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REPORT SHOWS THE BUSINESS SIDE OF COLLEGIATE ATHLETICS
Published September 11, 2000
A six-month investigation by the PHILADELPHIA INQUIRER on the business of college sports, "including a review of the financial records of nearly every major school from Alabama to Yale, found a $3.5 billion enterprise sheltered from most taxes, according to Gaul & Fitzpatrick in a front- page feature on Sunday, who reported that college sports "is an enterprise in which profit margins of some powerhouse football and basketball programs dwarf those of Fortune 500 companies." In FY '99, Penn State operated the fifth- largest football program in the nation, "taking in $25.4 million in revenue." Meanwhile the program had expenses of $9.8M, which resulted in "a surplus of nearly" $15.6M, or a 61% margin. Gaul & Fitzpatrick noted that ticket sales generated "far and away most of the revenue" for Penn State, with $15.7M. Meanwhile, TV and bowl-game income accounted for $5.6M, concessions brought in about $1M, while the rest came from corporate sponsors, advertising, licensing royalties and program sales. These revenue figures "don't include nearly" $8.8M that boosters and alumni paid to obtain season tickets. Including those donations, football accounted for a total of $342M, 82% of the athletic departments $42M in revenue. Gaul & Fitzpatrick added that Penn State declined to provide a full breakdown of its expenses. It also "turned down" requests from the newspaper for information on its corporate sponsorship agreements, historical budget data, and contract with Nike, "which company sources described as one of the most lucrative in the country." Sunday's piece is the first of a five-part series by Gaul & Fitzpatrick (PHILADELPHIA INQUIRER, 9/10).