As Clemson rumbles into Monday’s College Football Playoff Championship Game, the cheers of adoring fans will be surpassed only by the cha-ching of cash as the Tigers bring in additional revenue through TV rights fees, merchandise sales and increased donations.
It’s a good thing.
Despite its success — or perhaps because of it — Clemson is one of many college athletics programs losing money.
That’s right, the Tigers’ athletics department outspent its $70.4 million budget last year, as it has every year for at least a decade.
Clemson is not alone. More than half of the 48 schools in the “Power Five” conferences lose money, often even while taxing students with activity fees. Revenue, which has nearly doubled in the past decade, cannot keep pace.
The reasons are many, but a lack of accountability in an era when schools compete with facilities and staff as much as academics is at least partly to blame.
“College sports is big business, and it’s a very poorly run big business,” David Ridpath, a business professor at Ohio University, told the Washington Post, which conducted an analysis of NCAA filings by member institutions.
Ridpath is also a board member for the Drake Group, a nonprofit advocating for an overhaul of commercialized college sports.
“It’s frustrating to see universities, especially public ones, pleading poverty … and it is morally wrong for schools bringing in millions extra on athletics to continue to charge students and academics to support programs that, with a little bit of fiscal sense, could turn profits or at least break even,” Ridpath said.
Student fees — additional charges above tuition to help support athletic programs — brought in $114 million alone in 2014.
Still, programs like Clemson cannot break even.
On the opposite sideline in the championship game stands Alabama, an example in the other direction. The Crimson Tide finished in the black financially, but with a budget twice that of Clemson at $147.2 million.
How much money is that? It equals the amount that St. Louis proposes for a new NFL stadium. And voters there are expected to turn that down as too high.
While the relative amounts may differ, two factors are common among Power Five schools — the budgets of athletics departments are expanding exponentially, and most still outspend what they take in.
A decade ago, two universities had annual athletics department budgets of more than $100 million — Ohio State and Texas. Now there are 17, as average revenue has grown and ADs have found more ways to spend it.
In the Big Ten, Michigan, Ohio State, Iowa, Wisconsin, Minnesota and Michigan State all break the nine-figure mark. The latter three, however, still lose money on their athletics programs.
The outstanding fact is that, while income has skyrocketed, so has spending.
Wisconsin, for instance, brings in $122 million annually and cannot pay all its bills. In the past decade, annual maintenance and spending on facilities went from $10.5 million to $38.2 million.
(Indiana’s budget is $84.7 million and in the black; Purdue loses money despite its $71.3 million budget.)
Rising administrative and support staff pay is one of the biggest reasons otherwise profitable or self-sufficient athletics departments run deficits, according to the Post analysis. In a decade, the non-coaching payrolls at the schools, combined, rose from $454 million to $767 million, a 69 percent jump.
At Clemson, for instance, the football coach’s chief of staff — his official title is “associate athletic director of football administration” — makes $252,000, a salary that exceeds what some athletics directors at big colleges made a decade ago. The non-coaching staff payroll has increased 417 percent in the past decade.
Michigan’s athletics staff has doubled in the past decade to 259 full-time employees and a payroll of $27.7 million. Thirty four staffers make at least $100,000 a year.
“Money goes into the system; it has to go places,” IU athletics director Fred Glass told the Post. “More money in the system is creating a market for these people.”
Indiana is one of the few schools to eliminate staff positions — 10 in the past five years.
That is not the trend, and as athletic departments battle for supremacy on the playing field, budgets are almost certain to continue to rise.
As the cash registers ring with the national championship game, don’t fret over what the nation’s top college programs will do.
Trust me, they will find a way to spend it. And more.
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Arms race
Revenues have shot up over the past decade, but many major college athletics programs still report losing money.
School;2004 revenue($M);2014 revenue;($M) Profitable?
Alabama;$73.0;$147.2;Yes
Clemson;$49.0;$70.4;No
Oregon;$48.7;$193.8;Yes
Texas;$100.6;$161.0;Yes
UCLA;$50.2;$83.7;No
Ohio State;$130.2;$145.2;Yes
Michigan;$86.4;$157.9;Yes
Michigan State;$70.8;$104.3;No
Wisconsin;$68.2;$122.8;No
Indiana;$47.6;$84.7;Yes
Purdue;$54.8;$71.3;No
SOURCE: NCAA data as compiled by Washington Post
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