Sizable sums of money flow through local college sports, but only a few programs return a profit.
Missouri State University’s profitable program is men’s basketball. All other 16 sports lose money each year.
“That’s it,” said MSU Athletics Director Kyle Moats. “Football doesn’t make money, women’s basketball doesn’t make money.”
Even the red-hot baseball Bears don’t turn a profit.
MSU is not alone.
In the world of college sports, self-sustainability is the objective, but it’s rare – even in the Power Five conferences. Top-revenue schools Oregon, Alabama and Wisconsin, for instance, take subsidy payments from university operations or student fees, according to a financial table of college sports departments compiled by USA Today.
As a percentage of athletics revenues, the subsidy typically doesn’t amount to much at schools with high-grossing TV contracts. But at midlevel NCAA Division I schools, subsidies represent half or more of program revenues.
Missouri State received $8.97 million in school funds in the 2014-15 academic year – nearly 60 percent of its $15.1 million operating budget. At other Missouri Valley Conference schools, Wichita State’s athletics expenses are subsidized 30 percent by the university and Indiana State’s are over 70 percent, according to the USA Today data.
MSU President Clif Smart has set the school’s subsidy cap at $9 million, Moats said.
“There’s not one school at our level that makes money. Zero,” Moats said of MSU’s peers in the Football Championship Subdivision.
Loss leaders
The numbers beg the question from academia: Is it worth it?
Economically speaking, it’s difficult to argue: Why not cut the programs losing the most money?
But it’s not that easy.
As an NCAA Division I school, MSU must offer at least 14 sports – six men’s, including football, and eight women’s programs. Layer on federal Title IX rules and the public school must meet proportionality standards: The percentage of female students enrolled at MSU has to mirror the percentage of female athletes in the department.
Considering a football team might carry 100 male players, it takes a couple of women’s sports to balance the proportionality scale. For MSU to meet its obligations, the tally rises to 17 sports.
“That’s why there’s women’s crew in places like Arizona,” said Ed Beach, Evangel University’s assistant director of athletics for communications.
Evangel also offers 17 sports programs, including cheer and the two soccer teams added this school year.
Drury University is adding two sports next year in wrestling and bowling – categories not known for generating revenue.
With a $2.9 million operating budget, Drury already offers 19 programs. Athletics Director Mark Fisher said men’s and women’s basketball are closest to breaking even, and that factors in a men’s NCAA Division II title in 2012-13.
“Most of that is being able to charge for tickets,” Fisher said of the fan-base realities in sports such as golf or tennis.
Even Drury’s powerhouse sport of swimming – with over 30 national championships including a run of 10 straight by the men – is a loss leader, economically speaking.
Athletics become an exposure and marketing arm at this level, school officials say.
“It’s a cost of doing business, of having a well-rounded experience for our students,” Fisher said. “We want to be conscientious of our dollars and produce as much revenue as we can, but it’s not the bottom line on whether we have this sport or activity on campus. We know going in, there are certain sports that will not produce a profit.”
In another sense, student athletics do impact the bottom line.
“If we didn’t have these sports, there are certain amounts of students who would not be attending Drury University,” Fisher said.
The philosophy is similar at Evangel.
“Small college athletics is very different, in that you don’t have television contracts, large media contracts and stadiums that generate significant revenue. Athletics can be something that drives enrollment,” Beach said, citing the student spike when Evangel added football in the mid-1970s. “Intercollegiate athletics can bring in enrollment dollars and not necessarily revenue generated from an athletic event.”
The fix
When squeezed, the value that comes out of college sports is a public face and exposure of student athletes.
“Everybody benefits when we’re more successful, maybe indirectly,” MSU’s Moats said.
When more game tickets are sold, he points to the results of more people eating at restaurants, buying gas, shopping for tailgate parties and purchasing merchandise.
“There is certainly value to the success of athletics to the university community and the community overall,” he said.
In the end, athletics revenue is a math game for schools, and the equation typically has three components: ticket sales, sponsorships and contracts for marketing, broadcasting or concessions.
In MSU’s model, there’s a $1.3 million gap in ticket sales the athletics department is working to close.
One item not in MSU’s equation is student fees. Some schools assess a few hundred dollars per student to help cover athletics programming. Similarly budgeted Sam Houston State collects over $7 million in student fees for sports, according to the Southland Conference school’s financials.
Moats said the student-approved Bear Experience and Recreation fee goes to facilities, including the student rec center, and the funds aren’t applied to sports.
With his eye on increasing ticket sales, Moats emphasizes wins on the field.
The largest revenue-to-expense disparity is MSU football, at $2.8 million. The team finished 1-10 this year.
The profitable men’s basketball program netted $250,000 on $2.5 million in annual revenue.
“We’re down with the revenue and we’ve got to get our team more competitive,” Moats said. “That’s what will drive people back. The product has to get better.”
