Patterico's Pontifications

12/31/2015

As We Settle in for the College Football Marathon

Filed under: General — JVW @ 12:16 pm

[guest post by JVW]

Yes, the bowl season has been going on for a few weeks now, but New Year’s Eve has traditionally marked the key date in the college football postseason, from the days of my youth in which the Sun Bowl and Peach Bowl were traditionally played to the present day in which for the first time the two national championship semifinal games will take place at the Orange Bowl and the Cotton Bowl.

So, since being a curmudgeon is half the fun of being a conservative, let me take this opportunity to point out an interesting article from The Chronicle of Higher Education which calls into question the oft-heard claim from the NCAA Division I member programs that the massive revenue from college football and basketball pays the way for the entire athletic program at their institutions. Last month, The Chronicle reported that, based upon data provided by private colleges and universities via freedom of information act requests, only 6 of 201 Division I sports programs at public universities for which they received data (the state of Pennsylvania does not require its public universities to divulge their athletic spending and several other colleges failed to report their results by the deadline) managed to break even in their athletic departments. In fact, according the authors, the schools surveyed subsidized their athletic programs to the tune of $10.3 billion dollars over the past five years, with much of that money coming from mandatory student fees.

The Chronicle link includes an interactive chart which is sortable by school, conference, revenue, and subsidies. In itself, it provides quite an interesting look at how big time athletics works at these member schools. For those interested, the six schools which purport to have operated Division I athletics programs without subsidies from 2010 through 2014 are the following: the University of Oklahoma, the University of Texas, Louisiana State University, Ohio State University, the University of Nebraska, and Purdue University. It appears that in general, the schools in what are commonly termed the Big Five Power Conferences are on more solid financial footing than the smaller conferences, as the high costs of their huge athletic programs are helpfully offset by lucrative television contracts which each year pump as much as $30 million per school to conference members, with even higher payouts set to follow in coming years. Teams from less prestigious conferences, especially those who play both Division I football and basketball, appear to rely the most upon student subsidies with Rutgers University, James Madison University, the University of Connecticut, and the University of Cincinnati listed as requiring at least $27 million in subsidies in 2014.

Professors Jody W. Lipford and Jerry K. Slice, economists at Presbyterian College, recently published an academic paper which provides further insight into the extravagant ways of many NCAA sports programs. The paper is nicely summarized by an article the authors wrote for the John William Pope Center for Higher Education Policy. Professors Lipford and Slice have discovered that which should be considered obvious: smaller schools who try to compete in conferences with the big boys generally require heavier subsidies. They compare two public universities in North Carolina with two private universities in the state, all four of whom are members of the Atlantic Coast Conference:

Flagship state universities, the University of North Carolina at Chapel Hill and North Carolina State University, spend heavily on athletics, but also have large numbers of students. Their per-student costs are about $4,500 and $3,000, respectively. In the analysis by the Chronicle of Higher Education, UNC receives subsidies of 11.1 percent of total athletic costs, while NCSU receives slightly less (9.7 percent).

For DI-A (FBS) private schools Duke and Wake Forest Universities, with about 6,500 and nearly 4,800 students, respectively, per-student costs are around $12,000.

Note that the authors are not claiming that students at each of these institutions subsidize their school’s athletic programs with the above sums, they simply point out that running a big athletics department is probably more feasible at a school with 25,000 students than it is at a school with 6,000 students. However, it should still be pointed out that both North Carolina public universities, each of whom has been traditionally successful in football and basketball, still rely upon subsidies to maintain their programs.

One common refrain from defenders of the current system is that football and basketball would break even, but it is the non-revenue sports like baseball, softball, track, swimming, gymnastics, and volleyball — many of which are required under Title IX regulations — which push athletics department into the red. While there is certainly some merit to the idea that operating certain sports at a loss cuts into the football and basketball profits, the Washington Post recently pointed out that the increases in television and ticket revenue for celebrated athletic programs is mostly being offset by higher levels of spending on those same revenue-generating sports. This shouldn’t come as a surprise to all of us who have bemoaned the fact that massive increases in tuition and taxpayer-backed loans have led to an explosion of administrative bloat in academic programs. It turns out that massive increases in revenue in athletics programs lead to expensive new facilities and extravagantly paid coaching staffs including million-dollar assistant football coaches and similarly well-paid basketball assistants.

Enjoy the games coming up, but know that you are paying for them not only by supporting the TV advertisers, purchasing the tickets, buying the logo gear, and donating to the athletics fund, but also by subsidizing the loans that the students are taking out to pay their tuition, some of which is being spent on the field, on the court, on the diamond, in the pool, on the track, on the mat, and in the gym.

– JVW

19 Responses to “As We Settle in for the College Football Marathon”

  1. In addition, treating “star” athletes and coaches differently from other students and instructors presents the moral hazards of a Jerry Sandusky-like situation — an exploiter who can’t be reigned in.

    Pouncer (d90bef)

  2. my picklhead nephew he got a concussion and we’re still trying to make hiom not hurt all the time his best friend blew out his knee to where he’ll need a replacement

    these are kids

    football is no good and the NFL is all ignant thugs

    and ESPN is a low-class disneyslut

    what a sad country what does this child abuse on poor kids

    no wonder the whole whirl hates you trashy failmerican guts

    happyfeet (831175)

  3. *picklehead* nephew i mean

    happyfeet (831175)

  4. oh. *him* not hurt all the time i mean

    happyfeet (831175)

  5. Mr. Happy Feet,
    I advise you and your nephew to stay out of sports. Particularly those your are not qualified
    to play, manage, or criticize. Leave it up to those of us that can manage to play
    and evaluate the sport well enough to prevent disaster.
    You would benefit more if you took a English grammar course at a remedial school.

    Pro Player

    Pro Player (d7aa79)

  6. It’s the #4 Oklahoma Sooners vs the undefeated #1 Clemson Tigers in the Orange Bowl. However Oklahoma is favored by 3.5 points. I say take the Sooners and give the 3.5 points. Also, the over/under is 65 points total. Take the Under.

    ropelight’s picks: Oklahoma – 3.5, and under 65 points.

    ropelight (fd3ae4)

  7. USC has a huge and successful program that supports all the Title IX programs that have devastated men’s minor sports.

    The program seems to be at sea lately with the history of turnstile football coaches. The game last night was so bad I turned it off.

    I have a theory that presidents of universities with successful football programs are all ashamed of them. They all want to be president of Harvard or MIT. That is the only explanation I can think of for the stupidity of the SC administration. The last good hire was John McKay. Pete Carroll walked in one day and volunteered as he was visiting his daughter on campus. Garrett never liked him and declined to support him when Reggie Bush’s parents screwed up big time.

    I hope Helton can do it but I do wonder.

    Mike K (90dfdc)

  8. ,Ohio State University,

    You neglected to include the The. It’s something all the Buckeye players say, even though it makes no sense. I’m pretty sure it started when they would hear the Michigan players say they went to the University of Michigan, which does make sense.

    dee (a76115)

  9. Using “The” to indicate the first among equals took hold in academic institutions during the late ’70, instead of an Executive Vice President with the usual array of subordinate VP’s the Monkey See/Monkey Do fad designated the 2nd banana as “The” VP. It was a silly pretension then and it’s even more pretentious, shop worn and silly now.

    ropelight (fd3ae4)

  10. Pro Player i tried to go to the grocery store but it was nothing but wall to wall crazy people and they didn’t have no onions

    no onions can you even belieber it

    this year sucked

    happyfeet (831175)

  11. happyfeet, sports such as football build character and instill a work ethic lacking in sissy boys.

    mg (31009b)

  12. In what way does “the [state] State University” not make sense?

    Milhouse (8489b1)

  13. yes yes yes character is good

    character + knees is better though

    happyfeet (831175)

  14. espy can shove the college football up their disney loving wazoo.
    They can’t go under fast enough.
    Nothing but a bunch of Manning rump swabs.

    mg (31009b)

  15. I scanned the data linked to the article, and I was amazed to find that while they included numerous sources of revenue (9 categories, plus a catch-all “other”), they had just one item relating to expenses, called `inflation_adjusted_athletic_expenses`, which is defined as (see row 23 of the data dictionary):

    Adjusted for inflation; Per NCAA Revenue/Expense form: Includes athletic student aid; guarantee expenses; coaching salaries, benefitsm and bonuses paid by the university and related entities; coaching other compensation and benefits paid by a third party; support staff/adminstrative salaries, benefits and bonuses paid by the university and related entities; support staff/administrative other compensationand benefits paid by a third party; severance payments; recruiting; team travel; equipment, uniforms and supplies; game expenses; fundraising, marketing, and promotion; sports camp expenses; direct facilities, maintenance and rental; spirit groups; indirect facilities and adminstrative support; medical expenses and medical insurance; memberships and dues; other operating expenses

    The non-adjusted data is repeated in the rows beneath, and various calculated fields complete the data set.

    They’ve comingled income from unnamed third parties in the only expense accounting provided. I don’t know enough about the situation to speculate on the size of these third party payments, but this certainly raises a question about the article, because those revenues are then considered expenses. They also include facility expenses which are described as maintenance and rental. This is the sort of accounting that can readily be abused. If a state university has dumped a ton of money into a new stadium, built by union labor like everything else done by the state, it has a gigantic white elephant. How does the university account for this enormous fix cost?

    It is also the case that the “athletic student aid” which is included in the athletic expenses item, (which I take to mean their “athletic scholarships”,) is based on the tuition charged all students. It could be argued that the marginal cost of these student scholarships is far less than the nominal tuition, since adding a few more students incurs only modest increases in the costs of teaching and administering the thousands of students otherwise in attendance. This presumes, of course, that athletic scholarship students are enrolled in classes that would normally be offered, and not in special classes that are required to accommodate the student athletes.

    Nevertheless, this is an interesting article. I think the best way to encapsulate the whole thing is to remember the “Cargo Cult” societies that sprang up on our abandoned airbases in the Pacific islands following WWII. The natives thought they could restore the good old days by replicating the appearance of an operating airbase. The presidents of these failing universities think they can rise to greatness by copying “great” universities. With just a handful of “great” universities, what are the odds that Georgia State will become another one by replicating the physical amenities that characterize the more prominent “great” universities. What are the odds that 200 such failing universities can all achieve such prominence?

    They’d be far better off if they determined a development strategy that built on the strengths they have, instead of wishing they could become one of the very rare successes as a major sports school.

    BobStewartatHome (a52abe)

  16. Clemson wins over Oklahoma 37 to 17. Alabama is favored 9.5 points over Michigan State and the over/under is 46.5 total points.

    I say take Michigan State plus 9.5 and skip the over/under or go with a small wager. I favor the over by a slight margin.

    ropelight (fd3ae4)

  17. #17 is inoperative. My evil twin took over my computer. I’ve sprinkled salt on my keyboard and now he’s gone to Sarasota.

    ropelight (cc19b1)

  18. BobStewartatHome (a52abe) — 12/31/2015 @ 3:32 pm

    Hey BobStewartatHome, thanks for the great comment. Sorry I wasn’t able to respond earlier. There is a whole lot more that could be said about the interesting ways that universities finance their athletics programs and some of the — how to put it? — inventive accounting measures they employ, but my post was long enough as it is and I didn’t want to add parts about how universities count stadium upkeep against the facilities budget rather than the athletics budget or how they overinflate the value of a athletic scholarship in order to make the books look good. Maybe I’ll come back sometime later and write about those issues too.

    dee (and ropelight, who responded to dee), I’m well aware of OSU’s insistence that the name of the university be prefaced by the definitive article, but I won’t abide by that silly pretense. And Milhouse, I would never expect to hear anyone say “the California State University, Sacramento” or “the California State University, Fullerton.”

    JVW (d60453)


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