OT: Athletic Departments that lose money - UAB may eliminate football

Submitted by Spontaneous Co… on

http://www.cbssports.com/collegefootball/writer/jon-solomon/24839675/uab-football-isnt-alone-in-losing-money-for-athletic-departments

The link above (if it works correctly) contains details about Division 1 athletic departments that lose money and suggests that UAB may be the first NCAA Division 1 football program to disband since 1995.  Although the fact that many athletic departments operate at a loss is no surprise, I was surprised to see schools like UNLV and Cincinnati on the list.

Also, while UAB is no football power, they are no doormat either.  If they abandon football, you have to wonder how many others will follow, especially if rule changes permit the Power 5 schools to provide additional benefits.

JFW

November 25th, 2014 at 8:00 PM ^

The amount of collegiate wrestling programs is a fraction of what it once was. Kids who used to be able to get partial scholarships at smaller schools lost that when schools eliminated those programs.



I'm betting if a bunch of smaller collegiate football programs went that way, you'd lose opportunities in a similar way for those football players who can't play up a division. That would be too bad, because slot of the guys I knew who played college ball or who wrestled did it at smaller schools, and they were truly student athletes. They had to be if they wanted a job after college.

Gulogulo37

November 25th, 2014 at 8:11 PM ^

If I was a student of one of those schools, with the loan debts I already have and the fees I'd be paying, I'd be pissed if they didn't cut football when it's operating in the red. It's not small change either. EMU has 22 million in debt and 23,000 students. If you think of each student paying 1,000 bucks to get rid of that debt, maybe the football program needs to look at the big picture and see it's not all about them.

These schools are losing money because of the arms race in college football and trying to become a school that makes a big profit, not because they're spending so much money helping poor kids play football. EMU could move down to D-2 and still have a football team without as much expense and they would still have the same number of fans: 0.

Qmatic

November 25th, 2014 at 1:18 PM ^

It's crazy seeing a school like UCF who has become a stable program (hell they won the fiesta bowl last year) be in the red as much as they are.

Brodie

November 25th, 2014 at 1:34 PM ^

the cost of becoming a stable program like UCF has is high... they have to pay for a guy like George O'Leary, they have to pay for facilities like their totally new stadium, they have to pay to be in a stupidly structured conference like the AAC. The goal for programs like UCF, USF and Cincinnati (all on the list, all fairly reputable football schools in the past decade) is to get into the Big 12 by any means neccessary. And for all three that means spending over and above what is actually needed for what are, in effect, commuter schools. 

WolvinLA2

November 25th, 2014 at 7:49 PM ^

You're exactly right that the goal needs to be getting into a real conference.  Because being good at football by itself, unless you're really good, doesn't make a huge impact on how much money you make.  It's all about TV, and if you aren't in a conference with a major TV contract, you won't make shit.  

UCF might be way better than Indiana or Purdue at football, but those schools crush them in revenue simply by being in the Big Ten.  

Brodie

November 25th, 2014 at 1:19 PM ^

I feel bad for the football fans in Birmingham... over the course of 25 years they've gone from having ALL of Alabama's home games (and many of Auburn's) to having just the Iron Bowl to having just UAB and now they will be left nothing except a fourth tier bowl game and memories.

Brodie

November 25th, 2014 at 2:20 PM ^

they did in 1987 and it hosted roughly half their home schedule every single year well into the 90's... they seemed to alternate between playing more home games in Legion Field or Tuscaloosa from season to season but Birmingham certainly hosted all of their major games as well as Auburn's.

MaizeJacket

November 25th, 2014 at 1:57 PM ^

The City of Birmingham has no one to blame but themselves.  They haven't renovated or even maintained Legion Field hardly at all.  It's the oldest- and most run-down-looking stadium I've seen except for maybe Tropicana Field.  I went to to B'ham for the Magic City Classic this year and you can't help but see notice how poor of shape it's in.  That's one reason why football in the city of Birmingham has become infrequent.  Tuscaloosa really isn't that far from Birmingham anyway, which is where everyone is on an Alabama gameday.

Bill in Birmingham

November 25th, 2014 at 2:28 PM ^

Partly true, but not entirely. Bama significantly upgraded its on-campus facilities and was going to take advantage of it. When Pat Dye moved the former Iron Bowl to Auburn, Alabama did the same. After that there was no cash cow to make the improvements make a lot of economic sense. But you're right, the city has let it become a complete dump.

lhglrkwg

November 25th, 2014 at 1:29 PM ^

I know for UB (Buffalo), they are determined - no matter how impossible the task seems - to be relevant in football because they see it as a big boost for attracting students and presumably boosting the universities profile. I'd wonder how many of these schools are reasonably happy to eat these AD deficits because they see it as a net gain with enrollment (tuition) and academic profile gains

Leatherstocking Blue

November 25th, 2014 at 1:52 PM ^

I seem to remember reading that tax payers in Connecticut were bent out of shape when they had to pay for the unsold tickets to UConn's bowl game a few years back. Running a $19 million deficit should cause more outrage. If they hadn't just built a stadium, I could see them dropping football, too.

maizenbluenc

November 25th, 2014 at 1:57 PM ^

How will recruiting be different for these guys in a Power 5 world, unless the Power 5 decide to allow more than 85 scholarships? I'm not getting how the Power 5 offering more benefits, impacts the non-Power 5 in football - the same number of recruits not signed with Power 5 schools will be available.

I think Power 5 impacts basketball more - same number of recruits limits yeah, but now there are many non-Power 5 basketball powerhouses that a top recruit would consider over a Power 5 school - that equation may change.

Spontaneous Co…

November 25th, 2014 at 3:03 PM ^

I see your point.  The kids that play for those schools will still play for those schools because the available slots at Power 5 schools will all be taken.  And you are absolutely right about basketball.  But I suspect there are a number of recruits each year who choose a Cincy or UNLV or UCF who did have some Power 5 offers.  Rule changes that permit schools to offer more benefits could still affect the non-profitable programs in those instances.

Also, I was thinking in more general terms.  Let's assume you operate an FBS program and you want to be competitive with the Oregons and Ohio States of the world.  If you are UNLV, you already have an uphill battle.  But now you need more money for football because new rules permit more benefits.  I don't think there is any doubt that this situation you are in makes it even more difficult to get additional funding to accomplish your objective.  If you are perpetually in a position where you are spending gobs of money on something that you cannot suceed at, then I can see the likely outcome being a decision to dump football and either save the money or invest it elsewhere.  If you have no desire to compete with the big boys then you are right, it probably won't matter.

Wolverine Devotee

November 25th, 2014 at 2:03 PM ^

*FBS program. There have beeen FCS schools that have dropped recently like Hofstra and Northeastern.

DoubleB

November 25th, 2014 at 7:36 PM ^

case study. 25 years ago they were a good D-III program. They decided to go more big time and ended up dropping a generation later. 

I get Northeastern dropping football. Tough location for football and they wanted to put the extra money in hockey. Similar to St. Mary's (CA) some 10 years ago.

Rule changes over the course of decades forced a lot of Northeastern schools that had good basketball programs to have D-I football as well (a few sports and teams were grandfathered in--Hopkins lax for instance). Canisius, Niagara, Iona, St. John's--all these schools had small school type football and ended up having to drop because of the cost and the fact football couldn't play at a lower level (with less expenses).

I Like Burgers

November 25th, 2014 at 2:03 PM ^

There's a lot more to this than profitability.  Bear Brynat's son Paul "Little Bear" Bryant has tried to run UAB into the ground for years.  Intentionally.  He sits on the UAB board of trustees and has made several moves over the year to hurt UAB.  For instance, he blocked UAB from hiring Jimbo Fisher back in 2006 because he felt that would hurt Alabama's chances of hiring Saban.

Little Bear has held a grudge against AUB for a long time and wants Alabama to be the only program in the state.  He turns 70 in Feb, and a state law won't allow him to be on the board beyond that.  So dismantling the UAB program would be the fullfillment of a lifelong quest.

MI Expat NY

November 25th, 2014 at 2:16 PM ^

He actually sits on the UA Board which oversees UAB and UAT.  The Board also recently killed an on-campus stadium proposal which would have gotten UAB out of the decrepit and monstorously sized Legion Field and into a staidum that better fit UAB's needs.  

It is a really strange situation that the Bama folks view UAB as a threat.  It's not like UAB has ever been good.  

Brodie

November 25th, 2014 at 2:28 PM ^

you have to understand that UAB isn't a normal branch campus like UM-Flint or UCLA... it was created more or less to keep black students out of Tuscaloosa after the end of segregation. Nowadays I'd imagine the fear is that people from Birmingham would be less likely to financially support Alabama if they had a real football program in their backyard, but the relationship there is kind of gross and insidious

lhglrkwg

November 25th, 2014 at 4:28 PM ^

Very strange that Alabama feels theatened by UAB. This is like Michigan blocking CMU (if CMU was a M cmapus) from hiring Dan Enos or something. I'd respond with "You seriously feel threatened by CMU? You're Michigan" I say the same thing to Bama. UAB couldn't touch them in a million years

OxfordBlue24

November 25th, 2014 at 2:15 PM ^

I think a lot of the schools on this list, besides some of the bigger names like UC, UCF, have trouble drawing in fans for games which is likely one of the main reasons for the deficit. Hard to be prominent and run a big time program when people at your school are bigger fans of other teams. I wouldn't mind seeing some type of split between power five and non power five teams. This way, the non power five teams could actually have something more to play for each year besides a conference championship and a dinky bowl game. I'm using Miami (NTM) as an a example, but you might also see students and alumni caring more about their school when they aren't competing in the same division as say, OSU. Teams could still jump up to the power five level just like FCS schools can jump up to FBS, but it would make the level of play more competitive overall, and athletic departments could stop worrying about trying to compete with larger, premiere programs. This hopefully would allow them to operate closer to the green, while fielding an overall more competitive, enjoyable product.



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M-Dog

November 25th, 2014 at 7:48 PM ^

That model works for the Ivy league.  They are never going to be big time, so they don't try.  But they have their own level of passion and something to play for within their own bubble.

It's like college fooball itself.  It's not the best football in the country, that belongs to the NFL.  But CFB is its own self-contained world that does not care what goes on in the NFL

LSAClassOf2000

November 25th, 2014 at 2:28 PM ^

Four other public universities currently in Conference USA had higher subsidy rates: Florida International (78 percent), Old Dominion (73 percent), Middle Tennessee (71 percent) and Florida Atlantic (68 percent). Those with lower rates: North Texas (61 percent), Texas-San Antonio (61 percent), Western Kentucky (60 percent), Marshall (52 percent), UTEP (51 percent), Louisiana Tech (50 percent) and Southern Mississippi (43 percent).

That's pretty striking really. Actually, per this summary - HERE - using USA Today's latest numbers (revenue minus expenses and subsidies), there are only 20 programs currently in the black out of the over 200 listed here. Among the profitable Big Ten programs are Michigan, Ohio State, MSU, Indiana and Nebraska. 

funkywolve

November 25th, 2014 at 3:03 PM ^

I'm guessing the costs of the football program at a D1 school are massive.  When you start adding up scholarships, coaching salarys, equipment, recruiting trips, flying/busing and housing a team for an away game, and all the other small items that seem like penny's but add up, the cost has to be enormous. 

Without looking at the list I'm guessing those 20 are pretty much the blue bloods and teams that sell 75K tickets to every home game.

jmblue

November 25th, 2014 at 4:01 PM ^

Only seven of the 230 listed public schools are shown as having taken no subsidy money in 2013 (LSU, Nebraska, Ohio State, Oklahoma, Penn State, Purdue, Texas), and only four others are listed below $1 million (Iowa, Kentucky, Michigan, Texas A&M).

We took a subsidy?  What would this be for, and why?

 

gwkrlghl

November 25th, 2014 at 7:57 PM ^

Here's what was going on in 2012. Probably something similar now:

LSU, Nebraska, Ohio State, Oklahoma, Penn State, Purdue and Texas were the only schools to report no subsidy money in 2012. Michigan reported receiving less than $260,000: $16,000 in federal work study funding and the remainder from the university to cover the salary of academic services director Phil Hughes, according to athletics spokesman Dave Ablauf.

Source

Asgardian

November 25th, 2014 at 2:51 PM ^

As Brian often says, the goal here is not to make money.  For Power 5 schools with big TV contracts, the goal should generally be to win and break even.

In the expenses column it's not just football. Every sport except Football, Basketball, and maybe hockey consistently operates in the red every year. For 2013, Brandon U-M spent ~$40M on scholarships and team expenses BEFORE coaches salaries.  Michigan generally spends its operating surplus on new facilities... of debatable value to fans (particularly for non-revenue sports):

http://www.annarbor.com/news/u-m-athletic-department-budget-fy-2014/

https://record.umich.edu/articles/michigan-athletics-presents-fiscal-ye…

For many of the Group of Five (D I, non-Power 5) schools, this is a business decision for the school.  The football program may lose money, but it is a marketing expense for the college.  

How many students at Big Ten schools not named Michigan and MSU would readily acknowledge CMU, WMU, EMU as "directional Michigan", but would be surprised to learn that there is a Northern Michigan too?  How many would have heard of Bowling Green and Ball State etc. as institutions of higher learning if not for the MAC?

This is known as the Flutie effect (BC), and it happens in basketball too (Butler, FGCU, VCU):

http://www.forbes.com/sites/hbsworkingknowledge/2013/04/29/the-flutie-e…

http://espn.go.com/blog/playbook/dollars/post/_/id/3222/how-fgcus-run-c…

UMgradMSUdad

November 25th, 2014 at 3:33 PM ^

Interesting links. The focus of the Forbes and ESPN articles are the great success stories though.  While even bad records will lead to people hearing about the university, it seems hard to believe that schools like Kansas or Eastern Michigan are getting much benefit from their football programs. The ESPN article references a media firm claiming Butler received "a publicity value of $1.2 billion" due to their 2010-11 runs in the NCAA tournament. Perhaps, but it's a bit trickier to say how much extra money those runs helped bring in to the university, and nobody can claim it comes close to even a tenth of the "publicity value."

I'm actually surprised more schools haven't dropped football.  As the salaries and expenses soar, at some point it would seem prudent for schools, especially the lower level ones, to begin asking if the cost is worth the reward.

 

DoubleB

November 25th, 2014 at 7:41 PM ^

Donors and bigwigs with money want it and will help subsidize the losses. "I won't build that new Science Center if we drop football" etc.

Also D-III programs are growing at a pretty good pace (2 to 4 a year for the past half decade plus and will continue going forward). They see it as a chance to bring in more tuition dollars and increase male enrollment.

M-Dog

November 25th, 2014 at 8:02 PM ^

It does make a difference.  George Mason was able to start more than 15 new building projects after their Final Four run in 2006.  Applications to the university were up soemthing like 40%.

My wife went to Duke and Emory, both very good schools.  But guess who she gives her donation money to?  Duke. Because it's top of mind.  Because of athletics.

It sounds trivial, but you can't have a homecoming weekend without something like football to rally the alumni around.  My wife goes back to Duke regularly.  She's never been back to Emory.

The decision to field a D1 football team when you are Cincinnati or Buffalo is not completely irrational.

SFBlue

November 25th, 2014 at 3:41 PM ^

It is truly unconscionable for schools like CMU, Western, and Eastern to be losing $15m or more a year.  Isn't the reality that the shortfall more or less ends up in student loan debt? 

MonkeyMan

November 25th, 2014 at 7:09 PM ^

taxpayers and student tuitions shouldn't be subsidizing sports- bring tuitions down

I personally think college sports profits will be peaking sometime in the next decade- too many other forms of entertainment are bigger among younger people and as they get older they will become a larger percentage of the potential audience who are not as much into paying for games

The lack of students at Big 10 games isn't a great sign for the future

 

Frieze Memorial

November 25th, 2014 at 10:15 PM ^

Yeah, the whole intercollegiate landscape is going to be very different in the 2020s.  I'm sure it will last longer in the South, but I believe the days of Michigan and OSU raking in millions upon millions of dollars will come to an end someday.

At the risk of sounding like a very old man: many younger people are not interested in being trapped in a stadium watching one sporting event unfold slowly.  And this may very well spell the end of it.

In my day, we had nothing to do on Saturday but go to the stadium!  And we liked it!

Brodie

November 26th, 2014 at 11:19 PM ^

I don't think it's a football issue... young people seem to like the NFL well enough. Rather, I suspect the entire TV model will be radically altered and that along with the results of lawsuits over paying players will bring the NCAA to it's knees. People would subscribe to an NFL Netflix, for lack of a better term... how many people would subscribe to  BTN streaming service realistically?

Tater

November 25th, 2014 at 8:32 PM ^

I recently read that the Bammer trustees wanted to squash the UAB football program long before the de facto "Power Five" divide was created.

ghostofhoke

November 25th, 2014 at 11:34 PM ^

Unfortunately they have terrible situation. There is little fanbase and they play in an awful part of town that nobody wants to go to for games. The gameday experience is a joke. The state school system will never let them build anything that could potentially compete with the flagship. There is absolutely no investment in the program, it's pretty sad.