SBD/May 2, 2013/Colleges

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  • Rise Of Spending In College Athletics Again Outpaces Revenue; Subsidies Jump Sharply

    Subsidies for college athletics rose dramatically in '12 after two years of decline

    Major-college athletics departments last year “increased the amount of money they generate" by nearly $385M, but “increased operational spending" by more than $665M, according to Berkowitz & Upton of USA TODAY. Only 23 of 228 public schools in NCAA Division I generated "enough money to pay for athletics, a figure basically unchanged for three consecutive years.” This marks the “fifth time in the last six years sports programs have added more to their annual operating expenses than they have to their revenue.” Subsidies for athletics in the form of student fees, school or state support "rose dramatically" in '12 after the rate of increase "had declined in the two previous years.” The subsidies rose by nearly $200M "compared with what the athletics programs received" in '11. That marks the “greatest year-over-year dollar increase in the subsidy total” since FY ’04-05. Rising scholarship costs “continued to play a major role in athletics spending increases” last year, but “outlays for coaching compensation rose faster.” There were 11 schools whose athletics programs generated at least $100M in ’12, while “there were nine such schools” in ’11. There were 10 schools whose athletics programs spent at least $100M in ’12, while “there were seven such schools” in ’11 (USA TODAY, 5/2).

    RED INK RISING: In Birmingham, Jon Solomon noted the Univ. of Alabama and Auburn Univ. were two of the 23 Div. I schools “operating in the black.” The Univ. of Alabama-Birmingham, "when factoring out subsidies," lost $18M on athletics last year, after losing $16.2M in '11. Elsewhere, the Univ. of South Alabama lost $15.3M, while Troy had a deficit of $11.6M. The efforts to control costs in college athletics “remain tied largely to two line items: salaries/benefits and scholarships.” Ticket sales and contributions remain the "highest sources of generated revenue.” As TV contracts “increase, the line item for NCAA/conference distributions is getting increasingly closer" (AL.com, 5/1).

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  • Michigan AD Dave Brandon Meets With Faculty In Attempt To Clarify Athletics Financials

    Brandon said his department annually gives $2M to UM's general fund for scholarships

    Univ. of Michigan AD Dave Brandon on Monday met with faculty and "debunked what he considers 'the greatest myths' about the department," including the assumption athletics "takes some money from the general fund or other university arms," according to Kellie Woodhouse of ANNARBOR.com. Brandon said that the athletic department gives $2M to UM's general fund "annually toward scholarships." He added the department gets "no support from the general fund." While the department averages a $5-10M annual surplus, Brandon said it is actually "an enterprise that struggles to pay for itself" due to a $240M debt load and costly construction projects. Brandon: "It's not a business model that you'd ever invest in." Brandon also "responded to concerns that the department is bogged down in debt" because of the $227M renovation of Michigan Stadium in '10. He acknowledged the renovation is a major part of the athletic department's long-term debt, but said that it is "critical to the school's current revenue model." Woodhouse noted the MU athletic department makes $14M a year after annual debt service, "thanks to the 81 luxury boxes and club seating added in the renovation" (ANNARBOR.com, 5/1).

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  • Commissioners Hope To Avoid Any Perceived Bias In Selection Of First CFP Committee

    Four of the 10 commissioners who will decide the selection committee for the new College Football Playoff yesterday said that the current model under discussion "does not include a separate and distinct representative from each of the 10 FBS conferences," according to Dennis Dodd of CBSSPORTS.com. Pac-12 Commissioner Larry Scott said, "We don't want people on the committee representing a particular constituency. Then people are in there with a narrow interest." Dodd noted the committee could "include retired coaches, current or retired administrators, even a retired media member." For now, the commissioners "want to eliminate one element of bias -- conference affiliation" (CBSSPORTS.com, 5/1). Big Ten Commissioner Jim Delany said that the top priority in forming the selection committee is to "find people with 'football savvy' and a true national perspective, whether they're current athletic directors, former coaches, former media members or others." ESPN.com's Adam Rittenberg noted Delany believes it will be "harder to put together the football committee than the men's basketball tournament selection committee," partly due to the "longer period for debate after the selections are made." Delany: "You’re going to have close to a month, so that's going to make it hard. It's a bigger decision and a longer time for scrutiny" (ESPN.com, 5/1).

    UNDER THE MICROSCOPE: In Columbus, Rob Oller wrote under the header, "College Football Playoff Committee Won't Be For Meek." When the "besieged Bowl Championship Series meets its demise after the upcoming 2013 season, the fans’ wrath will fall upon the committee assigned the task of replacing the BCS system that relied on polls and computers." Univ. of Florida AD Jeremy Foley said, "I'm not saying it will be impossible. It will be difficult." Oller noted it "also will be a public undressing for the committee members." Each member "will undergo scrutiny unlike anything seen in college sports." Twitter will "explode if a selector’s résumé includes anything suspicious." Big 12 Commissioner Bob Bowlsby said, "Priority No. 1 is impeccable integrity" (COLUMBUS DISPATCH, 4/30).

    ONLY THE BEGINNING: CBSSPORTS.com's Dodd wrote, "Excuse us if we're skeptical. Not so much about the coming playoff in 2014, but about how long it will stay at four teams." What is "amazing these days is how quickly the stewards of the game -- the commissioners -- can change their minds." The structure is "already there." Six "branded bowls encompassing 12 teams in a 12-year deal that kicks off in 2014 already is more than accommodating for eight." It is "merely a case of expanding from two semifinals to four quarterfinals." The selection committee "already is proving to be the toughest piece to figure out," and there will be "issues going from a more objective-based BCS ranking system to one with more human subjectivity." There also is the issue of the "incongruity of conference championship games" as the Big 12 is the only BCS conference without one. Dodd: "Is that an advantage or not? Too early to tell." BCS Exec Dir Bill Hancock and conference commissioners "argued for years that a playoff would impact the bowls." Dodd: "If anything, the bowls are now more valuable thanks simply to the overall popularity of the game." Fox Media Group COO Larry Jones "boldly stood up at a Football Bowl Association meeting last week and practically begged any bowls whose rights are expiring to sign with Fox" (CBSSPORTS.com, 4/29).

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