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).
