Current FBS system is unsustainable

bearsfan_51 · 05-15-2012, 01:31 PM

USA Today released their annual spending and revenue report for all FBS and FCS public schools. If you're a junkie for the business side of college sports like I am, this is great news.

http://www.usatoday.com/sports/colle...ase/54955804/1

If you look at the numbers, it's pretty clear that with the increasing revenue coming from major TV contracts, non-BCS leagues are being left in the dust. The biggest number to look at is the subsidy %. That's how much of an athletic department's revenue is generated from things like student fees, because they can't operate financially on their own. People often get the impression that college athletics is a revenue generator for most colleges, but that's really only true at the absolute top level, and even then it's only through ancillary benefits like community involvement and increased alumni donations.

Put simply, if your school is operating at over 25% school subsidies, it's not on a sustainable path into the future, given the increasing budget shortfalls at most colleges. If you look at the #s posted, there isn't a single non-BCS school without at least that 25% subsidy, and many non-BCS schools are at numbers well over 50%. The only BCS conference with any substantial school subsidies are from the Big East (not surprisingly). All Big Ten schools are operating at under 10%.

What this means is that there are increasingly fewer options for non-BCS schools to be legitimately competitive. You can't ask for greater subsidies if you are already being funded so heavily from your schools, and a conference like the Sun Belt is never going to be legitimately competitive if their revenue is 10% of schools in the Big Ten and the SEC.

And, these numbers are from 2006-2011, before many of these major TV contracts have gone into effect.

bearsfan_51 · 05-15-2012, 01:36 PM

Another thing these numbers say to me (again, not surprisingly) is what a weak crop of schools the Big East has added.

San Diego State- 45 mil (40% subsidy)
Central Florida- 43 mil (50% subsidy)
Memphis- 40 mil (38% subsidy)
Boise State- 38 mil (28% subsidy)
Houston- 35 mil (58% subsidy)

SMU and Temple are private, but I doubt it's any better.

Those numbers aren't honestly much worse than what Cincy, Rutgers, UCONN, and USF pull, but it clearly underlines what a considerably worse position the Big East is in than the other 5 BCS conferences.

Santonio10 · 05-15-2012, 02:54 PM

Thanks for posting this. This is interesting. The only sports that generate revenue for any schools are division 1A football and basketball. As you have pointed out, only the very top schools in each sport actually make any money, which supports all other sports.

College sports (all levels) seem to be more of a selling point to get students to go to their schools, because the vast majority of schools are making loses on these programs.

I don't think college sports in general are in any immediate danger, but it makes me wonder how long a system like this is sustainable.

bearsfan_51 · 05-15-2012, 02:57 PM

Yeah. That's the typical line that a lot of FCS schools will give (gets students to notice the campus).

I have no idea of knowing whether it's true or not, but it seems really odd to me, considering that most students at an FCS school don't attend the sporting events anyway.

I guess there are enough low-information college students who are only aware of universities if they play sports on TV, but that's pretty sad if true.

JoeJoeBrown · 05-15-2012, 03:26 PM

Good stuff, BF.

You pretty much have to view sports as a marketing tool for schools. It's a lot of "free" advertising to have your school mentioned on sports TV, sports websites, magazines, and newspapers every week. To reproduce the volume for a moderately successful sports team would be very expensive for a school to attempt.

I have no idea what the ROI is, but I'm sure the pain isn't as bad as these numbers imply when taken directly with no marketing impact taken into account.

For instance, Duke is a great school. But there are quite a few very good/great schools and their marketing reach is usually only regional if they are smaller. That basketball program puts it in the national spotlight, letting everyone around the country know that Duke is indeed a great school, which makes it more competitive to get in with more applicants coming in from around the nation/world.

bearsfan_51 · 05-15-2012, 05:33 PM

Sure, but we're not talking about Duke.

We're talking about schools like Western Illinois (FCS) and Middle Tennessee State (FBS). My guess is that the students are simply unaware that they are paying so much in sports fees (because most students don't look at their itemized tuition bills anyway.

Maybe there is a sufficient marketing bump from being FBS to FCS, or FCS to Div II, but I bet except for sports fanatics, most people couldn't name 1/4 of the FCS schools in the country, even those in their own state.

WCH · 05-15-2012, 06:29 PM

I went to Eastern Michigan, and their football program is a MAC bottom-feeder. The school is less than 10 miles from University of Michigan, and if you're driving down Washtenaw Avenue, you can't even tell where Ann Arbor ends and Ypsilanti begins. The sports fans were all Michigan fans and nobody went to the EMU games. The student newspaper even begged students to show up to the games, but even with free tickets, nobody went. Attendance was so low for a while, that there was talk of kicking them out of the FBS altogether.

Granted, there aren't very many D-I schools who have the disadvantage of being in the same town as a national powerhouse, but the EMU athletic department is far from being free marketing.

JoeJoeBrown · 05-15-2012, 10:32 PM

Quote:

Originally Posted by bearsfan_51

Sure, but we're not talking about Duke.

We're talking about schools like Western Illinois (FCS) and Middle Tennessee State (FBS). My guess is that the students are simply unaware that they are paying so much in sports fees (because most students don't look at their itemized tuition bills anyway.

Maybe there is a sufficient marketing bump from being FBS to FCS, or FCS to Div II, but I bet except for sports fanatics, most people couldn't name 1/4 of the FCS schools in the country, even those in their own state.

Good points. I was just trying to be a devil's advocate.

andyjo672 · 05-16-2012, 06:40 AM

Quote:

Originally Posted by JoeJoeBrown

Good stuff, BF.

You pretty much have to view sports as a marketing tool for schools. It's a lot of "free" advertising to have your school mentioned on sports TV, sports websites, magazines, and newspapers every week. To reproduce the volume for a moderately successful sports team would be very expensive for a school to attempt.

I have no idea what the ROI is, but I'm sure the pain isn't as bad as these numbers imply when taken directly with no marketing impact taken into account.

For instance, Duke is a great school. But there are quite a few very good/great schools and their marketing reach is usually only regional if they are smaller. That basketball program puts it in the national spotlight, letting everyone around the country know that Duke is indeed a great school, which makes it more competitive to get in with more applicants coming in from around the nation/world.

Duke doesn't need their basketball program to put it on the national map. Students that apply/get in/go to Duke would know about Duke regardless of their basketball program because their academics are held in such high regard. No student cares about Yale's, Princeton's, MIT's athletic programs when they apply. The same would hold true about Duke.

Iamcanadian · 05-17-2012, 07:50 PM

Sorry, but these #'s are a bit screwed. College football generates a heck of a lot of income that is unseen in these figures. Donations by alumni at major schools is quite substantial and the figures bear out the assumption that football brings in many millions of dollars that otherwise would go elsewhere if football wasn't played at Div 1 schools.
Oklahoma St. recently received somewhere in the neighborhood of 300 million from 1 donor, that goes a long way toward the cost of subsidizing a football program and makes it mandatory that a school remain with a DIV 1 program.
Looking at revenue produced by football alone simply doesn't tell the true tale of why schools remain fully committed to playing football. Believe me, if the colleges really had to subsidize the football program, you would have seen numerous colleges give up the game long ago. Colleges fully realize that their alumni donations to their schools, is closely tied to their football programs and that is why, you aren't hearing a whole lot about the subsidizing problem.
I wouldn't look for any major changes anytime soon.

bearsfan_51 · 05-17-2012, 08:17 PM

Quote:

Originally Posted by Iamcanadian

Sorry, but these #'s are a bit screwed. College football generates a heck of a lot of income that is unseen in these figures. Donations by alumni at major schools is quite substantial and the figures bear out the assumption that football brings in many millions of dollars that otherwise would go elsewhere if football wasn't played at Div 1 schools.

Yeah, I already said that.

Also, Oklahoma State isn't a mid-major or FCS program, so that example is misplaced.