How Profitable is Ohio State University Athletics Department?

Image via Wikipedia

Yesterday I showed you the line item budget for the Ohio State University football program. The number one comment I saw in response to the piece was something along the lines of, “Ohio State football makes millions and players get nothing.”

I won’t get into the pay-for-play debate again. You can read why I think it’ll never happen here.

Does Ohio State’s football program make tens of millions of dollars? Yes. However, there seems to be some sort of misconception about where this money goes. It does not sit in a “football only” vault simply waiting to enrich the football program. As I’ve shown before, a successful football program will support a number of other sports and supplant the need for institutional support in the form of student fees and other payments from the university.

I think you’ll be surprised to see what it takes to run an athletic program like Ohio State’s. I’ll try and summarize it for you before I bombard you with charts.

Let’s begin at the end and work our way backwards. At the end of the day, Ohio State’s athletic department shows $93,678 remaining after subtracting all of their expenses from all of their revenue. That’s a far cry from the $35,721,714 net profit we saw yesterday from football.

What if I told you they wouldn’t even be showing $93,678 if it weren’t for over $22 million in funds from the Buckeye Club and other forms of fundraising, interest income from the athletic department’s endowment, royalty income and a transfer from reserves?

The over $35 million in profits from football doesn’t go far when you run an athletic department the size and quality of Ohio State University’s. In fact, it costs over $126 million to run Ohio State’s athletic department. Ohio State offers 36 varsity teams – 17 for women, 16 for men and 3 coed. Each sport is fully funded up to the maximum scholarship limit set by the NCAA for each sport. In total, 1,076 athletes are supported by the athletic department.

The profit from football doesn’t even go far enough to cover all of the expenses related to staffing the athletic department. Those expenses add up to over $44 million. Operations cost another $40 million, with over $5 million going back to the university to pay for the athletic department’s share of overhead (which includes insurance, payroll services, purchasing and accounting).

Grants-in-aid are another huge expense for any athletic department. Ohio State’s athletic department sends almost $16 million back to the university to cover athletic scholarships. Another academic-related expense that isn’t often publicized is to fund the Student-Athlete Support Services Office, which takes over $2 million. I’ve read commentary criticizing athletic departments for straining the time and budget of the academic portion of the university because of the academic support needs of student athletes, but clearly Ohio State has found a solution to this problem and the athletic department is taking it upon themselves to fund this need for its student athletes.

Overall, more than 25% of the athletic department’s budget is for monies paid to other departments of the university. In addition to those items listed above, the athletic department provides funding to several other efforts around the university. The athletic department funds a $200,000 operating budget for the band, but in addition they send additional support of $100,000 to the School of Music. Fiscal year 2012 will also see a $1 million donation to library renovation efforts, the fifth of nine annual payments scheduled to support the library. Another $250,000 goes to fund LifeSports, a four-week summer program for inner-city children.

Here is the breakdown of all expenses:

ATHLETICS FY 11-12
    Proposed
    Budget
USES:    
A & P Staff $20,785,611.00
CCS Staff   $2,280,846.00
Specials   $10,117,329.00
Student Wages $1,812,700.00
Benefits   $9,606,237.00
Subtotal Personnel: $44,602,723.00
     
Operating $33,263,693.00
Equipment $591,402.00
Physical Plant Assessment $456,000.00
University Overhead  (5.9%) $5,200,000.00
Subtotal  Operations $39,511,095.00
     
Cost Containment $1,090,000.00
Grant-in-Aid $15,702,000.00
University Transfers $1,750,000.00
Bowl Game Direct $0.00
JSC Operating Transfer $2,090,030.00
SASSO Funding Transfer $2,384,421.40
Transfer To Library $1,000,000.00
Transfer To Athletic Reserves $0.00
Non-Operating, Life Skills & SAOF $1,600,000.00
Subtotal Other Uses $25,616,451.40
     
Ohio Stadium $12,700,689.00
Jesse Owens Stadium $471,551.00
Scoreboard $0.00
Wexner Football Center $0.00
Softball Stadium $0.00
Boathouse $596,703.00
Woody Hayes Sport Fields $985,380.00
Outdoor Sports Fields Renovation $460,000.00
Overhead on Capital Sources $290,000.00
McCorkle Aquatics Bond $1,150,000.00
Subtotal Capital Uses: $16,654,323.00
     
TOTAL USES $126,384,592.00

As you’ve seen, even the handsome profits made by football are not enough to run an athletic department the size and quality of Ohio State’s. So where does the rest of the money come from? Here’s a breakdown of each source of income detailed in the 2011-2012 budget:

ATHLETICS FY 11-12
    Proposed
    Budget
Sources:    
Football   $48,761,850.00
Basketball – Men $16,977,200.00
Basketball – Women $595,000.00
Ice Hockey – Men $580,000.00
Other Sports – Men $195,000.00
Other Sports – Women $51,000.00
Subtotal Sports: $67,160,050.00
     
Admin and Misc  $9,842,850.00
Golf Course $3,964,850.00
Sports Camps & Clinics $3,202,000.00
Bowl Games – Big Ten $2,231,000.00
Ice Rink   $369,000.00
Parking    $1,708,520.00
Championships & Tournaments $250,000.00
Fan Experience $60,000.00
Merchandising $1,775,000.00
Subtotal Athletic Operations $23,403,220.00
     
Bowl Game Direct $0.00
Buckeye Club $10,800,000.00
Other Fundraising & NCAA SAOF $1,600,000.00
Interest Income from Endowment $1,900,000.00
Royalty Income  $3,900,000.00
Transfer from Reserves $4,000,000.00
Subtotal Other Sources: $22,200,000.00
     
Total Operating Sources $112,763,270.00
     
Capital Sources  
Stadium Ticket Surcharge $3,565,000.00
Stadium Club Seats $5,600,000.00
Stadium Suites $4,550,000.00
Stadium Scoreboard Increase $0.00
Trans from McCorkle plant account $0.00
Trans from Plant Reserves $0.00
Subtotal Capital Sources $13,715,000.00
     
TOTAL SOURCES $126,478,270.00

Keep in mind that this budget is not the final budget for 2011-2012. Certainly some adjustments will need to be made after this week’s news that Jim Tressel has resigned, and I’m told that raises for personnel have not yet been determined.

Check back tomorrow for a detailed look at how recruiting dollars are spread amongst the sports at Ohio State!