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The American university athletics business (mega stadiums, outrageous salaries for coaches, etc.) is commonly misunderstood even by Americans, let alone the wor
by snapetom 7y ago
The American university athletics business (mega stadiums, outrageous salaries for coaches, etc.) is commonly misunderstood even by Americans, let alone the world.
Athletic departments operate as separate business entities from the University. What this actually means varies from state to state and university to university. Some are private corporations, some are government entities, some are non-profits. However, in general these things are true: No, the university does not directly pay a football coach 5 million a year. No, the university does not pay half a billion dollars to build a stadium.
Athletics gets it revenue from four main sources. 1) Apparel licensing. Often any piece of clothing with the university's logo often goes to the athletics department, not the school. (again, varies) 2) Ticket sales, concession, and parking sales for sports events 3) Television rights 4) Booster donations. The last two can be a huge, huge part of the athletics department budget. For better or for worse, university athletics is an egotistical playground for rich alumni.
As an example, Texas A&M pays Jimbo Fisher $7.5 million a year to be their head coach. However, we earned $43 million alone from television rights in 2018.
An Athletics Director's job is really to worry about #4. #3 takes care of itself via conference membership. 1 and 2 are the responsibilities of operational underlings.
If done right, the athletics department gives back profits directly to the university. Usually it breaks even, but even then, it's not really a break even. Athletics scholarships is a money transfer from the athletics department to the university for the athlete's tuition. This is typically around 20k per year per athlete. If done wrong, a little money goes from the academic side to athletics. Rutgers University is one of the "most subsidized" athletics programs. That "subsidy" in 2018 was $10 million out of a 1.5 trillion dollar budget. In the big picture things, 0.6% of your budget for branding and facilities use rights isn't that awful.
TL;DR - University athletics operates as a separate legal business entity from University academics. Claims that "you're stealing money from the math department to pay for sports!" often isn't true.
- mathgeek 7y agoCan you provide some references for the general and school-specific claims you’ve made? The specific example of Rutgers is great but the broader claims definitely deserve some supporting evidence.
- snapetom 7y agoOff the top of my head, I cannot. I just know the Rutgers number because I went there and was defending our new head coach's salary (which was relatively small - 10/14 in the Big 10 conference). The most heavily subsidized accusation is often said, so I looked it up on Rutger's budget report. It's there and within the past two years, it has been around 10 million, minus tuition waivers that I described above. The other comment responder's NCAA report is good, but again, it's wrong to draw conclusions without knowing what those terms are. There's definitely good expenses for academics on both the athletic department side and the university side.
- hurricanetc 7y agoI couldn’t find a more recent source but as of 2015 there were a total of 24 schools that generated net revenue. That’s out of a total of approximately 2,500 schools with an athletics program. About 99% of schools lose money on athletics and require direct institutional support to survive. That means, yes, stealing money from the math department. In practice it doesn’t really work out that way. Students just pay more in tuition and get the same education they would have if they paid less. Just look at UNT and what they did a few years ago. Raised tuition to fund a new football stadium. If you’re looking at this from the perspective of Texas A&M you’re looking from the wrong perspective. http://www.ncaa.org/about/resources/media-center/news/athletics-departments-make-more-they-spend-still-minority http://www.ncaa.org/about/resources/media-center/news/athlet...
- snapetom 7y agoThere's two definitions that are key to that report that must be understood before drawing conclusions. 1) "Grant-in-aid" are a large portion of expenses and are scholarships. This is the athletic department paying the market tuition bill for an athlete. This qualifies as an expense, but clearly has direct benefits to academics. For the university and academics, it's a "good expense." 2) "Direct Institutional Support" is the category that you're after. This is money directly paid by the academic side to the school. However, it's rarely a direct money transfer. Most of them are discounts on tuition. https://www.forbes.com/sites/kristidosh/2017/06/12/the-biggest-misconceptions-about-the-finances-of-college-sports/#7ba44988366f https://www.forbes.com/sites/kristidosh/2017/06/12/the-bigge... I'd argue these waivers, especially a Title IX waiver, is ultimately a very good expense for the academic side and society as a whole. Another large revenue is Government support - support from the state government. While this is a direct money injection, you can't claim that the money would have otherwise gone to academics. You can argue that it should but that's different. Further, it's cyclical. Of course, I'm not going to pretend there aren't other forms of support from the university and student fees. However, those are small compared to the budgets as a whole. Yes, the university often does chip in for stadiums, but the university will get rights to use the stadium like for commencement ceremonies. Money spent by universities usually (should) get something in return besides an investment in branding. Finally, like it or not, athletics play a huge role in brand awareness and prestige for the school. If you look at the tiers of schools, that is, Ivy's, Tier 2's, etc., there's little movement inbetween tiers, but there is a lot of jockeying within the tier. Athletics is the most visible way of doing so. When Doug Flutie threw a Hail Mary for Boston College, the following year, they tripled the number of applications they received.
- birdyrooster 7y agoRutgers has a $1.5 Trillion budget?
- snapetom 7y agoOops. Billion. It was late and I was sleepy.