MuskogeePhoenix.com, Muskogee, OK

June 27, 2011

Football success brings in dollars for other sports

By Chris Day
CNHI

— STILLWATER – College football is king from the Great Plains to the Deep South.

But it’s also big business – the cash cow that props up the less profitable sports at a public or private university.

The University of Texas football program leads the Big 12 in football-generated revenue.

The U.S. Department of Education’s Equity in Athletics Report shows the Longhorns football program generated $93.9 million in 2009. All other UT sports brought in just $22.9 million.

Expenses for the Texas football team were $25.5 million. Expenses for all sports were $43.1 million.

The University of Oklahoma and Texas A&M football programs finished second and third, respectively.

Oklahoma State’s football program generated $32.7 million in revenue against $15.4 million in expenses, according to the survey. The Cowboys finished fourth in the Big 12 in football earnings. OSU’s other sports earned $15.7 million.

“Football is the engine that pulls everything,” Oklahoma State University athletic director Mike Holder said. “The better we do in football the better it is for every sport at Oklahoma State.”

Every football season ticket sold is an investment in Oklahoma State’s entire athletic program – not just football, Holder said.

The Cowboys won 11 games for the first time ever in the 2010-2011 season. The Oklahoma State University athletic department believes that will translate into higher ticket sales and more revenue for every sport at OSU.

Eight of the 10 athletic departments at Big 12 schools are operating in the black. The two Kansas programs – the University of Kansas and Kansas State University – spent more than they made in 2009, the survey showed.

All KU sports generated $35.1 million in revenue, and spent $40.7 million. The football program made $17.8 million and spent $16.2.

Sports at Kansas State generated $25.4 million and spent $25.8 million. The Jayhawks were in the red $366.084, according to the Equity survey results.

More and more universities are finding themselves in the same predicament as the Kansas schools, according to the NCAA Division I Intercollegiate Athletics Programs Report on Revenues and Expense released earlier this month.

The report tracks trends in athletic department spending from 2004 to 2010. The findings show sports revenue starting too stagnant while expenses continue to claim.

The cost of coaches’ salaries and student scholarships are climbing quickest, according to the report.

“… the number of participating athletes remains fairly constant, while the expense per athlete continues to increase, as a result of rising expenses.”

The Oklahoma State University Board of Regents recently approved a 5-percent tuition hike. OSU’s athletic department will have to allocate more money toward scholarship because of the tuition increase.

According to the Equity in Athletics survey, Oklahoma State spent $3.6 million on scholarships in 2009. Salaries for all of OSU’s head and assistant coaches were $11.9 million.

Those costs will increase, also. The regents approved salary increases for football assistant coaches and head coaches and assistants in other sports in 2010 and 2011.

The falling revenues and rising costs have many universities seeking additional revenue streams.

One stream that’s turning to a revenue river at Oklahoma State is student-athlete scholarship endowments.

Three years ago, OSU’s scholarship endowment was $2.3 million. It’s approximately $50 million now. Holder said. The athletic department’s goal is $115 million, which would fund every student-athlete scholarship at Oklahoma State University.

“We’ve gone from dead last in the conference in scholarship endowments … to second in the conference behind Texas A&M,” Holder said.

Student-athlete scholarships give life to every athletic program, Holder said. In the OSU athletic department budget, scholarships account for nearly $4 million.

If endowments can pay for those scholarships, the athletic department can allocate the $4 million in its budget to other areas – including better travel, equipment or coaches’ salaries, Holder said.

“It frees up $4 million that can be used to field better teams,” Holder said.

The OSU athletic department is tapping another revenue stream to improve facilities, Holder said. The operations budget should create championship-caliber teams – not build championship-caliber facilities, Holder said.

“My real fear is to build a first-class facility, and then you don’t have enough revenue to provide what it takes to put a championship-level program into that facility,” Holder said. “That’s what happens to you when you do it all with debt.”

Holder said he is dedicated to improving OSU’s athletic facilities through private donations.

The university’s dream of an athletic village will be a reality one day, Holder said, and it will be built through private donations. A good example is the $16-million Sherman Smith Training Facility. Construction will begin in August. It is being built entirely with donations.