The Black Hole of College Finances: Athletics

Graphic credit: JLARC
Graphic credit: JLARC

by James A. Bacon

Of the 269 sports programs at Virginia’s 15 public colleges and universities, only four pay their own way — the Virginia Tech and the University of Virginia football and basketball programs. The rest lose money and are subsidized by mandatory student fees equivalent to 12% of tuition and fees in 2011-2012, according to a blockbuster report just published by the Joint Legislative Audit and Review Commission (JLARC).

Virginia students collectively paid $160 million in athletic fees that year — 49% more than in 2006-2007. Athletic fees vary widely from institution. They are smallest at Virginia Tech, only $267 per student, which has profitable football and basketball programs and a large student body across which to spread the costs, but they are stunningly high at smaller institutions. Longwood University students effectively paid $2,044 in 2012-13, and Christopher Newport University paid $1,795.

Graphic credit: JLARC. (Click for more legible image.)
Graphic credit: JLARC. (Click for more legible image.)

At Norfolk State University mandatory athletic-related fees amounted to a colossal 24% of in-state tuition and fees in 2012-2013. With those priorities and what the Virginian-Pilot calls “significant accreditation issues,” is anyone surprised that the NSU board of visitors recently fired President Tony Atwater?

Even while crying crocodile tears over tight-fisted state support for higher education, many state institutions have been steering resources into money-losing athletic programs.  States JLARC:

Virginia athletic programs tend to spend more than other schools in comparable NCAA divisions and have increased their spending faster than other programs across the country. Most of the athletic spending in Virginia can be attributed to growth in scholarships, coaching and support salaries, and facilities.

Graphic credit: JLARC. (Click for more legible image.)
Graphic credit: JLARC. (Click for more legible image.)

Scholarships: Virginia institutions spent $22 million more on athletic student aid in 2011-12 than six years earlier. (General student aid declined during that period.) Higher tuition accounts for only part of that increase. Universities also have been handing out more athletic scholarships. Old Dominion University led the way, with James Madison University, Virginia Tech and NSU handing out an above-average number of full-scholarship equivalencies.

Coaching staff: The public colleges have been loading up on coaching staff and boosting salaries. Virginia Commonwealth University more than doubled its average salary for men’s head coaches. (Men’s basketball coach Shaka Smart probably had a lot to do with that.) Statewide, growth for coaches’ salaries ran 31% between 2006-07 and 2011-2012.

Facilities: Virginia institutions have spent $342 million on capital projects related to athletics in the last six  years. New facilities not only run up debt service costs but incur ongoing obligations for buildings & grounds maintenance, utilities, rental fees and equipment maintenance.

Much of this spending is driven by the quest for status associated with participation in NCAA’s Division I, JLARC notes. Switching divisions comes with major costs such as an increase in the number of scholarships offered and the number of sports the institution is required to field.

A case in point is Longwood University, which made the move to Division I in 2007-2008 to “increase visibility and enhance the institutional image.” Between 2000-2001 and 2009-2010 athletic expenditures at LU more than tripled, to $6.8 million. Because Longwood athletic programs generated only 10% of their own revenue, the balance came from student fees– which also tripled, to $2,009 per student.

Likewise, the introduction of football programs is expensive. The sport is a crowd pleaser but it runs up costs. Seven years after introducing football in 2005, ODU had tripled its athletic expenditures to $34.4 million.

Ironically, while students shoulder much of the cost burden, their level of interest isn’t always high. Average attendance at George Mason University basketball games runs about 2% of the student body. In JLARC-led focus groups of students at all 15 institutions, a majority of students said that a successful athletic program was “not important” to their decision to attend and “not important” to their college experience. More than two-thirds said they would be willing to scale back athletics if it meant a reduction in the price to attend college.

Kudos to JLARC! Chapter 2 of the study is one of the hardest-hitting state research reports I have ever seen. JLARC staff deserve special credit: Justin Brown, division chief; Walt Smiley, project leader; and Lauren Axselle, Drew Dickinson, Laura Parker and Greg Rest. Let’s see more kick-butt work like this!!

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22 responses to “The Black Hole of College Finances: Athletics”

  1. reed fawell III Avatar
    reed fawell III

    “Kudos to JLARC!” (The Joint Legislative Audit and Review Commission)

    Yes, responsible people doing seriously independent and honest work of the people’s behalf. Thank You.

  2. DJRippert Avatar

    Good for JLARC.

    Now, of course, the information goes to The Imperial Clown Show in Richmond where nothing whatsoever will be done.

  3. come on now… JLARC is not some independent non-govt entity….

    it’s a govt-instituted, govt-financed watchdog agency just like the Auditor of Public Accounts is.

    and BOTH were created by the same Imperial Clown show…


    Without the govt-created JLARC – how much of this would we know right now? How much is known in other states that may not have their own JLARC?

    How much of this kind of data do we get in the U.S. News & World Report ratings?

    Oh- and GOOD JOB Jim Bacon! Jim Bacon SCOOPS – once again – the RTD and even WaPO!

    1. I just heard from my daughter at Eastern Carolina University. ECU has student activity fees, indebtedness fees and special fees. They total $803 per semester. Transparency is the first step.

  4. FYI – from Waldo Jaquith’s wonderful Virginia Decoded – ( the human usable version of the Virginia Code) :

    § 30-56 Joint Legislative Audit and Review Commission; composition; terms; compensation and expenses; office space; quorum; voting on recommendations.

    This law has been modified 3 times since it was first created in 1973. Those modifications are cataloged by “The Acts of Assembly,” a state publication, by year and chapter. Those modifications that can be read on the General Assembly’s website will be linked accordingly. Those modifications are as follows: in 1979, chapter 316; in 1988, chapter 172; in 2004, chapter 1000.

    so there you have it DJ – direct from the Clown Show to you!

    question to Jim Bacon -others – these are called Student Activity Fees?

    Last time I was familiar with them – I was told they paid for the Student Union, some student services – like clinic, intramural sports, etc.

    I had no idea they were or are being used to pay for NCAA sports programs.

    so I will ask the question – as ugly as it might be. Will the Universities claim that Federal Law Title IX requires them to offer women’s NCAA sports and this is how they must pay for it if the men’s programs do not generate enough surplus?

    I regret bringing this up because it does give the anti-govt types fertile ground to plow here… 😉

    1. DJRippert Avatar

      Thomas Jefferson was once governor of Virginia. I imagine he ran a pretty good show.

      1973? Are you kidding me?

      Anyway – JLARC is utterly useless unless the Imperial Clown Show in Richmond acts on the analysis it provides.

      JLARC has done a fine job documenting the absurd cost of college athletics and what a sizable chunk of college costs it embodies.

      Now what?

      If the Virginia public universities wanted to cut athletic costs they could have done so. Instead, they inflated those costs faster than just about anybody else.

      Now what?

      Will The Imperial Clown Show in Richmond take up the fight and demand that public colleges and universities deflate athletic costs?

      How much do you want to bet on that LarryG?

      The data is right there. JLARC did their job.

      Now what?

      Nothing. That’s what.

      1. DJ – what would you know right now without JLARC?

        1. DJRippert Avatar

          What I know is interesting. I agree. However, what would be fascinating would be for the rest of our state government to actually do something with the information. The best $3.3M per year (out of $45B per year) spent in Virginia is spent on JLARC.

    2. DJRippert Avatar

      The crux of Title IX as it applies to athletics is that a university has to provide assistance to as many female athletes as it provides to male athletes. The question of whether the sports teams make money is irrelevant.

      Given that men’s football and basketball make money I guess those sports should be kept. If that generates 70 scholarships then a university must also fund sports programs and scholarships for 70 female athletes.

      If you want to keep football and basketball then you have to pay the Title IX “tax”.

      Maybe you keep women’s basketball and soccer.

      After that, teams only exist to the extent they can generate their own funds.

      Are you really telling me that you expect our state legislature to mandate something like that?

      1. The report talks about Title IX and says it was a contributing factor to the escalation of athletic program costs.

      2. re: ” After that, teams only exist to the extent they can generate their own funds.”

        think about this statement in the context of an Academic Institution.

        what are we doing?

        1. DJRippert Avatar

          I hope that popular intercollegiate sports continue. I think men’s football, men’s basketball and (in some institutions) women’s basketball bind the “regular students” together.

          I’ll even accept Title IX as a point of fairness.

          After that, students should not be required to fund the myriad other sports at any university.

          Women’s field hockey?
          Men’s swimming and diving?

          Great sports but not appropriate as the basis for mandatory fees.

          The students who participate in those sports can pay. Or, the school can seek individual or corporate sponsors.

          I have no objection to college sports. I have an objection to saddling the average student with the cost of sports he or she will never see.

          If a bunch of students and boosters get together and fund the Virginia Tech rugby team – good for them! Just don’t mandate funds from typical students.

          1. well DJ makes perfect sense – but who decides when to pay for capital facilities – and who pays?

            I think what this points out is that sans a rule along the lines of what DJ advocates – the University is quite susceptible to be “influenced” on the issues – both capital facilities and the programs.

            used to be.. “intramural”.. not NCAA… sports used to be a “part” of the University along with many other things that students would pay a fee for.

            Big time sports – is sought after by the University as a “brand” and they are more than willing to have students pay for it.

            and I just point out – we have similar mindset at the high school level sometimes.

            those stadiums are not modest intramural facilities… and the multiple coaches and their benefits and pensions are not truly a part of the schools curriculum.

            Remember the Titans….

  5. DJ – only 2 colleges in Va result in a requirement to “match” the funding women’s sports. In all the rest – the men’s sports do not pay for themselves either.

    what would you do in those situations where no sports pay for themselves – men and women?

    1. DJRippert Avatar

      Actually, all colleges in Virginia are required to “match” under TitleIX. Under the “Rippert Plan” only UVA and VT would be required to match because only they have profitable teams where you’d need to accommodate a like number of female athletes to keep the profitable clubs in business.

      Where no sports pay for themselves all teams would have to raise funds for their own sports. If the football team was 90% of the way to breakeven, maybe that wouldn’t be too hard. But – if they can’t drum up the funds then they don’t play.

  6. Good luck on that DJ…. I think this goes to show that if VT and UVA can do it – everyone else is duty-bound to try it also.

    While I’d sign on to the DJ “rule” what is a realistic real-world alternative?

    I think this goes to show just how “independent” the colleges and universities truly are. They can and will suck up as much public funds as they can … charge students at the wazoo and thumb their noses at the rest of us.

    I think you should consider re-directing some of your clown-show firepower ….. to these charlatans….

    These Universities types are – in bed – engaged in incestuous misadventures with the clown show…

    you KNOW – without a shadow of a doubt that each University/College KNOWS which GA guys went to what colleges…


  7. ALSO – do we REALLY want the Universities and Colleges to pursue – essentially for-profit sports?

    is that something our higher ed institutions should have on their mission statements? You don’t do that without someone who is a paid state employee – working to pursue that ….

    this is the dark underbelly of big time sports and the question is do we – as citizens – have the proper mindset to demand that our representatives in Richmond – do something to force higher Ed to get themselves out of the big time sports business?

    I bet we don’t. This is really what a lot of people actually want.

  8. It’s outrageous for students to fund intercollegiate athletics because so few students participate. Intercollegiate athletics should be self-supporting, with inter-sport subsidies allowed.

    On the other hand, I think it’s reasonable to fund intermural or club-style sports that can be enjoyed by all students from fees paid by students. Recreation and physical exercise are important activities for students. An outside activity may be the necessary release for academic tension.

    1. Agreed. There seems to be a consensus among the geeks who comment upon this blog that it is reasonable to charge students fees that enable broad participation in fitness and intermural sports. But charging the general student population so a privileged few can compete in tennis, golf, crew or bowling (yes, there at two bowling teams at Virginia colleges, I believe) — and even money-losing basketball and football programs — is a grave injustice.

      If wealthy alumni want to attend football games, let *them* foot the tab for the football program, not the students, many of whom are racking up student-loan debt in order to attend the college.

  9. You know a funny thing? The State regulates electricity providers in terms of what they can charge. They guarantee them a percent profit on top of their expenses but the companies have to come in front of the SCC to make their case.

    And of course there are those who question these companies donating campaign money and perhaps cultivating a closer relationships than considered appropriate – but at the end of the day – there is a process that seeks to regulate costs vs profits.

    why can’t some kind of process be set up for higher ED that puts strings on state support including some major ones in the area of student fees?

    If we can do this with the price of electricity why not the price of higher Ed?

  10. john davis Avatar

    The State Council of Higher Education for Virginia offers some excellent reports about tuition and fees at our Commonwealth’s colleges and universities. The appendices of the latest report, 2013-14 Tuition And Fees Report provide a bit more breakdown of the Full-Time Undergraduate Mandatory Non-Educational and General Fees. Hope I got the HTML correct.

  11. well… hmmm… if you search that document for “sports” – you get no hits whereas in the JLARC report – you do get ample information about sports role in costs and on page 10 – some precise cost data.

    The Council report shows YOY fee increase, the JLARC – 10 year which is a more accurate trendline.

    To be fair, on page 26 is a breakdown in an easier-to-understand format than the JLARC report and a quick look tells me that debt service and facilities are big components also and it bothers me that GMU does not break out the athletic facilities like VaTech does.

    The numbers seem to concur with the JLARC report. A significant amount of fees are for sports, sports facilities and likely indebtedness for sports facilities.

    I do not think anything particularly nefarious is going on beyond the simple fact that the Universities are providing amenities that make them competitive with the rivals – i.e. big time sports programs – that do impact parents and their kids attraction to one school over another – but they DO pay for it.

    Should we really be shocked? Basically what it boils down to is – do we want Virginia schools to participate in the National University sports game?

    Would the people of Virginia – including parents of prospective students want Va schools to get out of the University Sports arena?

    So you have two excellent reports here – the JLARC and the SCHEV report. Between the two – they do concur on the role of sports in costs. Enough transparency for people to know – and I suspect zero impact from citizens to ask the GA to do anything at all about it.

    This actually is a continuation of what parents want from our high schools and I believe a significant cost component of k-12 school costs also.

    People want amenities. There are plenty of private K-12 schools with bare bones but robust academic programs. The same is true of some Universities – no sports programs but solid academic programs – and lower costs.

    People make choices. Most do not want a basic Toyota Corolla. They want a tricked out higher level model.

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