Running Up The Score: Top NCAA Hoops Teams See Rising Costs

Top NCAA Teams Seeing Rise In Operational Costs

Eighty of the top NCAA Division I men’s basketball programs spent an average of 12% more during the ’04-05 school year than the year before, citing the “upward spiral in coaches’ pay packages” as a major reason, according to Department of Education figures cited by Russell Adams of the WALL STREET JOURNAL. That increase comes after a 7% increase during the ’03-04 year over the previous year. But despite the rising costs, an estimated 70% of Division I teams are profitable, a figure that has “remained steady” since ’93. NCAA President Myles Brand said that athletic budgets “are now growing three to four times as fast as university budgets.” Brand: “It’s a serious concern.” Brand noted that the NCAA formed a task force last year comprised of 50 university presidents and chancellors “to study the problem of escalating costs in college sports.” The findings from the panel are due this fall.

REASONS FOR RISING COSTS: Adams reported the “biggest obstacle to containing costs is the coaches’ pay package,” which at some schools accounts for almost 40% of the total budget. At least 12 coaches earn $1M or more, up from “only a couple a decade ago, and many coaches are paid more lavishly than their college presidents.” However, it is not coaches’ “base salaries ... that are driving up compensation levels –- it’s the extra perks, from guaranteed income from media appearances to golf-club memberships.” Ohio State coach Thad Matta has a $1M annual package that includes a private plane for recruiting trips and a $40,000 bonus for making the NCAA tournament. Wisconsin coach Bo Ryan estimated that with “golf outings, charity functions, speaking engagements and ‘chalk talks’ with boosters, he and his assistants make 100 appearances a year.” Ryan earns $300,000 of his $700,000 in total compensation from the appearances, and he “plans to use the proceeds ... to buy his parents summer homes in Florida and New Jersey.” Travel is the second biggest cost component for schools, as the use of charter planes “can reach into the high six figures. Louisville spent nearly $800,000 last year on travel, as the team “charters flights to anywhere out of driving distance.”

TEAM SPECIFICS: The most profitable team in the NCAA tournament this year is Arizona, which generated $16.6M in revenue last year while spending just $4.1M. Connecticut has seen revenue grow 44% to $7.7M since winning its first NCAA championship in ’99, but expenses have “more than doubled” to $5.5M during that period. The budgets for teams in this year’s tournament range from $7.4M for Duke to $474,000 for Northwestern State (WALL STREET JOURNAL, 3/11).