Thanks to college athletics, the ACC, Big 12, Pac-12, Big Ten and SEC combined revenue is now billions of dollars.
Reporter Paula Lavigne investigates the effect this increased revenue has on colleges racing to keep up on this Sunday’s Outside the Lines (9 a.m. ET on ESPN2).
“It’s been pretty amazing what some schools have done with their money,” said Lavigne. “They spend a ton on salaries and on adding staff to their athletic departments, but it’s the amenities for student athletes that get the most attention.”
In order to see how the other colleges and universities were being affected, Lavigne talked to athletic directors and financial analysts.
“I sought out people who had studied college athletic department finances in the past and who were familiar with the data on revenues and expenses over time,” she said. “I interviewed a few athletic directors at a group of five schools who talked about the challenges of trying to keep up amid the college sports arms race. They defended how much money they received from the university, student fees, etc., because they felt the school got a lot in return. Some of their programs fared better than others financially.”
– Paula Lavigne
The analysis wasn’t something completed overnight.
“This story was based on years of data we collected on revenues and expenses at Division I Football Bowl Subdivision schools,” she said. “We requested the records, entered a lot of data and then crunched the numbers to find out what was happening over time. There were a lot of anecdotes out there about the divide between the haves and have-nots in the FBS, but until we analyzed the data we didn’t realize how big the gulf had grown and which programs were really relying heavily on subsidized revenue.”
Lavigne said the programs relying on subsidized revenues are obtaining it from student pockets and she hopes this story will raise even more concerns about the issue.
“I think students – and parents – are caring more and more about this issue because they’re the ones paying for it through higher student fees. And it’s a double whammy for them now because they’re also facing higher tuition,” said Lavigne.
She compares the overspending to the “housing bubble” of a few years ago:
“You have all these people spending beyond their means on their own homes to keep up with the Joneses. Then one day, they can’t borrow anymore and they can’t make their house payments, so they lose their home. The bubble bursts, and they’re forced to rein it in. There are a lot of colleges trying to keep up with the Joneses when it comes to athletics, and the pattern is very similar.”