The Money Bowl

The real competition in big-time college sports is over who can spend the most.

A few years ago, Toledo athletics, facing a budget shortfall of $1 million annually, went into turnaround mode, says Fronk. After a thorough review of its finances, the department decided to eliminate three sports: men’s swimming and men’s indoor and outdoor track and field. The move would ease budget pressures and help the school comply with Title IX, a government mandate to provide gender equality in athletics. “It was like giving up three of your children,” recalls Fronk. To avoid having to make further cuts, she says the department operates as lean as it can. Fronk negotiates room rates with hotels and even pushes for discounts on meals when teams are on the road.

Fronk says she would like to see more-equitable revenue sharing to level the playing field for the haves and the have-nots. “Those of us have-nots say that we could do so much with that $1 million the others are blowing.”

For its part, the NCAA says there’s not enough data to tell whether there is a spending race in college sports, according to CFO Jim Isch. But he admits there is evidence of a growing gap between the haves and have-nots. “We’re monitoring it and collecting more data before we make any changes,” says Isch. The NCAA does share a portion of its $6 billion television contract with CBS to televise the March basketball tournament with all schools, even those that don’t make the field of 64, but the cut isn’t very high. Fronk would like to see mechanisms where rich athletic departments would share more of the spoils with the have-nots.

That scenario is unlikely to become reality, though. Explains Transylvania’s Fulks: “The people in a position to change things are the ones that are benefiting the most from the way it works now.”

Joseph McCafferty is departments editor at CFO.

Unaccountable

Muddled accounting makes comparing finances in college sports nearly impossible.

Universities readily admit that they monitor athletic spending at their peers. After all, you have to know what the Joneses are doing in order to keep up with them. The trouble is, obtaining a clear view of a rival’s finances can be all but impossible.

The National Collegiate Athletic Association (NCAA) requires all schools to submit detailed financial information, but it doesn’t release that information to the public or share it with other schools. Instead, it releases aggregated revenue and spending data, organized by conference. Universities are also required by the Equity in Athletics Disclosure Act (EADA) — part of the Title IX gender equality in athletics law — to disclose some financial data to the public. But the EADA requirements (as well as the NCAA’s) have few standardized accounting rules. The result makes comparisons among universities very difficult.

“Those numbers can be very misleading,” says Eric Ziady, associate athletic director for business operations at Boston College. He says that schools compute their figures differently. For example, some include capital expenditures and debt servicing in the reports; others don’t. Some include the cost to manage sports facilities — expenses such as security and maintenance — while others carry those expenses on their general books. “Things included or excluded in gross numbers can sway budgets by tens of millions of dollars,” says Ziady.

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