Category Archives: Finance

The saying goes “you get what you give.” Can the same phrase be applied to sports though? In recent years, schools that have won championships are the ones who have invested more money into their programs. Our very own Kristi Dosh, ESPN’s sports business reporter and founder of BusinessofCollegeSports.com, has a piece on schools with the highest revenue that have made it into the tournament, but what about the schools who have the highest expenses?

If it were to come down to spending, who would win it all? Here’s a look at all 64 teams including their overall expenses for their basketball program. All 32 games are broken down by region. The information below is from the Office of Postsecondary Education of the U.S. Department of Education.

Before one makes an argument about Kentucky (the reigning champs, whose total expenses came to $15,119,088, about $300,000 less than Louisville), unfortunately money doesn’t buy a new recruiting class or guarantee a win.

Duke for example beats out Louisville by $411,145; and Louisville is the number one seed in the tournament.

If the Final Four were to come down to the biggest spenders of each region it would be Kansas, Arizona, Syracuse and Duke.

Taking a look at the winners of each region, could there be a connection between spending more and winning a national championship?

As you will see in this years bracket the winner would be Duke. Interestingly enough, Duke has the most National Championships compared to the other three remaining schools.

What makes up a team’s expenses is a multitude of disbursements that can include athletes room and board, equipment, and travel expenses, but a big part of team spending is used to pay the head coach.

Without quality coaching a team won’t even make it as far as The Big Dance, and the better the coach, the more a school is willing to spend to keep them. How much of the overall expenses are paid to the coaches? The information is from USA Today and the Arizona Star.

The coaches whose teams that have made it to our predicted Final Four aren’t doing too bad for themselves. Coach Boeheim of Syracuse might want to look into asking for more money though, since he’s the only coach who isn’t getting paid at least a quarter of what is being spent.

Louisville, who was just short of Duke in expenditures, was the highest not only in revenue, but also net revenue. Just trailing slightly behind Louisville is Syracuse and Duke. As mentioned earlier, Louisville is the number one seed in the tournament, and is also favored to win by many.

All in all, could money be a beneficial factor in winning a championship? Only the next few weeks will tell.

Follow Mackenzie on Twitter: @KenzieThirkill 

Editor’s Note: Creighton’s expenses were incorrectly listed as $404,350 in the original post. The error has been resolved.

Last week the Southern Conference made an announcement that had been rumored for weeks: Davidson has rejected the Colonial Athletic Association’s invitation to join and will remain in the Southern Conference. While some may be surprised at Davidson’s decision to remain in a less highly-rated conference, the decision actually makes sense for a number of reasons.

First, although the CAA is a higher rated basketball conference (14^th in last year’s RPI compared to the Southern Conference’s 23^rd), moving to the conference wouldn’t have necessarily benefitted Davidson’s basketball program.  It could have actually harmed the program.

Davidson’s men’s basketball team is currently the cream of the crop in the Southern Conference.  This would not be the case in the CAA.  Although the CAA has recently received multiple tournament bids, it is usually a one bid conference like the Southern.  In moving to the CAA, Davidson would be moving to a tougher one bid conference, thereby harming its chances of making the NCAA tournament on a regular basis as it recently has done as a member of the Southern Conference.

Second, I doubt Davidson would realize much, if any, financial benefit from moving to the CAA.  Although the CAA did recently sign a television deal with NBC Sports Network that will increase the conference’s national exposure ( NBCSN will carry 18 CAA men’s basketball games nationally this season), the CAA members receive no money from the deal.  NBCSN pays for the members’ production costs.  That’s it.  And there is no guarantee that any of Davidson’s games would actually be selected for a national broadcast.  NBCSN did not select one of my alma mater’s games for a national broadcast this year.

It is true that the CAA has recently received much larger payouts from the NCAA’s Basketball Distribution Fund than the Southern ($3,355,296 versus $2,156,976 for the 2010-2011 season).  However, most of the CAA’s larger payout has been a result of VCU’s recent NCAA tournament successes.  With VCU now gone to the Atlantic 10 and Old Dominion leaving the CAA next year for Conference USA, the CAA is losing two of its basketball programs most likely to experience deep tournament runs. As a result, the Basketball Fund payouts for the CAA and the Southern will likely be much closer in the future.

Lastly, Davidson is just different than most other Division I members.  It is content with its current position in the college sports pecking order.  There is nothing wrong with that.

Despite Davidson’s rejection, the CAA didn’t leave its foray into the Southern Conference empty handed.  On Friday, the College of Charleston’s board of trustees gave the school’s president authority to negotiate Charleston’s entrance into the CAA.  Charleston’s president cited a number of reasons for being in favor of the move: stronger conference opponents, increased opportunities for at-large bids to NCAA tournaments, the ability to  recruit better student-athletes, stronger academic support for student-athletes, alumni living outside South Carolina will now have access to Charleston games, and access to the resources of the Colonial Academic Alliance, which promotes undergraduate research, study abroad opportunities, and faculty and staff professional development.  It’s obvious from this list that Charleston is looking to enhance its athletic and academic programs in making the move.

So, with Charleston in the fold where does the CAA go from here?  Look for at least one other Southern Conference member to join Charleston in the CAA at some point.  Rumors have focused on UNC-Greensboro, Elon, and Furman. Whatever happens, don’t expect the CAA to retain whatever membership configuration it ends up with for long.  There are only 4 teams remaining from what was the CAA when I graduated in 2001.

On a side note, if there would have been fewer defections since then, along with a few additions, the CAA would be even better basketball-wise than it recently has been.  Check out this hypothetical conference line-up: Richmond (left after 2000-2001 season), VCU (left after 2011-2012 season), Old Dominion (leaving after 2012-2013 season), East Carolina (left after 2000-2001 season), George Mason, Drexel, Delaware, William and Mary, UNC-Wilmington, James Madison, Northeastern, and Charleston.  That conference would compare favorably to any other mid-major basketball conference in the nation.

Yesterday, the Atlantic 10 Conference announced that Butler University would join the conference on July 1, 2012–one  year earlier than anticipated.  Gaining Butler a year ahead of schedule grants the Atlantic 10 Conference the benefit of competing with 16 member institutions during the 2012-13 school year, before Temple and Charlotte depart the conference.  While this is definitely a perk for the conference, perhaps the biggest benefit the conference gains in Butler’s expedited admission is the chance to become a basketball powerhouse.

Although the Atlantic 10 Conference does not receive the same media recognition as BCS AQ conferences, in recent years, the Atlantic 10 has made its name as a conference which is consistently competitive in basketball.  Thus, it is no surprise that in selecting new institution members during the course of conference realignment, that the Atlantic 10 has aligned itself with some of the best-performing basketball schools in recent years:  Butler and VCU.

Much has been said about the roles that football and television contracts played and continue to play in conference realignment decisions.  However, one cannot turn a blind eye to the power of a strong basketball program when it comes to attracting conferences.  Although basketball does not have the monstrously large viewership numbers that football does, it does have a wide enough following to garner billion dollar contracts for the television rights to March Madness.  On top of the television contract negotiation potential strong basketball programs present, there is also the fact that the greatest portion of the revenue distributed by the NCAA is distributed to conferences based upon their team’s March Madness performance.  Given these factors, it is apparent why the Atlantic Ten Conference has based its stake in conference realignment not upon football prowess, but upon basketball.

As noted above, of the revenue distributed by the NCAA to conferences and member institutions, the greatest percentage goes towards something called the “Basketball Distribution Fund.”  Conferences receive payouts from the fund based upon their member institution’s performance in the Division I Men’s Basketball Championship over a six-year rolling period.  A basketball program earns one unit for each March Madness game they compete in, save for the National Championship game.  For the most recent year in which data is available, 2010-11, the NCAA distributed $479 million to conferences and member institutions through the Basketball Distribution Fund.  This amounted to 40.5 percent of all revenue distributed by the NCAA in 2010-11. 

The follow chart shows the number of Basketball Distribution Fund units that the Atlantic 10 Conference has earned over the last three years.  The chart depicts what the conference earned through its actual members’ performances in a given year, and also notes how many additional units that the conference could have earned if Butler and VCU were conference members in a particular year.

When considering the chart above, the presence of Butler and VCU in the Atlantic 10 clearly generates additional revenue for the conference.  In 2010, three Atlantic 10 schools participated in March Madness:  Richmond, Temple and Xavier.  These schools accumulated three units for the conference.  Had Butler been an Atlantic 10 member in 2010, the conference would have nearly tripled its Basketball Distribution Fund units, while also receiving a payout for Butler’s National Championship game appearance.  If Butler and VCU were Atlantic 10 Conference members in 2011, the conference would have earned an additional ten Basketball Distribution Fund units and again, received a payout for Butler’s National Championship game appearance.  Similarly, in 2012, the Atlantic 10 Conference could have received an additional two Basketball Distribution Fund units had VCU been a member of the conference.

While the amount of revenue generated from basketball contracts and the Basketball Distribution Fund is meager compared to the amount of money football generates, not every conference can woo college football powerhouses to their stables through conference realignment.  Thus, what the Atlantic 10 Conference has accomplished through conference realignment is noteworthy.  Although it will lose a historically sound basketball program in 2014 when Temple leaves for the Big East, it has replaced that leaving member with two noteworthy programs.  Additionally, the Atlantic 10 has attracted two members which in recent years, the general public nationally has been interested in watching.  With young, charismatic coaches that also boast successful track records in Brad Stevens and Shaka Smart, Butler and VCU respectively have garnered Cinderella story followings across the country.  One can expect the Atlantic 10 to capitalize upon this should either team have similarly successful March Madness runs in the future.

Overall, while the Atlantic 10′s conference realignment path was not driven by football, it appears that the conference has been successful in laying a new foundation for its future.