Blog Archives

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!

Ohio State’s Football Budget

To kickoff Ohio State Week on the BusinessofCollegeSports.com I want to start by looking at the line item football budget. Check back each day this week for more Ohio State numbers, including recruiting expenses and overall athletic department budget. 

Below you’ll see numbers for both the 2010-2011 and 2011-2012 school years. These numbers were obtained directly from the Ohio State University athletic department. Please note this 2011-2012 budget was prepared before the events of this past weekend, so you can expect some changes, especially with regards to coaches salaries. Also, decisions on raises for all personnel have not yet been made.

One thing to note as you take a look is that Ohio State has 7 home games in 2011-2012 compared to 8 in 2010-2011. Interesting to see how that impacts the overall budget both in terms of revenue and expense. Be sure to read after the chart to see how some of these numbers fit into the athletic budget as a whole.

  Budget   Budget
  2010-2011   2011-2012
REVENUE      
Visitor Guarantees -7,148,050   -5,923,040
Concessions 1,960,000   1,715,000
Season Tix – Fac/Staff 6,868,000   6,009,500
Season Tix – Students 5,002,500   4,785,000
Public Ticket Sales 30,310,760   25,605,040
Postage & Handling 0   0
Television 10,700,000   11,415,300
Broadcasting 1,296,050   1,246,050
Guarantees 2,850,000   3,909,000
Miscellaneous 0   0
       
Revenue Total 51,839,260   48,761,850
EXPENSES       
A & P 3,447,937   3,707,931
CCS 97,455   109,537
Specials 331,800   322,000
Grad Students 29,743   45,844
Additional Pay 0   0
Student Wages 32,000   32,000
Benefits 1,208,582   1,383,456
Benefits Fee Waivers 48,000   72,000
Clinical Supplies 112,625   47,500
General Supplies 25,000   25,000
Video Supplies 18,000   21,150
Clothing & Equipment 173,400   173,400
Postage 35,000   35,000
Communications 69,800   69,800
Equipment Rep & Maint 53,000   59,300
Building & Grounds Rep & Mnt 25,000   25,000
Equipment Rental 6,000   8,945
Space Rental 4,500   6,300
Copy Services 27,500   27,500
Photo Services 25,000   25,000
Printing 51,000   51,000
Recruiting 484,000   438,500
Misc Travel 129,500   129,500
Team Travel 750,310   890,735
Purchased Services 85,250   85,250
Game Day Expenses 1,120,000   925,000
Dues & Memberships 1,800   1,800
Subscriptions 2,200   2,200
Meals 470,290   462,421
Banquet 29,000   30,875
Lodging 204,328   224,084
Shipping & freight 0   0
Officials 118,650   104,450
Grant In Aid 3,307,000   3,413,000
Capital Equipment 51,860   84,658
       
Expense Total 12,575,530   13,040,136
       
Net Profit 39,263,730   35,721,714

A few of the categories probably need clarification. A&P is Administration and Professional staff salaries. This category includes the salaries of all coaches. CCS is pay for Civil Service Personnel, who are support staff belonging to a union. Specials can cover a number of items from special event staff to incentives that may be paid to coaches as a part of their contract.

I think it’s interesting to see all the expenses associated with running a top-notch football program like Ohio State’s. I won’t comment on many of the categories, but I wanted to let you see them all. As I noted earlier, Ohio State has one less home game for the 2011 season. Amazing what a difference one game can make. The loss of that one home game costs Ohio State roughly $3 million!

As you can see, the two biggest expenses are salaries and grants-in-aid (payments back to the university for scholarships). Administrative and Professional salaries for football account for 18% of all salaries in that category in the athletic department, and grants-in-aid for football are nearly 22% of all aid granted by the athletic department. Football has the greatest number of athletes participating, so this should be no surprise. 

I often hear fans lament the great amount of money spent on football compared to other sports. However, football is the one sport where you can likely spend more to make more. Revenue from football accounts for 73% of all revenue generated by individual sports at Ohio State, and football is one of only two sports who turn a net profit. Later this week I’ll show you how the profit generated by football supports the athletic department as a whole, proving the investment in football is a wise one. Until then, you can read my previous piece on how “other sports” are funded.

Will NCAA Show Consistency When Ruling on Ohio State’s Infractions?

If you read this site regularly or follow me on Twitter, you know that I am in Ireland from May 17-25th. While I’m away, I’m sharing with you the work of Patrick Rishe, my collegue at SportsMoney on Forbes.com.

By: Patrick Rishe

On June 10th, 2010, Yahoo Sports reported that the NCAA’s probe into USC’s athletics program resulted in:

• A postseason ban in football following the 2010 and 2011 seasons;

• A loss of 30 total football scholarships over the 2011, 2012 and 2013 seasons;

• 4 years probation;

• A vacation of all football victories starting in December 2004 and running through the 2005 season, including the national championship win over Oklahoma in January 2005.

Many of these penalties were levied after the NCAA’s lengthy review of wrongdoing within the USC football program.  Specifically, wrongdoing by Reggie Bush and his family which included multiple cash payments from would-be sports marketing agents, a house for Bush’s parents, an automobile outfitted with rims and a stereo system, airfare, hotel stays, limousine service, meals, auto repairs, clothing, furniture, and appliances.

Now there is no question that these penalties were quite severe.  Partly because of the nature and the volume of infractions at hand (there were other infractions with USC’s men’s basketball and women’s tennis programs).  And partly because, in my opinion, the NCAA had additional venom because they felt the USC athletics department and the Bush family were less than accommodating during the investigation.

Prior to the penalties being levied during the investigation, I can recall friends of mine who did and still work within the NCAA using words like ‘arrogant’ and ‘elitist’ to describe former USC athletics director Mike Garrett.  An attitude that, at the time, permeated throughout the program.

An antagonistic, defiant attitude that showed little contrition or remorse over its actions.  And thus, garnered little sympathy or leniency when the NCAA handed down its punishment.

Conversely, at least prior to December 2010, I don’t think the average college football fan would use those same words and sentiments to describe Ohio State athletics.  I had the impression that NCAA Headquarters looked upon the Buckeye program rather favorably.

So that’s why the NCAA’s ruling and assessment of penalties for Ohio State on August 12th is so compelling.

Will they punish the Buckeyes more or less than they punished the Trojans?

Will that decision be based solely on a comparison of the infractions at hand, or will the NCAA show leniency towards Ohio State because (a) they proactively imposed self-penalties once the truth was discovered and (b) are better liked by NCAA administrators because the program is perceived more positively than USC’s program?

To review the Buckeyes’ mess:

- Coach Jim Tressel was notified in April 2010 via emails from a Buckeyes fan and former player that Ohio State players were trading signed jerseys and other memorabilia to a Columbus tattoo parlor owner for cash and reduced-price tattoos;

- Even though his contract and NCAA rules required him to notify athletic director Gene Smith, Ohio State President E. Gordon Gee or the university’s compliance department about this information, Coach Tressel did not;

- It was not until more than 9 months passed—and five players including quarterback Terrelle Pryor had been suspended for the first five games of the 2011 season—that Ohio State officials discovered the emails and confronted Coach Tressel. He finally admitted he knew of the players getting improper benefits;

- Coach Tressel was originally suspended for 2 games—later extended to the first 5 games this fall to match the punishment of the five players—and was fined $250,000, required to make a public apology, receive a public reprimand, and attend an NCAA compliance seminar which he will do June 6-10 in Tampa.

And just when you thought you heard the last of it, the Columbus Dispatch reported Saturday that the university is officially investigating used-car sales to at least eight football players and 11 players’ relatives from two Columbus, Ohio dealerships.

Now Ohio State, along with the rest of us, must sit back and await whether the NCAA chooses to impose further sanctions.  The ruling is set for August 12th.

So this begs the question: “What is equitable punishment for Ohio State when comparing their infractions to the infractions and penalties imposed upon USC?”

As it relates to athlete-specific violations, it seems that Reggie Bush’s infractions were more severe than Ohio State players selling their own memorabilia and getting discounted tattoos…though if fire follows the smoke from the afore-mentioned car sales report, that “severity gap” closes.  Especially if players and their relatives were getting discounted cars in exchange for Buckeye football tickets.

And I fear that ‘that’ fire might combust before summer’s end.

As it relates to the behavior of the coaches involved, at least former Trojans and current Seattle Seahawks coach Pete Carroll had the good sense to get out of dodge before the mess landed on his front lawn.  Maybe he knew what Reggie Bush was up to, but it’s plausible that he didn’t.  Whether you think him corrupt, naive, goofy, aloof, or all of the above, there is no evidence to date that he knowingly lied to his superiors or NCAA investigators regarding Reggie Bush.

Conversely, Coach Tressel knowingly LIED.  He lied to his superiors at the university.  And his calculated deception allowed ineligible student-athletes to compete for Ohio State during the 2010 season.

Student-athletes have the luxury of falling back on the ”young and dumb” argument in the court of public opinion.  Coach Tressel does not have that luxury, especially since he and former players have had previous brushes with the NCAA both at Ohio State and his previous employer Youngstown State.

Just ask Tennessee and Bruce Pearl how the NCAA likes it when you lie to them.  Pearl lost his job because Tennessee wanted to save face with the NCAA, and we’ll find out in a few weeks when they go in front of the infractions committee whether this firing curried any favor.

So if a coach’s lies are seen as equally afoul of the rules as a player’s inappropriate receipt of money and gifts, then we should expect that Ohio State will receive further penalties come August.

Vacated wins?  Check.

Lost scholarships?  Check.

Bowl ban?  Check.

And, at the very least, a one-year suspension of Coach Tressel.  It still would not surprise me if Coach Tressel resigned in light of the continued heat he will face in the upcoming months.

Yet, there’s a small part of me that thinks the NCAA may not be as harsh with Ohio State as they were with USC.

I go back to the animosity that NCAA officials had with the USC program.  The NCAA went after USC the same way the federal government went after Barry Bonds.  They were unrelenting in their pursuit of justice, and they ultimately ‘got their man’.

At least Ohio State has shown a level of contrition which USC never did.

At least Ohio State was willing to impose penalties upon themselves which USC never did.

And because the athletic department has been proactive once the truth was revealed, this might be just enough to lessen the severity of the oncoming and added sanctions.

A fortune teller I’m not, but I can tell you that Coach Tressel and Ohio State football are about to lose a fortune’s worth of credibility and respect.

Only time will tell how severe the upcoming sanctions will be, and whether said sanctions will jeopardize the Buckeyes’ stranglehold on Big Ten football dominance.

But the NCAA is on trial as well, and there will be many interested observers ready to critique if the Buckeye sanctions are inequitably different from USC’s.

******************************************************************

Follow Patrick on Twitter @SportsDocRock or visit www.patrickrishe.net

Student Ticket Prices in the Big Ten

Michigan Student Section - Taken by Flickr user grgbrwn

After looking at student fees at various universities, many of you were interested to see the relationship between student fees and student ticket prices.

The Big Ten had the least number of universities relying on student fees of any conference. I previously discussed how that might be related to football revenue. Perhaps it’s also related to ticket demand, however, with many of the Big Ten schools having strong football and men’s basketball programs.

So, when students are paying little, if anything, in student fees to the athletic department, how expensive is it to attend a game?

School Student Activity Fee Football Student Ticket Price Basketball Student Ticket Price Packages Availability
University of Illinois $2,961,577.00 $99.00 $156.00 $134 for Block I season football tickets, which includes t-shirt, kickoff party and more  
University of Iowa $525,707.00 $175.00 $75.00   If more applications received than football season tickets available, priority given to those who completed application by certain deadline.
Indiana University $23.00 $30.00 N/A $270 for dual football-basketball season package  
University of Michigan $0.00 $250.00 $99.00-$125.00   Students must be registered for at least half-time in the fall for football season tickets. For away games, there is a lottery if more applications received than tickets available.
University of Minnesota $0.00 $91.00 $131.00    
Purdue University $0.00 $119.00 N/A $250 for dual football-basketball season package  
University of Wisconsin $0.00 $174.00 $220* *$110 for half-season basketball tickets with two different 9-game packages available Football tickets are first-come, first-serve, not lottery style. Undergrads go first with 1,700 tickets held for grad students who begin purchasing two weeks later.
Ohio State University $0.00 $165.00 $132.00   Availability for football season tickets based on seniority and FT status. Basketball season tickets only include Big Ten games and opening night. Students may also order one ticket each to remaining games for $16/game. Only 1,400 student season tickets available for basketball.
Michigan State University $0.00 $136.00 $171.00   Availability for football season tickets based on seniority and FT status
Penn State University $0.00 $218.00 $59.00   Released for sale based on class (senior, junior, etc.) until sold out
Northwestern University N/A Free with tuition Free with tuition   Young alumni season tickets available for football and basketball.

Those with student fees providing revenue to the athletic department didn’t have the cheapest student tickets in the conference. Illinois did come in below the average $145 price tag on football season tickets at $99, but Iowa outpaced the average at $175. In Iowa, as in most places, it’s likely a product of demand. Last season was the first season Iowa is believed to have sold out their entire football season prior to the start of the season.

Four schools in the Big Ten charged more for basketball season tickets than football: Illinois, Minnesota, Wisconsin and Michigan State. The average price for basketball season tickets in the conference as a whole was just $20 less than football season tickets.

I came across several other interesting options and practices when it comes to student tickets. Several universities have options for the spouse of a student to purchase a season ticket at a price higher than students but lower than the general public, but only if tickets remain after student tickets are fulfilled. Iowa lists a “student guest” ticket at the same price as a season ticket for the general public, but presumably it would allow the guest to sit in the student section. It also carries an “if available” caveat, and based on the earlier discussion on last year’s ticket sales, I would say it’s unlikely these are available.

Indiana University has “Young Alumni” football season tickets available for $30 (the same price as current students) if you’ve graduated in the last three years.

Two of the most interesting things I found, however, were via University of Michigan (although some other universities have similar practices). First was the ability to buy tickets to away games. The following chart was on Michigan’s website showing the price and number of tickets student season ticket holders could purchase for away games:

GAME Price per ticket LIMIT
Northwestern $50 2
Michigan State $75 1
Iowa $70 2
Illinois $65 None

Students at Michigan also have the ability to transfer a student ticket to a non-student. According to Michigan’s website, students can purchase a validation sticker (price not yet determined for 2011) which allows them to transfer their student ticket to a non-student.

Big Ten fans, have I missed any other unique or unusual  aspects of student tickets at your university? What are your thoughts on the numbers presented?

*Please note, I’m going to do a separate piece on schools with revenue-generating hockey programs in the coming weeks. I’ll discuss hockey ticket prices and revenue then.

Thanks to my research assistant Andy Haugan for helping with this piece!

How Much Did the BCS Top 25 Spend on Recruiting?

As I continue to write about the financial aspect of college athletics, I find myself wondering about things like how much money plays a role in winning. Is there one place where you can spend more money and increase your odds of competing for a championship? Or is the Athletic Director more of a conductor choosing which instruments to highlight and when in order to produce the best sounding symphony?

I thought it would be interesting to see how much spending on recruiting plays a role in football success. The numbers reflect recruiting expenses for the 2009-2010 school year.

One thing to note is that recruiting dollars are not broken down by sport, so the numbers you see below reflect the total amount spent on recruiting for all male athletes. Since football has the largest recruiting class and we can safely presume most schools spend the majority of their recruiting dollars on football, I think the numbers still paint an interesting picture.

Below you will see recruiting dollars spent during the 2009-2010 school year for each school in the 2010 BCS final standings, when presumably the athletes recruited with 2009-2010 dollars were then members of the team:

  School Recruiting Expenses % of Total Expenses
1 Auburn $1,129,984.00 1.24%
2 Oregon $844,235.00 1.29%
3 TCU $438,422.00 0.84%
4 Stanford $754,689.00 0.92%
5 Wisconsin $473,897.00 0.53%
6 Ohio State $676,966.00 0.65%
7 Oklahoma $1,010,570.00 1.14%
8 Arkansas $1,187,216.00 1.65%
9 Michigan State $677,958.00 1.10%
10 Boise State $158,355.00 0.63%
11 LSU $741,762.00 0.73%
12 Missouri $596,738.00 1.12%
13 Virginia Tech $625,207.00 1.24%
14 Oklahoma State $414,655.00 0.69%
15 Nevada $216,920.00 1.00%
16 Alabama $1,257,128.00 1.47%
17 Texas A&M $532,641.00 0.77%
18 Nebraksa $685,361.00 1.00%
19 Utah $466,532.00 1.46%
20 South Carolina $565,967.00 0.72%
21 Mississippi State $416,333.00 1.15%
22 West Virginia  $669,844.00 1.18%
23 Florida State $581,923.00 0.77%
24 Hawaii $272,078.00 0.93%
25 UCF $354,264.00 0.99%
       
  Averages $629,985.80 1.01%

Boise State is spending the paltry sum of $158,355, which is just 25% of the average. Only 26 of the 115 on the Broncos 2010 roster hailed from Idaho, with a huge percentage coming from as far away as California and Texas. Impressive that Boise State recruits so well on such a limited budget.

As an interesting side note, Boise State spends nearly as much on female recruiting as male, with female recruiting costs coming in at $123,287. That’s 44% of the total recruiting expenditures. Compare that to the leader for male recruiting expenses on this chart, Alabama, who only spends 26% of their recruiting expenditures on female recruiting. To complete the data needed for comparison, Alabama has 10 women’s teams and Boise State has 9 (with all track-related sports combined into one in each total).

The other thing that stood out to me was that Utah spent above average in terms of the percent of their total expenses advanced towards recruiting. In fact, they rank fourth overall in terms of percentage of total expenses spent on male recruiting. I was also surprised to see Ohio State and Michigan State from the Big Ten spending so much less than Alabama, Arkansas and Auburn from the SEC. The latter three make up the top three spenders overall on the list. Did this help them in their quest to move from a non-AQ conference to an AQ conference?

What surprised you from this list? If your school is on this list, how do you feel about what’s being spent on recruiting?

How Much Do Big Ten Programs Rely on Alumni Contributions?

After reading about which SEC alumni have the deepest pockets, many of you Big Ten fans wondered about your own conference. I like to give the people what they want, so here it is:

  School Contributions % of Total Revenue
1 Ohio State Univ. $27,327,347.00 22%
2 Univ. of Iowa $26,753,591.00 30%
3 Michigan State Univ. $21,292,589.00 25%
4 Penn State Univ. $20,993,951.00 20%
5 Univ. of Michigan $19,297,426.00 18%
6 Univ. of Wisconsin $19,247,563.00 20%
7 Univ. of Illinois $18,835,017.00 25%
8 Indiana Univ. $18,475,498.00 27%
9 Purdue Univ. $12,732,548.00 21%
10 Univ. of Minnesota $7,320,786.00 9%

Nothing good happens to my inbox when I compare the SEC and Big Ten, but I thought I might as well since I have the numbers. The average contribution in the Big Ten is $19,227,631, while the average in the SEC is $22,910,607. Remember, the SEC had one school who showed no contributions at all and that’s included in the average. Without Mississippi State’s goose egg, the SEC’s average would be $25,201,668.

Hold up Big Ten fans..before you start emailing me with all the reasons why the SEC number might be higher, let me explain another way to look at these numbers. Many schools do not allow contributions to come through their athletic department, but instead have money flow through their booster club or athletic foundation and take a distribution for only what is needed to cover the budget. When I wrote my piece on SEC finances awhile back, one AD told me they only pull enough from their athletic foundation to cover their operating deficit. As an added wrinkle, some schools have multiple booster clubs, each specific to an individual sport, and only pull what is needed for each sport. Thus, the numbers you see may only reflect what is needed by the athletic department, not the actual value of contributions made that year.

Looking at the numbers in that light, let me point out that contributions only account for 22% of a Big Ten athletic department’s revenue on average, while the SEC uses an average of 23 percent. Also, the SEC has a high of 34% while the Big Ten tops out at 30 percent. Does that mean SEC schools require a larger amount of contributions to fund their budget because of shortfalls in other sources of revenue? Or does it mean that some SEC schools are able to spend more because they choose to take larger distributions from their booster club or athletic foundation? It’s difficult to say.

The only number that really jumps out at me is University of Minnesota. I spoke with Garry Bowman in their athletic department and he confirmed that they only pull from their athletic foundation, where all contributions are managed, what they need each year.

University of Minnesota uses contributions for a much smaller portion of their overall athletic department revenue than any school I’ve looked at in the SEC or Big Ten (aside from Mississippi State, who relied on no contributions for 2009-2010). I looked back at Minnesota’s contribution numbers from the two years prior and found even lower numbers of $3.5 for 2008-2009 and $5.1 for 2007-2008. It’s hard to say how much this can be attributed to the new stadium they opened in 2009, which would have required massive concentrated fundraising efforts for the university to fund their 52% of costs (the State paid the remainder), but it’s a safe bet this played a role in the amount of contributions the athletic department accessed in recent years. Mr. Bowman also pointed out that they didn’t begin their preferred seating plan until the 2009 season, which is a significant source of donor money for many schools.

TCF Bank Stadium at Univ. of Minnesota

Now that you’ve taken a look at the SEC and Big Ten, I have several questions for fans of teams in both conferences. First, if your school’s athletic department is only pulling what they need to cover losses from the booster club, do you think they should be pulling more? If so, for what use? Second, what percentage of total contributions that come in per year do you think the athletic department should be spending and what percentage should be saved for projects down the road?

*Note that Northwestern’s number is unavailable because as a private institution they are not subject to an open records request.

Big Ten Ticket Revenue

The Big Ten is the most interesting conference to look at when it comes to ticket revenue. Why, you might ask? Because it is the only conference that still engages in revenue sharing when it comes to gate receipts.

Yes, you heard that right. Michigan, Penn State and Ohio State do not get the full benefit of having some of the largest football stadiums in college football. You know how members of the U.S. Marine Corps say their priorities or code are, “Unit, Corps, God, Country”? When it comes to college athletics, it’s “Conference, Football, School, Athlete”.

According to the Big Ten, revenue sharing for gate receipts has been a staple of the conference since the 1950s. Back then, teams shared 50% of their gate receipts with no minimum or maximum per game.

Today, the Big Ten shares gate receipts from both football and men’s basketball. For football, schools contribute 35% of the gate receipts for all home games against conference opponents. The minimum contribution per game is $300,000 and the maximum is $1 million, making the maximum for the season $4 million. The pool is divided equally between all schools.

One important thing to note is that the gate receipt total from which the 35% is taken does not include premiums paid for suites, club seats or the like. For example, if a school requires a minimum donation in order to qualify for season tickets or a suite, that donation amount is not included, only the face value on the tickets. Similarly, if the cost of a suite is $10,000, but the face value on the ticket is only $4,000, it is the latter amount that is used for revenue sharing purposes.

Here’s what each team in the Big Ten contributed for the 2009 football season: Read the rest of this entry

How Big is the Big Ten Financially?

I recently wrote about finances in the SEC, specifically with respect to football and overall athletic department profits. Thanks to so many of you who sent me tweets and emails about it, I’ve decided to make this into a series. Next up is the Big Ten. (If you missed the first piece and want to understand the origin of these numbers and how they were calculated, check the note at the end of this piece.)

There’s an argument to be made that the SEC is the strongest conference in college football. I’m not just saying that because I’m an SEC fan, I’m saying it because they’ve won the past five national championships. Perhaps then it is no surprise that the SEC surpasses the Big Ten in each and every category when it comes to football finance: it generates more, it spends more and it posts bigger profits.

Here’s a quick breakdown of the averages for each category (the totals would be misleading because the SEC has twelve teams and the Big Ten only eleven):

  Football Revenue Football Expenses Football Profit
SEC $49,900,780.92 $19,954,052.50 $29,946,728.42
Big Ten $40,578,173.45 $17,886,754.73 $22,691,418.73

While the SEC has the Big Ten beat in terms of football, the Big Ten teams bring in larger athletic department profits in the aggregate than SEC teams.  The total profit for athletic departments in the Big Ten is $117,750,068, while the SEC, who has one more team than the Big Ten, only posts aggregate profits of $97,887,580.00.  The Big Ten edges out the SEC in terms of average profit by school as well with $10,704,551.44 versus $8,157,298.33 in the SEC. Read the rest of this entry