Tag: hotline alert

Athletic departments at the 10 public universities in the Pac-12 experienced an $81 million shortfall last year, with only five schools reporting an operating surplus.

And that’s the good news on money matters across the conference. The situation gets much worse when university support is removed from the budgets.

That support takes two primary forms in major college athletics: 1) direct transfers from central campus to athletic departments; and 2) money from student fees that’s allocated to athletics.

In each case, the support is booked as revenue in accordance with the NCAA’s financial reporting rules.

The 10 public schools in the Pac-12 closed out the 2022-23 fiscal year — the first without COVID policies for spectators — with $1.22 billion in revenue and $1.3 billion in expenses, according to financial documents obtained by the Hotline (Statements of revenues and expenses were due to the NCAA earlier this year.)

Washington topped the list with $151.6 million in reported revenue, just $1 million more than Oregon, while Washington State was at the bottom with $79 million.

But the revenue figure includes $138.2 million in campus support through direct transfers and student fees.

Remove that support and the budget shortfall for the 10 public schools soars to $219.5 million.

When Stanford’s data is added — the Cardinal was $33.3 million in the red without campus support — the total shortfall for 11 athletic departments climbs to $252.8 million.

(The conference’s other private school, USC, did not make its athletic department budget for the 2023 fiscal year available.)

What’s more, the $252.8 million shortfall without campus support does not include an internal loan of $31.6 million to Arizona athletics from the university that was booked as indirect, not direct, revenue.

So the real deficit for the 11 athletic departments last year was close to $300 million.

“Schools need to soberly address the role sports is intended to play on campus,” David Carter, an adjunct professor of sports business at USC and founder of the Sports Business Group, wrote in an email.

Carter added that universities must “measure both the return on investment and the return on objective associated with funding athletic departments.”

With any assessment of athletic department finances, context is critical:

— Football and men’s basketball are typically the only sports programs in major college athletics that generate a profit. In the interest of offering broad-based opportunities, each Pac-12 school supports more than a dozen Olympics sports teams that lose money.

— Support for athletics through direct transfers and student fees is common across major college athletics. The Pac-12’s public universities received an average of $13.8 million from central campus in the 2023 fiscal year, an amount roughly comparable to the support provided by many schools in the Power Five conferences.

— Only a handful of athletic departments across the country generate an operating surplus without relying on any support from central campus. In the Pac-12, there is just one: Oregon, which produced a $3.8 million profit in 2023.

Oregon’s situation stands in stark contrast to Arizona State, Cal, Colorado, Stanford and UCLA, which had deficits in excess of $30 million when campus transfers and student fees were removed from their revenue totals.

In fact, only Washington experienced a shortfall of less than $10 million without direct support. The Huskies were just $8.7 million in the red during the 2022-23 fiscal year.

So, how much campus support is too much?

“That’s a complicated question,” said Andrew Zimbalist, a Smith College economics professor and author of the 2017 book Unwinding Madness: What Went Wrong with College Sports and How to Fix It.

“Schools subsidize a lot of activities at universities. The question is whether the size is proportionate to the importance.”

Athletic departments generally, and football teams specifically, are often the most visible arm of the 133 universities that participate in the Football Bowl Subdivision.

There are myriad instances of success leading to increases in brand awareness, philanthropy and applications for admission, especially from out-of-state students required to pay higher tuition fees.

Perhaps the best recent example was Colorado’s early season surge under new coach Deion Sanders last fall, which did wonders for the school’s visibility. The Buffaloes experienced a 20 percent increase in applications for enrollment in the 2024-25 school year, according to the Boulder Daily Camera.

Was the increase entirely attributable to Sanders? Definitive conclusions are elusive, but an assistant vice chancellor told the Daily Camera that “the exposure that CU Boulder has received since Coach Prime was hired has been tremendous.”

Because of the visibility it generates, college athletics is often described as the “front porch” for universities. Competitive success on the field and the court creates a more attractive porch.

After all, political science lectures aren’t plastered across network television each week.

“You could make the case that the transfers (from campus) are more of a marketing expense because athletic departments are major ambassadors for the universities,” Carter said.

“Administrations don’t look at $25 million like it’s money specifically for branding, but they inherently believe that it’s important to have strong athletics.”

The level of campus support across the Pac-12 ranges dramatically and skews the bottom lines in the financial data schools must report to the NCAA each winter.

For example, Washington State reported the lowest total revenue, just $79 million, but the Cougars only received $6.8 million in direct campus support in 2023.

Meanwhile, Colorado reported $127 million in revenue, but the figure included $29.4 million in direct transfers and student fees.