Less than $1 of every $100 in revenue generated by major college athletic departments at public colleges is directed to academic programs, according to a Chronicle analysis of NCAA financial statements.
Many athletic departments provide millions of dollars in scholarships and academic support for players. But as elite programs have received bigger television payouts and increased licensing revenue, athletics leaders have used almost all of it to cover sports expenses, even though many of those officials argue that new revenue from sports allows them to spend more on academics.
Over the past four years, more than 40 of the 205 Division I athletics programs in The Chronicle’s analysis reported transferring money to their institutions for academic purposes. But at most of those campuses, the money going into academics was less than the amount of student fees and other subsidies the colleges directed to athletics.
Just 10 athletic departments gave more money back to the campus than the departments received in subsidies, according to an examination of the colleges’ financial reports.
Those 10 departments contributed a total of nearly $140 million, or about 4 percent of their revenue, to academic efforts such as library renovations, scholarships for nonathletes, and university leadership programs.
Athletic departments are not required to share their income with the academic side of campus. But several years ago, the National Collegiate Athletic Association began requiring programs to report how much money they transferred to their colleges for nonathletic uses.
The idea, say campus finance officials involved in the change, was for athletic departments to highlight the academic goodwill they were extending at a time when many had come under fire for their lack of ties to education. The move was also designed to counter criticism that athletic departments were sitting on loads of cash.
Of the 10 colleges whose financial documents showed a net contribution to their campus, four were in the Big Ten Conference, four were in the Southeastern Conference, and two were from the Big 12. The money transferred to academics from those 10 programs grew 13.5 percent from 2011, when the NCAA first started tracking such spending, to 2014.
The excess revenue, or profits, generated by those programs grew nearly 500 percent during that time, according to an analysis of the reports, which The Chronicle obtained through public-records requests.
Athletics finance officers say the NCAA reports do not account for certain expenses, which can make programs’ surpluses look larger than they really are. For example, they say, the reports do not require them to include all of their capital expenditures, amounts that can total $5 million or more a year for some programs.
But athletic departments with the means to help different parts of campus have a responsibility to do so, says Gene Smith, athletic director at Ohio State University, whose program reported giving $36 million for academic use between 2011 and 2014. That represented 6 percent of his department’s revenue.
“When you’re at our level, we should be doing that,” he says. “But not as many schools as we all think have that capability.”
Ohio State has experienced big increases in television revenue and steady sales of football tickets, money that only a handful of elite programs can count on.
But Mr. Smith believes that more athletic departments could share money with their campuses if they made it a priority. “It is a behavioral thing,” he says, “that I think some places need to shift.”
How the Money Is Used
The University of Texas at Austin reported transferring the most money of any athletic department back to its university — more than $37 million over the four years, or about 6 percent of its revenue. Together, Texas and Ohio State contributed more than half of the nearly $140 million directed to academics by the 205 colleges The Chronicle reviewed.
Both programs have relied on growth in television revenue to support academic endeavors. Five years ago, UT-Austin formed its own television network in partnership with ESPN. The network guarantees the university between $10 million and $15 million a year through 2031. Half of that money is earmarked for academic activities, says Gregory L. Fenves, president of the Austin campus. The university also receives $1 million in royalties that the athletic department collects from trademark licensing.
Part of that money has gone to support the operations of the Perry-Castañeda Library. It has also been used to establish faculty chairs in various colleges and to pay for art acquisitions and construction costs of an arts building. The athletic department has also given the university more than 20,000 square feet of office and meeting space that it no longer uses, helping the campus avoid millions of dollars in new construction costs.
The transfers to academics have remained consistent — about $8 million to $9 million a year in each of the past four years, according to the Longhorns’ financial records. The athletic department made those payments even in years, such as 2014, when it reported a deficit.
Mr. Fenves believes that such transfers help connect the athletic department to the broader academic community.
“From the point of view of a president,” he says, “I want to make sure that athletics is an integral part of the university and represents our values.”
Ohio State has used its increased revenue in similar ways. Several years ago, when the Thompson Library was in need of renovations, Mr. Smith says he called the university’s president to offer help.
“I said, Boss, we’re getting ready to sign this megadeal with television, let’s think about it,” he says, referring to the Big Ten Network, a television network the Big Ten started in 2007, in partnership with Fox Sports.
Ohio State’s athletic department pledged $1 million per year over nine years to help pay for the library renovations. Money from the Big Ten Network helps cover those payments.
The influx of television revenue has also helped Ohio State support a summer camp for about 700 low-income children. The program, which is run through the College of Social Work, teaches life skills such as conflict resolution and gives kids an opportunity to participate in sports. The athletic department also works with the dental and optometry schools to pay for checkups and screenings for local children.
As athletics revenues have increased in many programs, a handful have reported big bumps in academic spending. The athletic department at the University of Nebraska at Lincoln reported giving nearly $3.7 million in 2014, about six times as much as it did in 2011, according to its NCAA financial statements. That increase happened even as athletics surpluses slightly declined.
In 2011, the athletic department at Purdue University set aside $235,677 for academic projects. In 2014, it reported spending more than $1.7 million. Most of that money — about $1.5 million — was dedicated to a center for student excellence and leadership. The athletic department has committed a total of $12 million to the center.
Next year, the athletic department at the University of Arkansas at Fayetteville plans to more than double its academic contribution, to some $2.25 million. The money will help the university pay down its debt on classroom buildings and provide funding for student government, says Clayton Hamilton, the chief athletics finance officer.
Those funds are crucial in a state whose support for higher education has declined in recent years.
“When we’re able to defray costs for our campus, we demonstrate our commitment to our institution and to enhancing the experience of all students at our university,” says Julie Cromer Peoples, senior associate athletics director for administration and sports programs.
Declining athletics revenue on other campuses contributed to decreases in the amounts that athletics programs shared. In 2009, the athletic department at the University of Tennessee at Knoxville reported giving more than $7 million to academic initiatives. That same year, it pledged $1 million more per year over the next 15 years, saying it would cover graduate assistantships, campus tutoring, and a teaching center for faculty. The money was to come from Tennessee’s share of a 15-year, $3 billion television agreement between ESPN and the Southeastern Conference.
But in 2012, facing a $4 million athletics budget shortfall, athletics officials said they would stop financing new scholarships and other academic programs for the next three years. A spokesman for Tennessee’s athletic department would not say if it planned to resume the payments this year.
Accounting Tricks
Some athletics programs that report giving money for academic efforts do not actually do so, says Daniel Fulks, an emeritus accounting professor at the University of Kentucky, who has helped the NCAA analyze financial statements for nearly 30 years.
The athletic department at Florida Atlantic University recently reported transferring more than $1 million to the university for nonathletic purposes. But when The Chronicle asked what the money was used for, athletic department officials said it went to cover a debt payment for the football stadium.
Several years ago, Mr. Fulks says, one elite athletic department agreed to help its university pay for a new library. The university took out bonds to cover the cost, and the athletic department claimed in published reports that it was making the bond payments.
But to allow that to happen, Mr. Fulks says, the university had to start paying the athletic department’s utility expenses, as well as maintenance costs the department had been covering.
“It’s great publicity when they say they’re giving money back,” Mr. Fulks says. “But not if you’re just taking it out of one pocket and putting it in another.”
Brad Wolverton is a senior writer who covers college sports. Follow him on Facebook and Twitter @bradwolverton, or email him at brad.wolverton@chronicle.com.
