College sports is a booming industry that generates billions of dollars, but where does that money go? According to the NCAA annual budget, nearly 60 percent of the NCAA's revenue is distributed directly to its Division I members with approximately $120 million earmarked for grants-in-aid and another $60 million for student assistance.
This claim alone does not give the full picture of budgets and expenses amongst Division 1 athletic programs. There is so much depth and complexity to spending money in college athletics. The Knight Commission houses the College Athletics Financial Information database (CAFI), and according to it, the NCAA distributes 22% on facilities and equipment, 18% on coaches compensation, 18% on support and admin compensation, 13% on athletic student aid, 11% on game expenses and travel, 2% on recruiting, 2% on competition guarantees, and 11% on other expenses.
Q: According to CAFI Database, the NCAA FBS Athletic Departments made a total of $8,776,314,457 in revenue in 2018, how much of that money is spent on athletic expenses?
A: Of that total amount of revenue, the FBS Athletic Departments lost $8,570,541,245 in expenses during the 2018 fiscal year. Those expenses can be broken down into further categories. The major expenses of NCAA athletic departments, ranked in order, include facilities and equipment, coaches compensation, support and administration compensation, athletic student aid, game expenses and travel, recruiting, competition guarantees, and other expenses.
College sports finances in tough times
By Joseph Swetonic and Robert Rohrbach
Q: How has spending changed over the last 10 years in the NCAA?
A: The total median spending budget for a FBS NCAA Athletic Department in 2018 was approximately $64 million. In 2005, the same athletic departments spent an average of $37 million, adjusting for inflation. Despite adjusting for inflation, the median athletic department is spending almost twice as much as they were last decade. Although the median athletic department is spending almost double, some of the largest schools in Power 5 conferences are more than doubling their spending. For example, the University of Alabama spent $56.9 million in 2005, and in 2018 they spent $166.5 million on their athletic department. Not only are the middle of the pack athletic departments doubling their spending, but some of the elite athletic departments, like Alabama, are increasing their spending by almost 200%.
Q: Has the pay for administrators and support staff in the NCAA changed much over the last 10 years?
A: 17% of the expenses by FBS athletic departments went to administration and support staff in 2005, and exactly 17% of the budget went towards administration in 2018 as well. The administration and support staff includes those responsible for planning, managing, coordinating, operating, and evaluating athletic and activity programs for the school they work for. The expenses and budget needs for administration and support staff has not changed drastically over the last decade. In 2005, the average FBS school paid $6.18 million towards administration and support staff costs. In 2018, the average FBS school paid $11.4 million towards administration and support staff costs. Although the same percentage of the overall expenses goes toward support staff, the additional $5 million in expenses has gone toward an expansion of resources for the support of student-athletes. Athletic departments are doing everything they can to be adaptable and meet all of the demands of student-athletes.
Q: The percentage of the budget dedicated to administration and support staff has not changed much over the last 10 years, but how much are FBS coaches getting paid compared to 10 years ago?
A: The median FBS school pays their coaches $12.8 million per year, which accounts for 19.7% of the athletic department expenses. This is a 1.2% increase from 2005, when coaches were paid $6.69 million per year across the athletic department.
Further research has found that FBS football coach compensation is contingent on seven main factors: BCS ranking, recruiting success, lifetime winning percentage, years of experience, football revenue, enrollment, and graduation rate. Coaches and administration make up nearly 40% of an athletic department’s expenses each year.
Q: Do student-athletes receive a lot of student aid money?
A: Student-athlete aid money or scholarships are given to more than 180,000 student athletes and roughly $3.6 billion in athletic scholarships are distributed annually. Until 2011, student-athletes did not receive the same amount of financial aid as the regular student population. Students could get scholarships that covered the cost of tuition plus additional expenses, while athletes were restricted to scholarships that only covered the cost of tuition.
In 2011, the NCAA increased athletics-based financial aid by granting student-athletes scholarships that covered the cost of tuition plus additional expenses. This piece of legislation was beneficial for student-athletes, but student athletes are continuing to advocate that they need to be paid for the revenue that they are generating for the University. For the last 10 years, roughly 15% of spending by athletic department’s has gone towards student-athlete aid money.
Q: How much of the revenue is going towards medical expenses for players?
A: Athletes continue to get faster and stronger and as players continue to become more physically developed, the injury risk becomes more severe. Statistics show that only 1% of NCAA spending goes towards covering the health needs of players. Between growing awareness of mental health issues and concussion protocol, it can be assumed that the medical budget of college athletics has increased over the last 10 years. However, this is not the case. Approximately 1.4% of athletic expenses have gone towards medical expenses for the last 10 years of college sports. A mere average of $895,000 goes towards the safety of players and their medical needs.
The NCAA uses the term “covered accident” to exclude the coverage of a majority of the sport-related injuries that occur while playing sports for the University. The only injuries explicitly covered are those with short-term and immediately assessable effects. To take it a step further, the NCAA does not mandate university policies, so each University is allowed to cover the medical expenses they desire. If a student gets injured playing intramural basketball or a student-athlete needs to get long-term health coverage to treat concussions produced by playing for a university football team, both students have the possibility of receiving little to no medical help from the school.
Q: What percent of the expenses go towards equipment and facilities?
A: There has been over a 5% increase in spending towards facilities and equipment since 2005 in college athletics. In 2005, FBS schools were spending an average of $4.9 million on facilities and equipment. In 2018, the same schools were spending an average of $12.45 million which accounted for 19.2% of the budget.
Most schools build new facilities to keep fans happy and attract top recruits. However, an article by the Journal of Marketing for Higher Education found that even after updating and building new athletic facilities, there was no significant improvement within football and basketball recruiting rankings.
Q: If athletic departments are spending so much money on their facilities, they have to be spending a lot of money on recruiting as well, right?
A: As of 2018, only 1.79% of the budget goes towards recruiting. In 2005, 1.80% of the budget was spent on recruiting, so there has been very little change in this trend over the last 10 years. The only sport spending an increasing amount of money on recruiting is NCAA basketball. Basketball programs are strategizing that an increased amount of spending will lead to an increase in the amount of wins per season. There is no research available on increased spending on recruiting and its correlation to recruiting success.
Q: Is that all the money spent by athletic departments?
A: There is some access spending deemed “other expenses” by athletic departments. Other expenses include uniforms, fundraising, marketing and promotion, sports camps, spirit groups, membership and dues, student-athlete meals, operating expenses, and direct overhead and administrative expenses. In 2005, FBS schools were spending approximately 15.8% of their budget on other expenses. In 2018, only 11.6% of expenses were designated for other expenses. Less miscellaneous expenses are accruing and athletic departments are giving each of their dollars a specific responsibility as time progresses.
By Sarah Billiard
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