Tuesday, November 24, 2015

Big Money College Sports Get Bigger

Washington Post:
Big-time college sports departments are making more money than ever before, thanks to skyrocketing television contracts, endorsement and licensing deals, and big-spending donors. But many departments also are losing more money than ever, as athletic directors choose to outspend rising income to compete in an arms race that is costing many of the nation’s largest publicly funded universities and students millions of dollars. Rich departments such as Auburn have built lavish facilities, invented dozens of new administrative positions and bought new jets, while poorer departments such as Rutgers have taken millions in mandatory fees from students and siphoned money away from academic budgets to try to keep up.
To examine why so many big college athletic departments struggle to profit, The Washington Post reviewed thousands of pages of financial records from 48 public universities in the “Power Five,” the five wealthiest collegiate conferences. All 2004 figures are adjusted for inflation.
Among the findings:
●From 2004 to 2014, the combined income of the 48 departments nearly doubled, from $2.67 billion to $4.49 billion. The median department saw earnings jump from $52.9 million to $93.1 million.
●After a decade marked by surging income, 25 departments still ran a deficit in 2014. Twelve departments, including Auburn and Rutgers, actually lost more money in 2014 than in 2004.
● While some athletic programs have eliminated or reduced mandatory student fees earmarked for sports, other programs are charging more than ever. Students paid $114 million in required athletics fees in 2014, up from $95 million in 2004.
Athletic directors at money-losing departments defend their spending as essential to keeping pace with competition. Their programs benefit universities in ways that don’t show on athletics financial statements, they said, like media exposure that can cause increased applicants and help fundraising.
There are some great graphics and more details in the article (I'd have some of the graphics here, but the Post has gone all New York Times on screwing over free use of their graphics).  Just like in the rest of society, the rich get richer and the poor go broke trying to keep up with the Joneses.  Also much like the real economy, massive rewards go to some despite contributing little or nothing to the betterment of society. This is one of the better examples of how skewed our priorities are.

No comments:

Post a Comment