many teams from the old Metro Conference that Tech was a part of for about fifteen years, and the A-10 is of interest to Tech fans because it was the Hokies' basketball home from 1995-96 to 1999-2000.

Basketball is the key sport in those two conferences, so we'll take a look at them, but we can throw the MAC (Mid-American Conference), where basketball is most decidedly not the key sport, in for fun as well.

Here's a look at the previous per-team revenue table, with those three non-Big-Six conferences added in:

Unlike in football, a non-Big-Six conference actually trumps a Big Six conference in per-team revenue. Conference USA members bring in just over $3 million per team in men's basketball revenue, which tops the Big 12 figure of $2.6 million and puts CUSA in sixth place.

And when you look at per-team net income, CUSA is a close fifth, ahead of not only the Big 12, but the Big East. CUSA even nips at the PAC 10's heels when it comes to per-team net, and could overtake them in any given year, depending upon how school fortunes and NCAA payouts fall.

The ringleaders in Conference USA for men's basketball are Louisville (wait until you see their revenue figures in an upcoming table), followed by Memphis, Marquette, St. Louis, and Cincinnati. Out of twelve teams in CUSA in 1998-99, five, or nearly half, had over $3 million in basketball revenue. Only three of the twelve CUSA teams -- Tulane, Houston and Southern Miss -- lost money, and none of those three lost more than $161,000. CUSA is a financially viable conference when it comes to men's basketball.

As for the Atlantic 10, only three of their twelve teams lost money in 1998-99 on men's basketball: Fordham lost $470,000, Virginia Tech lost $414,000, and St. Joseph's reported a negligible loss of $126 (that is not a typo).

In the A-10, Dayton led the way with over $4 million in basketball revenue and a $2.8 million net gain (the Flyers enjoy great fan support), followed by UMass ($3.7 million in revenue, with a $1.6 million net gain) and Xavier ($3.1 million in revenue, with a $1.6 million net gain). Men's basketball isn't the money machine in the A-10 that it is in CUSA, but it's financially healthy.

The next three tables present:

1.) The top 10 money-making schools in terms of total revenue
2.) The top 10 money-making schools in terms of net income
3.) The bottom 10 money-making schools in terms of net income

Note that the figures for tables 1 and 3 include members of the Big Six conferences and CUSA only. Table 2 (Top 10 in net income) incorporates teams from other conferences as well, to show that UNLV and New Mexico (of the Mountain West Conference) crack the top 10.

All those numbers are fine and dandy, but one of the burning questions about basketball revenue is how it compares to football revenue. The best way to answer that question is to look at how total basketball revenue compares to total football revenue, and how basketball net income compares to football net income.

Here's a table that shows football and basketball revenue figures for the Big Six conferences and CUSA.

The importance of basketball revenue relative to football revenue is shown by the ratio in the right-hand column. The lower the ratio is, the higher the basketball revenue is relative to football revenue. Given that, it's not surprising to see that CUSA (1.61) and the ACC (1.72) have the lowest ratios, indicating how important basketball is to those two conferences. The numbers verify our perceptions with regard to those two conferences.

On the other end of the spectrum are the Big 12 (where football dominates basketball) and the SEC (where per-team basketball revenue is #3 among the conferences listed, but football revenue is a runaway #1, which throws the ratio off).

The average ratio of 2.94 means that the teams from the Big Six conferences and CUSA, on the average, make almost three times as much revenue on football as they do basketball.

Now here's the table for net income from football and basketball.

Net income is the true measure of the importance of football versus basketball to the teams in a given conference. After all, net income answers the question, "How much money does a team make off of football or men's basketball that can be used to pay for other, non-revenue sports?"

Again, the lower the ratio, the more important basketball is relative to football. A ratio of less than 1, which was registered by the ACC and CUSA, means that a school/conference nets more money from basketball than they do football. In the case of the ACC, conference members on average net about $800,000 more from basketball than football, whereas in CUSA, the teams net over $1 million more per team from basketball than football.

The Big 12, with its last-place net of $741,825 per team from basketball and its football/basketball ratio of 6.60, is clearly a conference where football is in the driver's seat when it comes to net income.

On average, the teams from the Big Six and CUSA net over two and a half times as much money on football as they do basketball.

Next month: a look at revenue from men's sports vs. revenue from women's sports.

As usual, the data that went into this report are available. If you want to see the complete set of data for football and men's basketball 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/issue008/fbandbbrevenue9899.htm

MS Excel File (Excel 97 compatible):

http://www.techsideline.com/tslextra/issue008/fbandbbrevenue9899.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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