How Taxpayers Are Funding the $10 Billion Gap Between Elite College Sports Programs and the Rest

Because education encompasses so many factors? JL

Shane Shifflett and Ben Hallman report in Huffington Post:

A small handful of the very wealthiest athletic departments harvest so much revenue that it almost doesn’t matter how much they spend.

James Madison University’s football team is on a roll. The Dukes are 9-2 on the season and have advanced to the second round of the Football Championship Subdivision playoffs. The Virginia school even hosted ESPN’s flagship college football broadcast, GameDay, for an earlier contest.

But those wins haven’t come cheap. More than half of the $30 million that James Madison spent on football from 2010 to 2014 came from student fees, according to annual filings with the NCAA. All told, the university poured $146 million in subsidies into its athletics department over that period, spending more than $4 in student money for every $1 it earned from ticket sales, royalties and other outside revenue.

The Huffington Post and The Chronicle of Higher Education have teamed up to tell the story of what the subsidization of college athletics means for universities like James Madison and for the students who are forced to foot the bill, often without their knowledge or real consent. The investigation, which included an analysis of financial records from 201 public universities, reveals a large and growing divide between a handful of colleges with elite sports programs — and those like James Madison that overwhelmingly finance their ambitions with student money.

This is what that divide looks like.

The Great Divide

In the past five years, 201 athletic departments earned $26 billion. But they spent $35 billion. As a result, just 21 broke even or recorded a budget surplus. The other 180 used $10 billion in student fees and other support to make up for the shortfall.

Another way to view the divide between rich and poor college sports programs is to compare the 50 universities most reliant on subsidies to the 50 colleges least reliant on that money. The programs that depend heavily on student fees, institutional support and taxpayer dollars have seen a jump in income in the past five years — and also a large increase in subsidy dollars.

George Mason University, in Virginia, is a typical highly subsidized college. Its men’s basketball team made a deep run in the NCAA tournament a decade ago, but has had mixed success since.

The University of Mississippi is a typical mostly self-sufficient school. Because its athletic department earns so much outside revenue from sources like donations and television and licensing deals pegged to its football team, Ole Miss sports nearly pay for themselves.

University of Mississippi’s Athletic Revenue Sources, 2010 - 2014

Earned revenue

Subsidies

Source: University of Mississippi (2014, 2013, 2012, 2011, 2010). Revenue adjusted for inflation.

George Mason University’s Athletic Revenue Sources, 2010 - 2014

Earned revenue

Subsidies

Source: George Mason University (2014, 2013, 2012, 2011, 2010). Revenue adjusted for inflation.

In recent years, conference alignments have undergone massive upheaval, with schools scrambling to improve their lot in the athletic universe.

For the other schools, sports are a money-losing proposition. Some universities rely almost completely on student fees and other subsidies to fund their athletic ambitions.

There’s The Power Five … And Then Everyone Else

Athletic departments in the so-called power conferences took in 81 percent of all college sports revenue we analyzed in 2014. The other 150 schools scrapped over the rest, which wasn’t enough to cover expenses. As a result, these have-not programs accounted for 86 percent of all subsidies.

Source: 2014 NCAA financial reports

All values adjusted for inflation. Read our methodolgy.

A small handful of the very wealthiest athletic departments harvest so much revenue that it almost doesn’t matter how much they spend. These fortunate few break even, or, like the University of Texas and 11 other schools, even return some of that cash back to their host university.

Universities like the University of Alabama that compete in the so-called power five conferences — the SEC, Big Ten, Big 12, Pac 12 and ACC — regularly play in sold-out stadiums and are broadcast on major television networks. A conference that earns more can distribute bigger paychecks to its members. And the more an athletic department earns, the more it can invest in campus facilities used to attract top players and offer coaches outsized salaries.

This year, the Southeastern Conference distributed a record $31.2 million between all its members including Alabama. A key benefit for students of all these riches: Power schools largely forgo the large subsidies that smaller athletic programs rely on.

Big Ten

Power conference

2014 Revenue: $1 billion

Big 12

Power conference

2014 Revenue: $804 million

Southeastern

Power conference

2014 Revenue: $1 billion

Pacific-12

Power conference

2014 Revenue: $886 million

Atlantic Coast

Power conference

2014 Revenue: $633 million

Schools that compete in other conferences aren’t as fortunate. They are jostling for position, trying to improve their athletic fortunes. Since 1991, the University of North Carolina at Charlotte has jumped conferences four times: from the Sun Belt Conference to the Metro Conference, then to Conference USA, from Conference USA to the Atlantic 10, then back to Conference USA.

Outside the power five, very few sports programs even approach self-sufficiency.

American Athletic

2014 Revenue: $435 million

Mountain West

2014 Revenue: $326 million

Missouri Valley

2014 Revenue: $114 million

USA

2014 Revenue: $353 million

The Summit League

2014 Revenue: $93 million

Big Sky

2014 Revenue: $155 million

Sun Belt

2014 Revenue: $198 million

Southwestern Athletic

2014 Revenue: $44 million

Southern

2014 Revenue: $95 million

Big West

2014 Revenue: $120 million

Western Athletic

2014 Revenue: $71 million

Southland

2014 Revenue: $105 million

Horizon League

2014 Revenue: $78 million

Mid-American

2014 Revenue: $331 million

Colonial Athletic Association

2014 Revenue: $122 million

Ohio Valley

2014 Revenue: $110 million

Mid-Eastern Athletic

2014 Revenue: $63 million

America East

2014 Revenue: $140 million

Atlantic 10

2014 Revenue: $108 million

Atlantic Sun

2014 Revenue: $79 million

Big South

2014 Revenue: $42 million

Source: 2014 NCAA financial reports.

Conference alignments by each school’s 2013-2014 basketball affiliation.

Conferences with fewer than two schools are excluded.

Conference breakdowns don’t include private universities and some schools that did not respond to us by our deadline.