My new Daily Camera column is out today, and this month I focus on budgets for college athletics. Yes, they are growing rapidly and with growth comes some challenges, but financial sustainability is not a particular concern. Here is how it starts:
Many of the issues currently facing big-time college sports result from its incredible popularity. Universities are in the success business, so the fact that campus athletics are thriving is good news, but with success comes challenges.The Camera does not allow comments, but you are welcome to head over there to read it in full and come back here to comment.
The most visible consequence of success is money. The attraction of college sports — mainly football and men's basketball at the top 60 or so schools — has resulted in bigger and bigger television deals. Last year Forbes estimated that the five biggest athletic conferences (including the PAC-12) brought in almost $1 billion in TV revenue. That doesn't even count another $1.5 billion brought in annually by the NCAA March Madness basketball tournament and the college football playoff. Much of this money is distributed among university athletics programs.
The resulting trickle-down effect has seen athletic department budgets swell, with corresponding increases in coaches' salaries and facilities upgrades. Some see the increasing budgets and worry that a crisis is just around the corner. For instance, earlier this year USA Today warned that "college sports may be facing a bubble ... the kind that goes — pop!"
Budgets are increasing, but college sports are not facing a financial bubble. Let's take a look at some data to understand why.
In what follows, I'll provide some links and further reading for those who'd like to dig a bit deeper.
- I refer to a recent USA Today article that warned that college athletics is facing a "bubble" that might soon Pop! That article is here. Concerns about a college sports bubble go back over 100 years. It hasn't popped yet.
- Data on the budgets of CU, University of Louisiana-Monroe and Ohio State University can be found at this blog post. It is hard to fathom that ULM and OSU are in the same college sports division (for football).
- The Chronicler of Higher Education has published a useful database on college athletics spending. The data comes with an important caveat: universities do not account for their programs (athletics and academics) in the same way, so caution is advised in any direct comparisons.
- ESPN has the details on the revival of football at the University of Alabama-Birmingham.
- Obtaining details of budgets on my own campus outside of athletics is not particularly easy. In the article I relied on somewhat dated reporting by the Daily Camera from 2012. Academic units should have the same transparency as athletics, no?
- Economist Andy Schwarz (@andyhre) has an excellent article on this issue at FiveThirtyEight, from which I quote him. Highly recommended.
- For an academic treatment of the issue, I recommend this 2010 article: An Economic Look at the Sustainability of FBS Athletic Departments, by Rodney Fort of the University of Michigan, who is also quoted in my piece.
- The 2016 (spring) syllabus for my class, Introduction to Sports Governance can be found here.