Wallace Renfro - Revenues and expenses

Five-Year Trends in Division I Athletics Finances

February 2010

Data• The data used here were collected from the NCAA Financial

Reporting System for fiscal years 2003-04 through 2007-08.

• Significant changes were made to the process beginning with the data collection in 2003-04 (e.g. definitional changes, agreed-upon procedures, etc.), so previous data are not comparable.

• It is important to note that these data were collected just as the current economic downturn was beginning. Therefore, they are not likely to reflect outcomes related to the downturn.

• When the data are divided into quartiles for this presentation, those quartiles are based on 2008 total expenses within each subdivision.

Generated Revenue Sources• Ticket Sales• NCAA and Conference Distribution• Contributions from alumni and others• Other

– Guarantees and Options– Third Party Support– Concessions– Broadcast Rights– Royalties / Advertising / Sponsorship– Sports camps– Endowment / Investment Income

Allocated Revenue Sources• Allocated Support

– Student activity fees

– Direct government support

– Direct Institutional support

– Indirect Institutional Support

Summary Data for Division IBy Subdivision

Summary of 2008 FBS Data• Large disparities seen in both revenues and expenses across FBS institutions (largest

budgets over 13 times larger than smallest budgets in FBS).

• Median institution shows negative net revenue of approximately $8 million.

• Generated revenues exceeded expenses for in 2008 at 25 institutions. The average net positive revenue for those institutions was $5 million (ranged from $2,000 to $14.2 million).

• 18 institutions showed positive net revenue when aggregating across all five years of data.

• Total budget correlates very highly (r > .96) with total generated revenue.

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FBS FCS Division I – No MFB

Generated Revenues $30,494,000($3.5 million to $118 million)

$2,978,000($600,000 to $17.5 million)

$2,125,000($400,000 to $13.7 million)

Total Revenues $41,088,000($8.3 million to $124 million)

$12,080,000($2.4 million to $38.7 million)

$10,082,000($1.3 million to $29.2 million)

Total Expenses$41,363,000

($9.2 million to $123 million)$12,115,000

($2.7 million to $40.3 million)$10,347,000

($3.4 million to $29.2 million)

Net Generated Revenue

($8,089,000)((-$30 million) to +$14.2

million)

($7,937,000)($22.7 million to $2.0 million)

($8,031,000)($22.1 million to $2.5 million)

Median (and Range) 2008 Revenues and Expenses for Division I Institutions

By Subdivision

Revenue and Expense Trends from 2004 to 2008

By Subdivision

Summary of 2004-08 FBS Trend Data• Over the five year period, generate revenues grew by 33.3 percent. Total

expenses grew by 42.7 percent.

• However, over the past two years, generated revenues grew by 15 percent and total expenses by 16 percent indicating a lessening in the growth gap between revenues and expenses.

• The three subdivisions show wide disparities among them in terms of median revenues and expenses. However, the median negative net revenue is very similar across the three subdivisions and there is a fairly narrow distribution of allocated revenue totals across the division. This may indicate some consensus on the monetary value to institutions of supporting a Division I athletics program.

Division I Median Total RevenuesBy Subdivision and Year (2004 – 2008)

Percent Increase from 2004-2008: FBS = 45.6%FCS = 52.5%No MFB = 37.3%

Division I Median Generated RevenuesBy Subdivision and Year (2004 – 2008)


Division I Median Total ExpensesBy Subdivision and Year (2004 – 2008)


Comparison of FBS Generated Revenue and Total Expense Trends

(2004 – 2008)

Comparison of FBS Median Annual Revenue and Expense Percentage Increases

(2004 – 2008)

Division I Net Operating ResultsExcluding Allocated SupportBy Subdivision and Year (2004-2008)


Selected Findings from Dashboard Indicators

By Subdivision

Summary of 2004-08 FBS Dashboard Indicator Trend Data

• The median FBS institution is approximately 80 percent self-sufficient. This is in contrast with 20-30 percent levels in the other two subdivisions.

• Coaches’ compensation as a proportion of total expenses has been fairly steady over the period, but there was a slight increase in that ratio in the last year. Total compensation illustrated similar trends.

• The median ratio of athletics expenses to institutional expenses has grown from 4.5 percent to 5.4 percent over this period. The median ratio of allocated expenses to institutional expenses is close to 1 percent.

• In the early years of this time period, athletics expenses were growing at rates that were up to 5 percent faster than institutional expenses. However, in the last year of data that gap had closed to almost zero.

Division I Median Revenue Self-Sufficiency (Gen. Rev by Total Exp.)

By Subdivision and Year (2004 – 2008)

Division I Median Proportion of Total Expenses Related to Coaches’ Compensation By Subdivision and Year (2004 – 2008)

Division I Median Proportion of Total Expenses Related to Total Compensation


Division I Median Ratio of Athletics Expenses to Institutional Expenses


Division I Median Ratio of Allocated Revenues to Institutional Expenses


Division I Median Increase Gap Between Athletics Expenses and Institutional Expenses


Revenue and Expense Detail For FBS InstitutionsBy Expense Quartile

Summary of 2004-08 FBS Revenue and Expense Detail

• There are large disparities within FBS in both revenues and expenses. For instance the median expenses in the top quartile were approximately $79 million, versus a median a $19 million in the lowest quartile.

• The gap between high and low seems to be widening. The lowest quartile shows the lowest rate of growth in generated revenues; conversely, the highest quartile is growing expenses at the fastest rate.

• Only the second quartile shows positive growth in net generated revenue.

• Ticket sales are the top revenue category in the three highest quartiles. Student fees are the top revenue generator in the lowest quartile.

• Salaries are the main expense items in all quartiles at approximately 33 percent of total expenses. Facilities expenses are second for the top quartile, for all others it is grants-in-aid.



Generated Revenues

Ticket Sales $11,398,000 (23.9%) $669,000 (4.8%) $569,000 (5.1%)

NCAA/Conf. Distributions $7,145,000 (15.0%) $541,000 (3.9%) $441,000 (3.9%)

Guarantees/Options $1,071,000 (2.2%) $370,000 (2.7%) $133,000 (1.2%)

Alumni Contributions $10,267,000 (21.5%) $1,150,000 (8.3%) $838,000 (7.5%)

Third-Party Support $239,000 (0.5%) $32,000 (0.2%) $21,000 (0.2%)

Concessions $1,271,000 (2.7%) $80,000 (0.6%) $51,000 (0.5%)

Broadcast Rights $1,390,000 (2.9%) $14,000 (0.1%) $20,000 (0.2%)

Royalties/Sponsorships $2,899,000 (6.1%) $310,000 (2.2%) $358,000 (3.2%)

Sports Camps $556,000 (1.2%) $132,000 (1.0%) $140,000 (1.2%)

Investment Income $1,202,000 (2.5%) $338,000 (2.4%) $73,000 (0.7%)

Miscellaneous $1,156,000 (2.4%) $251,000 (1.8%) $196,000 (1.7%)

Total Generated Revenues $38,595,000 (80.8%) $3,887,000 (28.0%) $2,840,000 (25.3%)

Allocated Revenues

Direct Institutional Support $4,323,000 (9.1%) $6,268,000 (45.2%) $5,318,000 (47.4%)

Indirect Institutional Support $1,504,000 (3.1%) $1,458,000 (10.5%) $935,000 (8.3%)

Student Fees $2,834,000 (5.9%) $2,055,000 (14.8%) $2,087,000 (18.7%)

Direct Government Support $505,000 (1.1%) $208,000 (1.5%) $29,000 (0.3%)

Total Allocated Revenues $9,166,000 (19.2%) $9,989,000 (72.0%) $8,369,000 (74.7%)

Total Revenues $47,760,000 $13,876,000 $11,209,000

Mean (and Percent of Total Revenues) for 2008 by Revenue CategorySplit By Subdivision



Grants-in-Aid $6,891,000 (15.0%) $3,472,000 (25.0%) $3,171,000 (28.1%)

Guarantees/Options $1,445,000 (3.1%) $87,000 (0.6%) $68,000 (0.6%)

Salaries/Benefits (Univ. Paid) $14,693,000 (31.9%) $4,422,000 (31.8%) $3,577,000 (31.6%)

Salaries/Benefits (3rd Party) $238,000 (0.5%) $31,000 (0.2%) $21,000 (0.2%)

Severance Pay $288,000 (0.6%) $27,000 (0.2%) $36,000 (0.3%)

Team Travel $3,273,000 (7.1%) $1,136,000 (8.2%) $937,000 (8.3%)

Recruiting $769,000 (1.7%) $272,000 (2.0%) $192,000 (1.7%)

Equipment/Uniforms/Supplies $1,224,000 (2.7%) $447,000 (3.2%) $342,000 (3.0%)

Fundraising $1,491,000 (3.2%) $269,000 (1.9%) $391,000 (3.5%)

Game Expenses $2,049,000 (4.6%) $323,000 (2.3%) $279,000 (2.5%)

Medical $619,000 (1.3%) $174,000 (1.3%) $122,000 (1.1%)

Membership Dues $276,000 (0.6%) $47,000 (0.3%) $45,000 (0.4%)

Sports Camps $333,000 (0.7%) $90,000 (0.6%) $95,000 (0.8%)

Spirit Groups $204,000 (0.4%) $49,000 (0.4%) $27,000 (0.2%)

Facilities Maint. and Rental $6,242,000 (13.6%) $738,000 (5.3%) $395,000 (3.5%)

Indirect Institutional Support $1,504,000 (3.3%) $1,458,000 (10.5%) $935,000 (8.3%)

Other $4,451,000 (9.7%) $871,000 (6.3%) $670,000 (5.9%)

Total Operating Expenses $45,990,000 $13,914,000 $11,302,000

Mean (and Percent of Total Expenses) for 2008 by Expense CategorySplit By Subdivision


Quartile 1 Quartile 2 Quartile 3 Quartile 4 Overall FBS

Generated Revenues

$79,228,069 $45,756,700 $21,098,122 $6,885,200 $30,494,000

Total Revenues

$82,976,000 $54,672,600 $32,118,300 $19,387,300 $41,088,000

Total Expenses

$76,945,900 $51,954,000 $32,164,200 $19,441,800 $41,363,000

Net Generated Revenue

$78,265 ($5,928,900) ($10,423,800) ($10,088,200) ($8,089,000)

Median 2008 Revenues and Expenses for FBS Institutions

By Expense Quartile



Category 1(% of Total)

Ticket Sales(27.0%)

Ticket Sales(25.3%)

Ticket Sales(19.9%)

Student Fees(26.3%)

Ticket Sales(20.9%)


Alumni Contributions

(23.5%)


(22.6%)

Direct Inst. Support(16.3%)



(18.3%)


NCAA/Conf. Distributions

(13.7%)


(17.8%)


(14.9%)


(7.2%)


(14.4%)


Royalties and Sponsorships

(6.3%)



(10.1%)

Guarantees(6.1%)


Top 4 Revenue Categories for FBS InstitutionsBy Expense Quartile




Salaries and Benefits(30.4%)






Facilities and Maintenance

(20.3%)

Grants-in-Aid(16.6%)







(11.4%)

Other Expenses

(9.4%)

Team Travel(8.8%)


(9.2%)


Other Expenses

(8.4%)

Other Expenses

(8.1%)

Team Travel(7.9%)

Other Expenses

(5.0%)

Other Expenses

(7.8%)

Top 4 Expense Categories for FBS InstitutionsBy Expense Quartile