Others just have a general curiosity about revenue in college athletics: Where does all the money go? However, s. The second problem feeds the first: athletic departments aren't supposed to report revenue that is generated outside of the sports it sponsors. Contributions are also an important factor in college football revenue, because they’re generally required in order to purchase season tickets, and the amount of a person’s contribution can significantly impact their game day experience. The figure shows "net revenues" for each sport--that is, revenues minus costs. Misconception #5: Donations to athletics stay in athletics. Here are some patterns for the average "Power 5" school from 2005 to 2018. T. he biggest downside is that you can't request these for private schools, and individual states may have laws that restrict their dissemination to in-state residents. I am the founder of BusinessofCollegeSports.com and formerly served as ESPN's sports business reporter. Extraordinary Spending in the 2020 Campaign. While researching my book several years ago, I polled every FBS program in the country to learn more about the amount each reported under "direct institutional support" on their NCAA forms. In 2009-10, the Ivy League received the biggest check, for more than $4.3 million. So, even if the sweatshirt sold in the bookstore is specifically branded for the football program, that money is divided between the university and athletics. Powered by, When Hamilton and Jefferson Agreed! Those include the NITs and the women’s basketball tournament, and every other college sports championship you might find on ESPN. In the case of the University of Michigan, many of the money profited from football goes to support other student athletes. Without going into all of the nitty gritty details, I'm simply say that the financial reports each department files with the NCAA are far superior. At nearly one-third of the schools I polled back in 2012 for my book, the university took a specified percentage of each donation made to the athletic department. Athletic departments are often chastised over their finances -- from being disparaged for not paying student athletes to being shamed for not being "self-sustaining" (more on this below). The bill comes one year after the NCAA, the largest governing body for college sports in the United States, reportedly amassed $1.1bn in revenue. Meanwhile, net revenue from other men's sports and from women's sports is negative and falling. In the for-profit world, at least one of the goals of the corporation is to generate profits for shareholders. Misconception #1: All data is created equal. I recently delivered a speech to the College Athletics Business Management Association entitled "Managing Financial Data in a Public Setting." Most of the money reported in that section fell into three categories: Misconception #4: The report tells the entire story. After practicing law for four years, and contributing to Forbes and Comcast Sports Southeast as a sports business analyst, I joined ESPN in 2011 for two years as a sports business reporter. Misconception #2: Athletic departments should turn a profit. College sports programs reached a historic high-water mark during the 2016-2017 academic year. Although in theory it would be possible that some of the additional funds from big-revenue sports could be funneled back to the rest of the university, in practice this doesn't seem to happen. While they also have flaws (e.g., different schools may report items in different categories, making an apples-to-apples comparison difficult), they're far more detailed and accurate. College tuition is rising faster than medical costs, inflation, and certainly the income of 99% of Americans. Athletic departments are non-profit entities, either through their own designation or through that of their respective universities. A school that sponsored 16 sports received $90,274, and a school that sponsored 24 sports received $331,004. (Photo by... [+] Jamie Squire/Getty Images). from University of Florida Levin College of Law. Follow me on Twitter: @SportsBizMiss. Net revenues football have more than doubled, and net revenues from men's basketball--although much lower--have risen as well. For comparison, pro athletes in several sports negotiate for about 50% of total revenue. The benefit of this system is that it includes financial data for both public and private universities. For example, it is not uncommon for a funds raised for long-term projects to be kept off the athletic department's books (either within a separate development department or foundation/booster club) until the project is undertaken. To conclude, most of the money in the sports world comes from the fans, whether it be ticket sales or merchandise sales, the emotion and passion elicited by … There are two primary ways in which the public can access the financials of athletic departments. Opinions expressed by Forbes Contributors are their own. I am thankful to all of the administrators who have taken the time to educate me about various pieces of the puzzle, and I hope to continue to pay it forward by sharing what I've learned publicly. Misconception #6: The athletic department is the recipient of all licensing revenue. Each point represents one of the 229 colleges and universities categorized as "Division I" for athletics purposes. Add to that the fact that you have to request each report from each school individually, and it makes gathering these reports labor intensive. The theory is that the athletic department wouldn't actually operate in the red (when's the last time you heard of an athletic department bouncing checks? Chung mentions in his study that one area for further research is to examine how the revenue for each team and school breaks down in terms of sales categories, such as tickets and team merchandise. EY & Citi On The Importance Of Resilience And Innovation, Impact 50: Investors Seeking Profit — And Pushing For Change, Michigan Economic Development Corporation BrandVoice, Saturday Millionaires: How Winning Football Builds Winning Colleges. Delve into the details behind the money that moves college sports. I have a Bachelor of Arts in Politics from Oglethorpe University and a Juris Doctor (J.D.) This article is more than 3 years old. College sports can be readily divided into two groups: in one group, sports are an extracurricular activity mainly subsidized by the institution; in the other group, the big-revenue sports of football and men's basketball generate large and revenues far beyond the existing costs of those programs--which is money that can be spent in other ways. About 11 cents of every additional $1 from the big-revenue sports goes to the other sports. Craig Garthwaite, Jordan Keener, Matthew J. Notowidigdo and Nicole F. Ozminkowski examine these issues in "Who Profits From Amateurism? © 2020 Forbes Media LLC. In 2013, the top ten schools in college sports generated an average of $117.7 million revenue from their athletic department. College sports can be readily divided into two groups: in one group, sports are an extracurricular activity mainly subsidized by the institution; in the other group, the big-revenue sports of football and men's basketball generate large and revenues far beyond the existing costs of those programs--which is money that can be spent in other ways.