SBD/July 10, 2012/Colleges

Study Shows Increase In College Athletics Spending Despite Poor Economy

Men's basketball and football ticket sales typically accounts for 25% of athletic budget
An examination of the financial trends at the athletic departments of the Univ. of Kansas, Kansas State Univ. and the Univ. of Missouri for the past five years found that there was “growth that ran contrary to gloomy financial trends, including some at other parts of the campuses,” according to Blair Kerkhoff of the K.C. STAR. KSU’s athletic budget “grew by nearly" 31% for '10-11, and the school "was identified as being the most profitable in college sports.” KSU’s athletic revenue “increased more than" $20M from '06-07. Meanwhile, the total compensation for KU men’s basketball coach Bill Self for ‘11 was $4.4M, while MU football coach Gary Pinkel made $3.2M, "more than double his salary of five years earlier.” On June 26, the Univ. of Missouri system approved more than $35M in cuts "in order to balance" its $2.8B budget for the '13 fiscal year. Programs were “either cut or consolidated, 180 jobs were eliminated" and the University Press publishing company "will be closed this summer.” The same day, the MU athletic department announced a $200M plan to upgrade its facilities and received a $30M "gift to help pay for the projects, including an expansion of Memorial Stadium.”

WHERE THE MONEY COMES FROM: Kerkhoff noted ticket sales “are the lifeblood of an athletic department.” A national survey by USA Today found that in ‘08, sales primarily of football and men’s basketball tickets accounted for 25% "of a typical BCS athletic department budget.” Contributions from private donors made up 22% and 18% "was from conference income, which includes revenue from the BCS, NCAA Tournament and television contracts negotiated by the conferences.” Figures from MU, KSU and KU from ‘07-11 “differed slightly.” At KSU and KU, “contributions slightly outpaced ticket sales.” KSU's breakdown consisted of 28% contributions, 25% ticket sales and 19% conference revenue. The school counted “a record amount of donations," $26.5M, to its '10-11 budget, "money that helped pay" for $93M in improvements that included a new basketball practice facility and a press box at Bill Snyder Family Stadium. Meanwhile, KU figures were 26% ticket sales, 31% contributions and 15% conference revenue. In each of the last five years, KU generated “more ticket sales income from men’s basketball than football, although the gap has closed recently.” MU’s consisted of 32% from ticket sales, 23% from contributions and 18% conference income. MU football produced “more than" $24M in revenue from '09-11 and "after the sport’s expenses were subtracted added about" $10M annually (K.C. STAR, 7/7).

FOOTBALL IS KING
: In Alabama, Paul Gattis wrote the state “may rank among the least prosperous states nationally,” but when it “comes to Auburn's Jordan-Hare Stadium or Alabama's Bryant-Denny Stadium, the state has its own little Wall Street.” Alabama Rep. Mike Hubbard said, "Everything surrounding football, there's no telling how much of an economic impact it has, but I know it is substantial.” Studies have found that football at both the Univ. of Alabama and Auburn Univ. “impact the state's economy to the tune of about" $170M each annually. Auburn economics professor Keivan Deravi said that the $170M impact “stemmed from a study" done in '08. Since then, the schools have won the past three national football championships (AL.com, 7/9).
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