Highlights:
“The deficit problem of Rutgers’ athletics program isn’t new, but a NorthJersey.com report revealed that its 2020-21 deficit of $73 million is larger than “any other public university in a major conference” in years.
“To fill the gap, “fees, student aid, and university support” ballooned to close to $43 million.
The school also gave the department a $21.5 million loan.
“Large and persistent athletic department deficits lead schools to increase student athletic fees (many exceed $1000 per student yearly) and contribute to increases in tuition.
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Although college sports play a big role in bringing in money for universities, they rarely generate a positive net revenue — especially in light of COVID-19.
Among those reporting a net positive, the median profit per school was $7.9 million. And among the 40 autonomy schools reporting a negative net revenue, the median loss was $15.9 million. In other words, the majority of universities in the nation’s top athletic conferences — the schools you see on TV every weekend competing for national championships — lost money through their sports programs to the tune of approximately $16 million each.
The situation isn’t so rosy for Division I non-autonomy schools, or those outside the Power Five conferences. All 64 of these institutions lost money in 2019, with a median deficit of $23 million per school.
Also included in the NCAA’s Division I classification are Football Championship Subdivision (FCS) schools, the former I-AA programs that compete in a year-end tournament to determine the national champion. The Power Five and other top conferences are classified as Football Bowl Subdivision schools, which compete at the season’s end through a series of bowl games culminating in a four-team playoff to determine the champion.
Of the 125 FCS schools, all reported a negative net generated revenue in 2019, with a median loss of $14.3 million per institution.
Finally, Division I includes 97 schools without football programs. All of them had a negative net revenue in 2019, with a median loss of $14.4 million. And not one college in the NCAA’s Division II or III saw their revenues exceed expenses that year.
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Michigan athletic department: $47.6 million deficit for 2021 fiscal year
Michael Cohen Detroit Free Press
Michigan’s athletic department reported a deficit of more than $47.6 million during the 2021 fiscal year, according to a financial report obtained by USA Today.
The department generated $101,236,069 in total operating revenues and $148,862,376 in total operating expenses. The school’s 2021 fiscal year began in July 2020 and ran through June 30, 2021.
While significant, the deficit is notably smaller than the $80 million figure mentioned by athletic director Warde Manuel in October 2020, at which point the Big Ten was navigating the pandemic with a shortened football season. The return of fans to Michigan Stadium and Crisler Center for the 2021 football and basketball seasons will likely restore the figures to more traditional ranges in the 2022 fiscal year. How the $47.6 million deficit for the 2021 fiscal year will be covered is unclear.
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Even as commercial revenue streams have grown for top-billing football and men’s basketball, athletic expenditures exceed revenues at the vast majority of schools. In 2019, only 25 of 130 schools in the high-grossing Football Bowl Subdivision (FBS) whose members are large, mostly public universities (with some exceptions such as Notre Dame, Northwestern, and Stanford) reported positive net revenues (see here). In fact, the median athletic program in FBS in 2019 (the last pre-pandemic year) had an operating deficit of $18.8 million. The same was true in the other two Division I subdivisions: among the 125 schools of the Football Championship Subdivision (FCS) the median program ran a deficit of $14.3 million, and in DI without football (94 schools) it was of $14.4 million. Large and persistent athletic department deficits lead schools to increase student athletic fees (many exceed $1000 per student yearly) and contribute to increases in tuition. As the cost of attending college rises, so does student debt which reached a record of over $1.6 trillion in the United States in 2021.
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Student fees and institutional support are a common revenue stream, but some schools relied on them for millions of dollars in assistance in 2020-21, recent reports found.
The deficit problem of Rutgers’ athletics program isn’t new, but a NorthJersey.com report revealed that its 2020-21 deficit of $73 million is larger than “any other public university in a major conference” in years.
To fill the gap, “fees, student aid, and university support” ballooned to close to $43 million.
The school also gave the department a $21.5 million loan.
Rutgers’ ailing balance sheet comes in a year where the Big Ten reportedly had “drastically” lower earnings than the SEC due to pandemic-related football decisions, but the school still received more than $31 million from the conference and the NCAA.
UConn, whose women’s basketball teams have won 11 national titles, has also suffered several years of budgeting woes, and reported a shortfall this year of $47.2 million. Student fees and institutional support bridged the gap.
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I was doing some research using the Knight-Newhouse College Athletics Database to calculate the profit of Division I public athletic programs. I was trying to learn how many programs turned a profit in 2020 (the 2021 COVID year was not used because it has some convoluted, though interesting, data: for instance, ticket sales varied greatly based on conference rules and state laws related to the pandemic; and, many athletic departments reduced staff or asked coaches to take pay cuts). Therefore, I created a complete list for all Division I institutions (below).
Of available data, a total of 18 of 229 public Division I athletics programs generated more money than they spent in 2020. This ranged from a whopping $270 million profit (thank you for the gift, Nike co-founder Phil Knight) at the University of Oregon to a massive $48.2 million deficit at James Madison University.
What is the athletics deficit at your school?