No College or University in the United States Has an Athletic Department That Is Financially Self-Sustaining

Gregg Easterbrook on the eternal struggle between jocks and nerds.

Bowl season is nearly upon us, and college football conferences are reshuffling like mad, with bowl invites, television rights and media exposure the motives. College marketers know that in 2008 the University of Texas had $88 million in football revenue while Ohio State had $68 million (Wall Street Journal figures), and football dollars are still going up. The money rush isn’t confined to the top, rather it is spread broadly across the higher-education landscape. The University of North Carolina at Charlotte, which plans to start Division I-AA participation in 2013, is asking $2,500 per personal seat license for good seats at its new field, plus a donation of up to several thousand dollars, making the true PSL price more like $5,000. That’s for a Division I-AA program that doesn’t even exist yet.

Despite the cash-grab in big-college athletics — Texas, already the leader in football revenue, cut an even better deal for itself this fall by threatening to leave its conference — nearly all universities lose money on sports. Recently the NCAA reported that only 14 Division I-A programs clear a profit, while no college or university in the United States has an athletic department that is financially self-sustaining. Nobody in Division I — not Alabama, not Auburn, not Oklahoma, nobody — has an athletic department that pays its own way.

The median big-university subsidy from general funds to sports is $10 million per school, the NCAA found. Many major college athletic programs claim to be self-sustaining, since this is what everyone wants to hear, but actually are not. For example, the University of Oregon claims its athletic department is self-sustaining. Yet the school’s general fund gives the athletic department nearly $1 million per year,Rachel Bachman of The Oregonian reports. Increasingly, college students who don’t play sports are charged to support those who do. USA Today reports that in the 2008-09 school year, colleges charged their students $795 million to support athletics. Often this wasn’t revealed, with the costs buried in tuition fees that students, and their parents, thought were solely to support academics.

The money-pit aspect of big collegiate sports occurs despite the flow of booster contributions to “athletic foundations” and similar accounts. Booster funds not only fail to make collegiate sports self-sustaining, they may harm the colleges overall — since many alumni and boosters who might donate to the general endowment or the scholarship campaign of Maryland or Miami or Wisconsin donate instead to the booster organizations. Over the years, billionaire T. Boone Pickens has donated nearly $500 million to Oklahoma State, his alma mater — but most of the money has gone to athletics, not academics. The donation that UNC-Charlotte requires, in addition to the PSL fee? It goes to the booster fund, not to academics. At many colleges and universities, athletic programs cannibalize donations that might have gone to education.

There’s even more at the link. See also this post from earlier in the month…