Using Student Fees to Support Athletic Department Budget

Today over on USA Today they’ve got a piece on schools who use student fees and other institutional support to round out the athletic department budget. The piece focuses on Rutgers, but also lists the ten schools who rely the most on these funds in automatic qualifying conferences: 

Schools from BCS automatic qualifying conferences with the greatest amount of 2009-10 athletics revenue allocated from institutional or government support or student fees: 
School, conference Amount
Rutgers, Big East $26,867,679
Connecticut, Big East $14,578,029
South Florida, Big East $14,185,037
Maryland, ACC $13,749,781
Tennessee, SEC $13,552,020
Cincinnati, Big East $13,457,464
Virginia, ACC $12,160,103
California, Pac-10 $12,098,974
Oregon State, Pac-10 $10,960,616
Arizona State, Pac-10 $10,349,536
Note: Amounts not adjusted for inflation

Sources: Individual schools, USA TODAY research in conjunction with Indiana University’s National Sports Journalism Center

A couple of months ago, I did a series of pieces on schools who were relying on student fees to balance their athletic department budget. You can find the Top 25 in the BCS for the 2009-2010 school year here. If you’re curious about a specific school, I posted the numbers for every BCS school by conference. You can find the SEC, Big Ten and Big 12 here, the ACC, Pac-10 and Big East here, and the non-AQ conferences here.

A number of you have pointed out that these student fees often get students free admission to athletic events. Although that’s a nice perk, I wonder what percentage of the student body actually takes advantage of this offer. To me, this is not the best argument in favor of student fees going to subsidize the athletic department.

That being said, I don’t necessarily have an issue with universities subsidizing the athletic department. After all, it is a part of the university. Just as the university funds the English department, they fund the athletic department. When an athletic department is able to support itself, like these we looked at a couple of weeks ago, that’s fantastic. However, I’m not convinced that every athletic department should be expected to do so. Athletic departments should be expected to operate as efficiently and profitably as possible while meeting the goals of the department and the university. What I don’t like to see are universities who are self-sustaining and still receive student fees or institutional support.

Athletics do a number of things for a university. They often receive national attention, which strengthens their brand. This causes increases in applications and licensing revenue, amongst other benefits. I’ve been researching this in-depth for my new book on the business of college football, and I can tell you that there are a number of advantages to a university having an athletic department. I don’t honestly believe that any university would be so fiscally irresponsible as to assist in funding an athletic department if they weren’t receiving a return on their investment, at least not when you look at a broad spectrum of years.

Just some food for thought until my book is out and I can share more concrete examples.

Posted on June 28, 2011, in ACC, Big 12, Big East, Big Ten, Finance, Mid-American, Mountain West, Pac-10, SEC, Sun Belt, WAC. Bookmark the permalink. 6 Comments.

  1. That being said, I don’t necessarily have an issue with universities subsidizing the athletic department.

    But are university subsidies really all that different from student fees? After all, every dollar of institutional support that is spent on athletic department is a dollar that has to be made up through either tuition increases or state support. It almost seems like a distinction without a difference.

    • I meant I don’t necessarily have a problem with either one – student fees or other university subsidies.

      • My bad. That said, I do wonder what sort of RoI schools get for putting money into the athletic department. As far as I know, no major study has been conducted and it would be difficult to quantify how much a quality AD contributes to a school anyways since many of theoretical benefits would be intangible. While I agree that schools likely believe they are investing wisely, I’m not sure people would suddenly forget that (for example) Cal and UCLA are elite universities if the athletic departments were forced to scale back expenditures because the school/state/students stopped contributing to the athletic department.

  2. http://www.govolsxtra.com/news/2011/jun/28/subsidy-for-ut-athletics-detailed/?partner=RSS

    TN is on the list due to accounting differences, according to them. They say it is the way they handle depreciation that puts them on the list, and that actually they are self-sustaining.

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