Category Archives: Budgets
Yesterday, the NCAA levied what many consider to be unprecedented penalties upon Penn State. Including within the NCAA’s sanctions, was the imposing of a $60 million fine to be paid by Penn State over the next five years. This $60 million figure is clearly large, leading some to believe that while the NCAA did not impose the “death penalty” upon the football program, it nonetheless intended to decimate it.
How though, will the $60 million fine actually impact the operations of Penn State’s football program and the Penn State athletics department? In the grand scheme of Division I athletics, Penn State has posted impressive revenues in recent years. For 2010-11, the most recent year for which Department of Education data is available, Penn State’s athletics department reported total revenues of $116,118,026.00. The athletics department also reported expenses of $84,498,339.00. While many athletics directors will note that the numbers reported to the Department of Education are not inclusive of every cost incurred by an athletics department, these figures at least give some idea as to the type of budget Penn State’s athletics department is operating under.
That being said, it is arguable that at least when considering the Department of Education data, having to shell out on average $12 million per year over the next five years to comply with the NCAA’s sanctions is not going to destroy Penn State athletics. However, the story is not that simple. One has to take into consideration the multitude of budgetary factors Penn State’s athletics department is likely now facing as a result of the NCAA sanctions. Along with losing sponsors like State Farm and facing a possible credit downgrade by Moody’s, Penn State athletics likely now has to rework its budget to determine where the $60 million is going to come from.
Frank Hardymon is the Associate Athletic Director – CFO at Georgia Tech. While he can only explain the budget planning process engaged in at Georgia Tech, he notes, “I would guess our methods of planning and budgeting are similar to those utilized by other institutions.” This planning begins the spring prior to the July 1 start of the fiscal year, when the upcoming year’s budget is completed. “In our case, nearly every dollar which we project receiving is accounted for in the budget,” Hardymon noted.
Likely, a similar circumstance exists at Penn State. While the Department of Education arguably demonstrates that the athletics department is operating with a surplus, many athletics directors are quick to note that is not the case, as not every expense an athletics department incurs is reported to the Department of Education. As such, Penn State is likely looking towards contingency provisions in its budget to gather the money by which to pay the $60 million fine. “We build in as much contingency as we can every year; some years we may have close to $5,000,000.00 in contingency factors into the budget, other years that amount is quite a bit less,” Hardymon said.
It is unknown whether Penn State’s athletics department had any contingencies built into its budget. If so, it is highly unlikely that the contingency amount would allow for the payment of a $60 million fine. As such, Penn State will likely have to scrape from other areas of its budget to pay the imposed fine. Areas in which Penn State could cut from its budget would likely be from recruiting expenses, travel costs and future coaching salaries. However, the most likely area in which Penn State could draw from is facility improvements. While the department will have to continue paying under the loan terms for already existing improvements, it is unlikely that the athletics department will undertake any new building during the time period in which the fine is being paid. Hardymon noted, “We also maintain a detailed five-year income projection which we update frequently. That analysis factors in projected facility improvements needed during those five years.”
Overall, the financial sanction imposed upon Penn State by the NCAA is indeed a blow to the athletics department. However, given Penn State’s apparent athletics revenue along with proper budgeting moving forward during the next five years, it is likely that the athletics department will be able to continue to function financially.
Yesterday, BusinessofCollegeSports.com gave you an exclusive, in-depth look into Wisconsin’s athletic department revenues. Previously, BusinessofCollegeSports.com reported that per data obtained from the Department of Education, Wisconsin had the 9th highest expenses of all Division I schools. Randy Marnocha, Wisconsin’s Associate AD for Business Operations graciously provided BusinessofCollegeSports.com with in-depth information about Wisconsin’s expenses for 2010-11.
In 2010-11, Wisconsin had operating expenses of $80,855,012.00 and capital expenses of $3,010,174.00.
The chart below depicts the items making up Wisconsin’s $80,855,012.00 worth of operating expenses.
|Salaries & Fringes||$32,919,613.00|
The following account for the $28,519,000.00 Wisconsin spent on “operating expenses” last year: Business travel, team travel, recruiting travel, interview/relocation costs, advertising, concessions/catering resales, team meals/catering/housing, guarantees, equipment maitenance and repairs, building/grounds maintenance and repairs, membership dues (Big Ten Conference, etc.), officials, postage/freight, printing, prizes and awards, equipment rentals, space rentals, medical services, police services, professional services, subscriptions, athletic equipment, building and grounds supplies, medical supplies, office supplies, telephone service, and insurance/property tax.
With respect to debt services, the figure shown above includes the total paid off by Wisconsin on various capital projects. In particular, in 2010-11, Wisconsin paid off $6,723,150.00 on its football stadium, Camp Randall, and $2,571,736 on its basketball and hockey facility, the Kohl Center.
The financial aid amount reflected is composed of the following: Scholarships, tuition remissions, NCAA Opportunity Fund, NCAA Special Assistance and a continuing education fund. The largest expenditure in the financial aid section went toward scholarships, for which Wisconsin spent $9,595,562.00 in 2010-11. Notably, this amount was lower than that which Wisconsin expended on scholarships in 2009-10. In 2009-10, Wisconsin spent $9,389,828.00 on scholarships.
The following chart depicts Wisconsin’s 2010-11 post season revenues and expenses. The revenues and expenses are calculated for all of Wisconsin’s teams which participated in their respective 2010-11 post seasons. Those teams included: Football, men’s and women’s basketball, men’s and women’s hockey, men’s and women’s soccer, softball, men’s and women’s swimming, men’s and women’s tennis, volleyball and wrestling.
|Post Season Revenue||$2,579,248.00|
|Post Season Expenses||$3,738,568.00|
Notably, Wisconsin suffered a loss overall when it came to post season participation in 2010-11. It should be noted, however, that in 2010-11, Wisconsin received a bowl payout of$2,493,258.00 from the Big Ten Conference.
BusinessofCollegeSports.com would like to extend a gracious “thank you” to Randy Marnocha for his assistance with this series and his generosity with his time.
Recently, BusinessofCollegeSports.com wrote that per data obtained via the Department of Education, Wisconsin’s athletic department had revenues of $93,594,766.00 and expenses of $92,939,345.00 in 2010-11. Comparing these numbers to those that other athletic departments submitted to the Department of Education demonstrated that in 2010-11, Wisconsin had the 9th highest expenses and the 12th highest revenues of all Division I athletic departments.
Given the idiosyncracies of the Department of Education data for athletic departments, BusinessofCollegeSports.com followed up with Wisconsin’s athletic department to delve deeper into their budget. Randy Marnocha, Wisconsin’s Associate AD for Business Operations graciously opened up the athletic department budget to BusinessofCollegeSports.com. What follows is an exclusive, in-depth look into Wisconsin’s revenues and expenses.
Today, Wisconsin’s revenues will be examined. Tomorrow, BusinessofCollegeSports.com will post Wisconsin’s athletic department expenses for 2010-11.
The chart below depicts the revenues that Wisconsin reported to both the NCAA and the Department of Education. As BusinessofCollegeSports.com has previously explained, there are differences in these two reports which account for the different revenues that a school reports to each. For instance, Wisconsin does not report utilities to the Department of Education, while that number is reported to the NCAA.
|Revenue||Revenue Reported to the NCAA||Revenue Reported to the DOE|
|Big Ten Media (Campus)||$2,772,546.00||$2,772,546.00|
|Coaches Camps & Clinics||$1,707,848.00||$1,707,848.00|
|UWF Gifts in Kind||$332,597.00||$332,597.00|
|UWF Special Account||$1,119,638.00||$1,119,638.00|
|UWF Other Expenses||$286,925.00||$286,925.00|
As depicted above, the largest source of Wisconsin’s athletic department revenue came from operating revenue. The following items make-up Wisconsin’s operating revenue: Ticket sales, revenue received from the Big Ten Conference, gifts in kind, concessions and catering, media revenue, events, post season revenue and “other” (which will be described below). Below is a snapshot of how much each of these revenue streams contributed to Wisconsin’s overall operating revenue.
|Revenue Stream||Amount Generated|
The chart below depicts the amount that Wisconsin teams were able to generate through ticket revenue. Unsurprisingly, football leads the way. Perhaps, the most interesting thing to note in this chart, is the great disparity between men’s sports and women’s sports ticket sales.
In 2010-11, Wisconsin received $19,664,188.00 in revenue from the Big Ten Conference. The chart below depicts the amount of revenue Wisconsin received from the Big Ten Conference.
|Big Ten Media||$13,903,475.00|
|NCAA Broad Based||$3,286,099.00|
|Big Ten MBK Tournament||$385,574.00|
The “NCAA Broad Based” payout noted above includes payments made by the conference for the NCAA basketball fund distribution (teams earn one unit for each NCAA March Madness game they play in, except for the National Championship; conferences distribute the money derived from these units), sports sponsorship and grants in aid, and any supplemental distributions, if approved. Additionally, negative numbers are shown for football tickets and basketball tickets. This is because Big Ten Conference members pay into a ticket pool. If a school makes over a certain amount in ticket revenue, they pay into the pool. Schools falling below the ticket revenue amount receive a payout from the Big Ten Conference.
Next, is a chart depicting the revenue generated by Wisconsin’s advertising ventures.
Wisconsin has an advertising contract with Learfield/BSP. According to Marnocha, “They do most of the signage around the facilities, radio spots, television spots, etc. They sell the rights to advertise in our media guides and programs. They sell the advertising for the big, LED signage that we have in the stadium.” With respect to the adidas and Coca-Cola amounts, Marnocha notes, “These amounts are part of adidas and Coca-Cola’s contracts with us and they give us a certain amount of money to advertise their products.” CR Chairbacks refers to Camp Randall Chairbacks, sold for the football stadium.
With respect to the post season, the chart below highlights Wisconsin’s overall post season revenues. This amount is for all Wisconsin teams that participated in the post season in 2010-11. Those teams included: Football, men’s and women’s basketball, men’s and women’s hockey, men’s and women’s soccer, softball, men’s and women’s swimming, men’s and women’s tennis, volleyball and wrestling.
|Post Season Revenue||$2,579,248.00|
As for catering and concessions, the following chart breaks down how much revenue was generated through catering, events and at specific team’s games:
|Concessions and Catering||Amount|
The next chart depicts the revenue that Wisconsin receives from the Big Ten’s media contracts. One thing to note, is that a significant portion of the amount of money Wisconsin receives from the Big Ten Network is returned to the Wisconsin campus and not used by the athletic department. Additionally, according to Marnocha, each Big Ten Conference school receives the same Big Ten Network payout each year.
|Big Ten Media Revenue||Amount|
|Big Ten Network||$7,894,078.00|
|Athletic Department Portion from BTN||$5,193,765.00|
|Campus Portion from BTN||$2,772,546.00|
The portion of “other” revenue depicted in Wisconsin’s operating revenues is composed of the following:
Visit BusinessofColllegeSports.com tomorrow to get an inside look into Wisconsin’s athletic department expenses.
Guest author: Dr. Michael Lorenzen
Dr. Michael Lorenzen is the principal owner of Collegiate Athletics Strategy Advising, a firm that provides advisement services to collegiate athletics administrators. He’s also a frequent guest contributor to BusinessofCollegeSports.com.
A rather important benchmark for intercollegiate athletics was established recently, albeit a bit under the radar in lovely San Diego, CA. The undergraduate student body at the University of California, San Diego (UCSD) was given the opportunity to vote on something called the Division I Student Scholarships Referendum, which would have increased student fees by $165 per quarter in order to fund a transition for the athletic program (ICA) from Division II to Division I (http://as.ucsd.edu/ica/). The status quo ICA operating fee was already $119.78 per quarter and the referendum would have raised it to $284.78. Almost a third of the increase was slated to be set aside for financial need programs, but the remaining $117.15 was all for support of athletics. Without any other visible means to support the transition, the undergrads were being asked if they would put up the millions of dollars necessary to step up and swim in the bigger pool of the NCAA.
The referendum came at a time when the state of California is in a deep financial hole and continuing to slash support for higher education. Every school in the Cal State and University of California system has felt the impact and been forced to confront difficult new operating realities. From 2010 to 2012, UCSD lost $70.5 million in state funding, which resulted in some pretty serious hardship for the school, including painful budget cuts to things like library funding and postponement of faculty recruitment. Student fees in other areas have been raised on an annual basis and the amount of debt incurred by undergrads has jumped more than $3,000 over the last decade after inflation (http://as.ucsd.edu/docs/ICA_Election_Results_2012.pdf).
Asking the undergraduates to pay for expensive athletics has been a trend in the last decade in California and it has largely been viewed favorably by the students who vote. One could argue that the undergrad who approves such a tax are often deciding to pass on a fee that will affect future students much more than themselves, but there has been a consistent majority urge from students to invest in having better athletics on their campuses. Without their willingness to go further into debt, mid-tier NCAA institutions find themselves in an ever-greater bind as the cost of competing rises, just as state support for universities is declining. And, perhaps more importantly, just as the wealth often associated with collegiate athletics is increasingly concentrated in the small number of schools that generate profits from athletic operations.
According to the NCAA (http://www.ncaapublications.com/productdownloads/2010RevExp.pdf), “a total of 22 athletics programs in the FBS [Football Bowl Subdivision] reported positive net revenues for the 2010 fiscal year, which represents an increase from the 14 reported in 2009”. This refers to the 120 big-time, major conference programs that have the greatest opportunity to reap the rewards of corporate sponsorships and media contracts. The largest such school generated $143.6 million, which was a staggering $108 million more than the median generated revenue for schools of that level at $35 million. Granted, that number one contender also spent $130 million that year, but the median spending of those who were trying to keep up with the Joneses was $46.7 million. The net of all that math is that the “median negative net generated revenue”–a nice euphemism for bleeding cash–for the 98 FBS schools that lost money was just under $10 million. The authors of the report noted excitedly that in the previous year schools lost on average a little more than $10 million each, so that must be good news. Unless you’re the AD who is trying to figure out where to come up with that $10 million.
The story is similar at the next level down in the NCAA, the Football Championship Subdivision (FCS). For those schools the “median negative net generated revenue” was $9.2 million and was consistently rising across the country. The scarier number is that the median generated revenue was only $3.3 million and there is little potential for those schools to find big paydays on the scale of their Pac 12, Big 10, or SEC brethren. The annual losses are nearly as big as the FBS schools but there is even less opportunity for filling that gap without turning to the one pot that every administrator seems to think is infinitely refillable–student fees.
UC Davis (UCD) began planning for a transition from Division II to Division I for the same set of basic reasons that UCSD looked at the issue–surely such a large school better fits the profile of the big Division I institutions than little Division II schools with 25% as many students on average. In the first stage of the Davis process students passed the Facilities and Campus Enhancement Initiative (FACE) in February 1999 that resulted in an $18 per quarter increase in student fees (http://daviswiki.org/move_to_division_i). Next up was the 2002 Campus Expansion Initiative (CEI) that elevated student fees by $120 per quarter for undergrads and $22 for grads. The bill was passed by 54% (http://daviswiki.org/Campus_Expansion_Initiative) with the funds from that bill dedicated to a variety of campus projects, but almost half of it in order to provide for $4 million per year in grants-in-aid for athletics. In spite of those increases, by 2010 UCD announced it was eliminating four sports to save money and that another student fee increase had not been enough to fund the scale of a Division I program that the student body now found themselves effectively owning (at one point student fees accounted for 75% of the athletic department’s budget).
The same financial pinch motivated similar “asks” by administrations of other universities in California. In May 1999, UC Irvine students approved a $33 hike per quarter to help fund athletic scholarships. In April 1998, UC Santa Barbara students approved a $9 per quarter increase and in June 1998 UC Riverside students voted to pay an additional $35 per quarter.
On the surface, and given the trend with state schools in California, to many folks I’m sure the decision in San Diego appeared to be a no-brainer. Like UC Davis, UCSD is by far larger than the average Division II university, has several teams that already compete at the Division I level (volleyball and water polo), and does fit the profile of the other large institutions in the UC system in California in many ways.
Nonetheless, what UCSD does not have (nor was it proposing to add) is the economic engine that pulls the athletic train in the form of a Division I football team. It also does not have a local culture of rabidly supportive and passionate UCSD community-based fans. But perhaps most importantly, the undergraduate student body appears to believe that they’re paying quite enough for their education and have no desire to pay an additional $1,980 over the course of their four years for the privilege of having higher profile and larger scale competitive sports teams. In the final tally of voting on the Referendum, 11,407 students turned out and they voted a fairly resounding no, with 57% saying they did not want the referendum to pass (http://as.ucsd.edu/docs/ICA_Election_Results_2012.pdf).
It is difficult for many faculty and students to stomach the idea of increasing fees to pay for athletics at a time when the fit of intercollegiate athletics on campus is ever more tenuous. Are student-athletes still students and is the function of athletics still well-integrated with the academic mission of higher ed institutions? You can find plenty of critics who will say no.
But on the other side of the equation, there is the undeniable buzz and passion associated with March Madness. Students at Norfolk State University (NSU) pay $1,379 per year in athletic student fees, which fund 83% of the school’s $10 million athletic budget. Do the NSU Spartan faithful feel like they got a good return on their investment when their men’s basketball team, a #15 seed, made history and knocked off mighty Mizzou, a #2 seed, in the first round of the NCAA Tournament? How about when Florida crushed the Spartans in the game 48 hours later by 34 points to end the Norfolk State season?
Whatever they feel after such extraordinary wins and painful losses, the non-athlete student on campus is going to be asked to bear more of the burden of maintaining collegiate athletics. Their willingness to do so will have a significant impact on the future of the intercollegiate athletic enterprise.
In recent years, there has been much focus upon the amount of money athletic departments whose football teams participate in bowl games must shell out for items like unsold tickets and travel for a large group of people to the respective bowl game. Investigations have been completed at various levels to determine just how much profit an athletic department can turn if it is required to pay a big-ticket price just to participate in a bowl game.
Last year, the bowl game which arguably drew the most scrutiny as a result of the amount of money an athletic department was required to spend for its team to participate in the game, was the Tostitos Fiesta Bowl. In 2011, UConn took on Oklahoma in the Fiesta Bowl. Given that Storrs, Connecticut is located thousands of miles away from Tempe, Arizona, UConn incurred extensive travel expenses. Additionally, UConn was required to sell 17,500 tickets for the event. Six days before the bowl game, it had only sold 4,600. Reports indicated that the school would incur the cost of the unsold tickets.
This year, Oklahoma State University is taking on Stanford in the Tostitos Fiesta Bowl. BusinessofCollegeSports.com reached out to both schools to learn more about the bowl’s financial requirements of each athletic program. Because Stanford is a private university, it declined to participate, citing open records request laws.
However, Oklahoma State provided information which gives great insight into the financial responsibilities of athletic departments participating in the Tostitos Fiesta Bowl.
Oklahoma State was required to purchase and/or sell 17,500 tickets for the game. The price of these tickets ranged from $105.00 to $255.00. Thus, the amount of tickets Oklahoma State was required to sell for the Fiesta Bowl ranged in amount from $1,837,500.00 to $4,462,500.00.
Given the high price of tickets and the associated allotment of tickets Oklahoma State was required to purchase and/or sell, there is arguably need for concern over whether the school would be required to purchase those tickets it was unable to sell. According to Jason Lewis, Oklahoma State’s Associate Athletic Director for Business and Finance, Oklahoma State’s athletic department will not incur the cost of unsold tickets. Although Lewis did not provide information in this regard, it is likely that the Big 12 conference will incur the cost of the unsold tickets which Oklahoma State was responsible for.
Lewis indicate that Oklahoma State did not have a budget set aside for bowl travel. At the time of the interview, it was too early to estimate how much money Oklahoma State planned to spend on travel to the Fiesta Bowl, as well as how many individual’s travel the athletic department would pay for to the Fiesta Bowl.
However, Lewis did note that the Big 12 Conference provided Oklahoma State with a travel allotment for the Fiesta Bowl. The Big 12 Conference gave Oklahoma State $1.8 million for travel purposes to the Fiesta Bowl.
The information provided by Lewis shines a new light on bowl finances. Last year, after hearing that UConn was required to purchase 17,500 tickets and was only able to sell around 5,000 of those tickets, many were quick to cry foul. However, after learning that the Big 12 conference has provided Oklahoma State with a significant amount of money for travel expenses and that the Big 12 Conference will likely incur the cost of unsold tickets, the burden of participating in bowl games on athletic departments appears to be less harsh than commonly reported.
BusinessofCollegeSports.com would like to thank Jason Lewis for his help with this piece.
It’s a “Which came first, the chicken or the egg?” type question – which propels a school to success: booster support or a top revenue generating conference? Obviously both are important, but which do top-ranked football programs rely upon more?
I recently ran across this article by Michael Lewis of the Salt Lake Tribune where he discusses how crucial it is for Utah to start bringing in contributions that rival those received by other Pac-12 institutions. Utah had its best fundraising year ever last year, raising $5.2 million. However, it’ll need to raise over twice that just to be at the league average of $11 million in the Pac-12. To match the leader in contributions in the Pac-12, USC, Utah will need to raise around $27 million.
I took a look at the financial statements I have for schools and found a familiar trend amongst those who’ve had football success in recent years. The majority receive more in contributions than in conference distributions. So which is more important? Contributions or conference distributions? Does being in a top conference bring you more contributions? Do higher levels of contributions increase your chance of getting into an AQ conference if you’re in a non-AQ conference?
Let’s take a look at last year’s BCS Top 25 and see which schools relied upon more, contributions or conference distributions:
A couple of things to note. First, TCU and Stanford’s numbers are unavailable because they are private institutions. Second, Mississippi State shows no contributions because they chose not to take a distribution from their booster club in fiscal year 2010. Not all schools separate out NCAA and conference distributions, so they are tabulated here together.
As you can see, most of the schools on this list take in significantly more in contributions than in NCAA and conference distributions, regardless of conference affiliation.
Are boosters more important than television contracts or BCS and March Madness appearances? How does a school increase the contribution levels of its alumni to stay competitive?
As you’ll remember if you read this site regularly (and if you don’t, why aren’t you?), Michigan is on of the 22 self-sustaining athletic departments. In fact, they’re projecting an operating surplus (that’s operating revenue minus operating expenses, which means it does not include capital expenditures) of $11.4 million for the upcoming fiscal year.
However, because of renovations to Crisler Arena (basketball) and Yost Arena (hockey), they will have a net loss of $18.5 million for the year. That’s, of course, not a loss that reflects the athletic department operating in the black. It’s just a depletion in their overall fund balance.
Michigan has taken on quite a few capital projects in the past decade. Here’s a look at the budget for each project and the gifts from donors for each project:
As you can see, gifts help make these capital projects possible, but they only make a small dent in the total amount needed. The athletic department has incurred debt for a number of the projects and has budgeted $13.2 million in expenses for this debt service for the coming year. This is up $2.2 million from last year due to debt incurred for the Michigan Stadium and Crisler Arena projects.
In addition to this debt service, Michigan has another $14.4 million budgeted for “Facilities Expenses” and a “Deferred Maintenance Fund Transfer”. I should point out that $4.5 million of the $14.4 million mentioned is for the “Deferred Maintenance Fund Transfer”. This is a fund set up during the 2003 fiscal year that is being built up to fund future “major repair and rehabilitation projects” for athletic facilities. Because Michigan turns an operating profit each year, they’re able to put aside for future capital projects in ways I’m sure many other universities cannot.
The $14.4 million I just detailed on top of the $29.9 million set aside for renovations to Crisler and Yost and $13.2 million in debt service on facilities adds up to $57.5 million Michigan is spending next year on facilities alone.
Over time, however, the money may be well-spent. First, there’s a lot of keeping up with the Joneses that happens amongst athletic departments. You don’t want to lose a recruit because another school had nicer locker rooms or a better lounge for student-athletes. Better athletes hopefully translates into better success on the field. The national attention that comes with success can mean more applications for the university. It can also mean greater brand recognition, which translates into additional revenue from licensing and advertising.
For a school like Michigan who sells out football games, adding additional seating areas generally pays for itself over time. In the first season of having new club level and suite seating areas in Michigan Stadium last year, Michigan saw a $5 million increase in revenue attributed directly to those seating areas.
What do you think? Are expenditures on facilities getting out of hand? What can be done about it? If you simply stop renovating or upgrading, will the university fall in stature both on and off the field? Are naming rights the wave of the future in terms of funding renovations and upgrades?
Those who have read my work or followed me on Twitter for any appreciable amount of time know that I’m a huge fan of the University of Louisville’s athletic department and Athletic Director Tom Jurich. You should know this comes from a sincere place, because I’m not a Louisville grad. In fact, they nabbed one of my alma mater’s most talented assistant coaches, Charlie Strong.
When Tom Jurich took over the Louisville post more than a decade ago, he inherited a program in danger of being out of Title IX compliance. Today he reigns over an athletic department that has built (or is building) a brand new facility for every single men’s and women’s sport, with the exception of football (which received an expansion). His basketball program is the 21st most profitable program in the country behind 20 college football programs. In fact, his basketball program ranks ahead of every football program in the Big East, ACC and Pac-10.
Each time I contact Tom Jurich’s office I learn something new about him and his athletic department that strengthens my admiration of the work he has done. Today, I’m looking at Louisville’s 2010-2011 athletic department budget.
The first thing that strikes me about this budget isn’t numbers, it’s a list of Athletic Department Goals. I’ve reviewed around a dozen budgets this spring and not one has included a section like this. It’s the very first page of Louisville’s budget after the cover page.
My boyfriend trains high school athletes, and in his spare time he trains me. When I complain about an exercise he asks me, “Why do we do this?” The correct answer from me is, “Because I have goals.” University of Louisville’s athletic department has goals. Before you get to the details of Louisville’s budget, you’re reminded of its goals. Eyes on the prize.
Here are the goals that preceded Louisville’s 2010-2011 budget:
1. To strive to maintain the highest level of ethics in the University’s athletic program to ensure the integrity of the program is not compromised.
2. To continue to support our Compliance Office and maintain our exemplary record in this area.
3. To continue to support our Academic Counseling office as we work toward constant improvement, excellence in the classroom.
4. To provide quality intercollegiate athletic programs for student-athletes, students, alumni, faculty-staff and the public.
5. To continue to support a comprehensive gender equity plan to assure the University’s ongoing compliance with Title IX. to meet annually with our Title IX consultant to assure compliance.
6. To continue marketing the Hickman Camp Fund as the Athletic Association’s source of endowment for funding future athletic scholarships.
7. To continue a funding model that allows all programs the opportunity to be successful in the Big East and NCAA.
8. To implement/monitor the agreement with the Louisville Arena Authority that allows University of Louisville to provide a new facility for its Men’s and Women’s basketball programs with priority dates and new revenue opportunities.
9. To finalize the marketing of the Arena and Stadium Expansion in preparing for openings in 2010.
10. To continue fundraising efforts for construction on: (a) the expansion of Papa Johns Cardinal Stadium and (b) a boathouse for the Rowing team on the riverfront.
11. To maintain a financial plan with balanced annual budgets, expenditures sufficient to support athletic programs at the national level, and to continue to pursue new sources of revenue.
12. To continue to grow the Merchandising and Licensing Program to become much more visible, both nationally and internationally.
13. To continue to work with the University’s Administration to assure the Athletic Department is an integral and vital part of the University. Staff will continue to participate on University-wide committees and participate in joint efforts when requested.
Maybe these all seem like common sense goals for an athletic department to have. Differences in business units (which is what athletic departments are) can be seemingly miniscule. So what if Tom Jurich inserts his goals for the athletic department in the budget? It’s not like every school doesn’t have similar goals, right?
I believe tiny nuances in leadership can make huge differences in any business unit . Tom Jurich is telling his department repeatedly what the goals are. Repetition breeds success. He’s put them before the numbers. To me, that says long-term goals are more important than the balance sheet of any one given year.
Before Coach X reviews the budget and sees that he’s not getting as much of an increase in expenditures as he requested for his sport, he’s seeing the department’s goals reiterated. Placing these goals the first page of the budget says, “Remember, these are our goals. Not making $X from football or $Y from basketball, but doing these things to improve our athletic department as a whole.”
And Louisville’s athletic department has improved since Tom Jurich’s arrival. Louisville only missed the self-sustaining athletic departments list for the 2009-2010 school year by approximately $1.8 million. I wouldn’t be surprised to see them make the list in coming years with increased revenue from the football stadium expansion and new basketball arena. The athletic department confirmed for me today that revenue from the new basketball arena exceeded projections for ticket sales, suite rentals and concessions, although final numbers are not yet available.
The first interesting thing I noticed on UGA’s budget is that they break down ticket revenue for football by game. Here’s what they are projecting for each home and neutral site game this season:
|New Mexico State||$2,825,000|
You’ll note the hit UGA takes for each of the two neutral site games against Boise State and Florida: about $1 million each. In total, however, the football program is projected to make $20,045,000 from ticket sales. Comparatively, the four other sports that sell tickets (men’s and women’s basketball, baseball and gymnastics) are only projected to make $1,400,000.
It’s tough to do a direct comparison between Ohio State and UGA on a line item basis because their budgets are set up a little differently. However, it does appear that Ohio State is making a great deal more than UGA when it comes to football. Ohio State is projected to make $36,399,540 from ticket sales for the 2011 season. When you add in UGA’s sky suite revenue to the $20,045,000 ticket revenue discussed above the grand total is $25,568,400. UGA does have only 6 home games (with two neutral site games) while Ohio State has 7, and there’s a large capacity difference with Ohio State at 102,329 and UGA at 92,746.
In terms of total football revenue, it’s tough to compare the two schools line by line. For example, Ohio State shows $1,715,000 in concessions for just football, whereas UGA only shows concessions revenue for the athletic department as a whole at $1,250,000. Clearly Ohio State is making more regardless, but it’s one example of how a side-by-side comparison isn’t going to be perfect.
One thing I can compare for you is television money. Ohio State projects television revenue of $11,415,300 for football. UGA projects just $9,450,000, the difference no doubt due to the Big Ten Network. However, UGA’s projection for 2010-2011 was a bit low, so it’s likely they’ll see a little more money than projected for 2011-2012. UGA budgeted for $8.96 million in 2010-2011 and last week found out its share would instead be $9.42 million, making its $9.45 million projection for 2011-2012 likely low.
One area where UGA fans will probably be excited by the comparison, however, is recruiting budget. Ohio State shows a recruiting budget of $438,500 for football while UGA’s is at $600,000. That’s despite UGA trailing Ohio State by about $12 million in football revenue by my estimation. I was a bit surprised by this difference, as I assumed Ohio State traveled out of state for recruiting more than Georgia who has such a strong recruiting base in-state. You know what they say about assumptions. I tallied up the in-state student on both rosters and found this: UGA (65), Ohio State (64).
Another interesting comparison is revenue from the conference playoff game. UGA is projected to make $1.3 million from the SEC’s game, while Ohio State is projecting just $904,000 for the Big Ten’s inaugural game. I also think it’s possible UGA will make more than projected, as I received this budget before the SEC announced distributions for the 2010-2011 school year. The Orlando Sentinel reported that $15.3 million was split by the SEC’s 12 schools for the 2010 SEC Championship Game, which would have amounted to $1.275 million per school. The budget I have shows UGA only projecting $1 million for 2010 with an increase to $1.3 million for 2011. I’d put my money on the final figure in 2011 being higher than UGA’s budgeted amount. Obviously, Ohio State could also see more money than budgeted as the Big Ten Championship Game will be the conference’s first and is probably projected conservatively.
If you’re interested in UGA’s complete expense budget for football, here it is:
|Local Bus Service||$18,500||$20,000|
|Recruiting & Coaches Travel||$600,000||$600,000|
|Filming & Video||$91,400||$122,320|
|Pre/Post Season Training||$200,000||$210,000|
Today is the final day of The Ohio State Week on BusinessofCollegeSports.com. So far we’ve taken a look at the football program’s line item budget, the full athletic department budget and how recruiting dollars are allocated across all sports at Ohio State.
I want to close out The Ohio State Week by sharing a number of interesting tidbits from the nearly 100 pages of athletic department budget:
- Every single sport at Ohio State is receiving an overall increase in their expense budget for 2011-2012. The percentage of increase ranges from 0.9% (Women’s Cross Country) to 9.4% (Women’s Soccer). This is despite a predicted 1.5% expected reduction in revenue. As discussed previously this week, I portion of this is due to there being one fewer home football game this season, which is projected to cost Ohio State about $3 million.
- It takes over $22 million in funds from the Buckeye Club, other fundraising, interest income from their endowment, royalty income and transfers from reserves to balance the budget.
- Total coaching and staff salaries, wages and benefits are over $44 million. The projected $35 million profit from football (which accounts for 73% of all revenue generated directly from sports) isn’t even enough to cover that one category of expenses in the athletic department.
- Over $25 million is paid back to the University for items like grants-in-aid and payments to the Office of Financial Aid and Office of Academic Affairs. The athletic department also provides $100,000 to the School of Music (in addition to funding the operating budget for the band). An even larger donation goes toward library renovation with $1 million every year for nine years.
- The athletic department funds a Student-Athlete Support Services Office at approximately $2.4 million per year. I was happy to see this one after reading numerous articles over the past several months about student-athletes being admitted to schools they weren’t academically prepared for and becoming a drain on academic resources. None of those articles mentioned that athletic departments often fund these types of centers for their student-athletes. I’ve got a budget for a top SEC program to show you next week and they fund a similar service.
- Over $5 million is sent back to the University for the athletic department’s share of overhead, which covers everything from insurance to payroll services to purchasing and accounting.
- Football and men’s basketball are projected to increase television revenue in 2011-2012 by over $1 million.
- Out of 36 varsity teams only 18 produce any revenue: football, men’s basketball, baseball, men’s gymnastics, men’s ice hockey, men’s lacrosse, men’s soccer, men’s track, men’s volleyball, wrestling, women’s basketball, softball, women’s gymnastics, women’s track, women’s volleyball, women’s soccer, women’s lacrosse, and women’s ice hockey. Football and men’s basketball account for 98.3% of all the revenue generated by teams.
- Football and men’s basketball are the only sports who turn a net profit.