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NCAA report shows athletic expenses rising again

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press
Friday, May 3, 2013 - 8:27 am

INDIANAPOLIS — Athletic expenses are rising at a faster pace than revenue is being generated at most Division I schools, according to a new NCAA study.

The 2012 Revenue and Expenses Report, released this week, shows Football Bowl Subdivision schools are spending 10.8 percent more on athletics than in 2011 despite generating new income of only 4.6 percent. Non-football playing Division I schools are contending with a larger discrepancy -- spending 8.8 percent more while seeing their revenue base actually shrink by 1.7 percent.

Football Championship Subdivision schools did far better, holding expenses to an increase of only 6.8 percent while generating a 9 percent increase in revenue over 2011 though median losses expanded by 6.7 percent from 2011 to 2012.

A year ago, the disparities were far smaller. FBS schools, for instance, had budget increases of 9.7 percent and revenue increases of 8.8 percent.

It's not the only troubling financial sign in the report.

Since the NCAA began compiling these numbers in 2004, athletic department budgets have increased substantially when measured as a portion of a school's overall budget. It has gone from 4.6 percent to 5.5 percent.

"There's been a consistent trend of increases in athletics spending mirroring those of the institution over the past several years," NCAA Chief Financial Officer Kathleen McNeely said in a statement posted on the governing body's website. "This year's report shows a break from that trend. Whether it is an anomaly or the beginning of a new trend certainly bears monitoring."

Losing money on sports is not new.

Only 23 Division I schools reported profits in their athletic departments in this report -- the same total as 2011 though some of the schools on this year's list were different. The report did not identify schools individually.

The largest portion of athletic department expenses, 34 percent, continue to be spent on coaches where football, men's and women's basketball and men's ice hockey coaches continue to outpace the pay rate of their coaching colleagues in other sports. Scholarships account for 15 percent of overall budgets.

One factor driving up costs over the past decade is the race to upgrade football stadiums, basketball arenas and other sports facilities on campus. Facility rental and maintenance now accounts for 14 percent of all athletic department expenditures.

But one previous concern, how the sluggish economy would affect costs and income in the sports world, did not change the numbers.

"Given the popularity of college sports, it comes as no surprise that the recession does not seem to have been particularly detrimental," said Dan Fulks, the accounting program director at Transylvania University who authored the 2012 report.

What it does show is a wide disparity in budgeting for Division I athletics.

The largest budget in the FBS was $138.27 million on athletics compared with a median budget of $56.265 million. And one school reported earning nearly $163.3 million in revenue -- more than four times the median income of other schools ($40.581 million).

Fulks believes the number of self-sufficient athletic programs could increase in the future, too, as more conferences make money through their own conference television networks and other media platforms.