New big-time sports data shows increasing losses for universities

USA Today has the latest data here:

Total revenue for the 50 public schools in the Power Five conferences rose by $304 million in 2015, but spending rose by $332 million from the year before, according to a USA TODAY Sports analysis of financial information that schools annually report to the NCAA. At the 178 public schools in Division I conferences outside the Power Five, revenue increased by $199 million, but spending rose by $218 million. Revenues in college sports are rising, and have been for decades, thanks largely to TV rights fees for football and men’s basketball. But expenses are rising even more: Athletics departments typically spend more money than they generate. By the NCAA’s reckoning, fewer than two dozen public schools can cover their annual operating expenses without money from university coffers, government sources or student fees.

The actual numbers are far worse. Universities are notorious for under-reporting the true cost of sports, such as the rapes and subsequent lawsuits, and expenses like the $2.4M UO’s students pay to run the athlete-only Jock Box. The very well paid president of the non-profit NCAA does Orwell proud by ignoring all these costs to focus on the ephemeral benefits, using the same talking points that we’ve heard from so many Duck boosters over the years:

NCAA president Mark Emmert says the very fact that so few athletics programs are self-sufficient demonstrates their worth in terms of building community and providing opportunity.

“A very small number of the 1,100 (NCAA members) have a positive cash flow on college sports, so those schools are making a decision that having a successful athletic program is valuable to them despite the fact they have to subsidize it with institutional money,” Emmert says.

I’m no sports economist, but they think the downside risk is large:

Zimbalist says this kind of spending is not sustainable, and he thinks litigation of some stripe — courts deciding players can be paid beyond their scholarships, for instance — could cause the bubble to burst. Among the other potential wildcards are an ongoing lawsuit pertaining to athlete compensation limits that seeks hundreds of millions in damages, concussion lawsuits, or a change in the National Labor Relations Board’s position on college athletes unionizing.

“There are big-time things leading it to pop,” says Zimbalist, a professor of economics at Smith College and author of Unpaid Professionals: Commercialization and Conflict in Big-Time College Sports. “It’s an unstable situation.”

And these risks are guaranteed by the universities’ full faith and credit, at no cost to the athletic side.