How Much Is College Football Actually Worth to Universities?

News and views from academia.
Jan. 8 2014 8:02 AM

Skin in the Game

How much is college football worth to universities?

Temple Owls
Temple University is cutting several sports—while planning to raise investment in its football program.

Photo by Rich Schultz/Getty Images

This article originally appeared in Inside Higher Ed.

Last month, Temple University became the latest institution to kill off a sizable number of its Olympic sports programs, citing in part an inability to financially support the teams that don’t bring revenue back into the athletic department.

Athletics Director Kevin Clark broke the news to the roughly 150 affected athletes and nine full-time coaches in a devastating finals-week announcement, telling them that five men’s and two women’s teams would be eliminated as of July 1, 2014.

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“Our student-athletes and coaches are the casualties of Temple University’s overreach in trying to operate an athletic program beyond its facilities and resources, which caused us to be out of compliance with [Title IX],” Temple President Neil Theobald said at a Dec. 10 Board of Trustees meeting.

Clark and Theobald have said that Temple, with its continually rising $44 million athletics budget, simply could not pay for the necessary investments to maintain its women’s softball and rowing teams, and men’s baseball, gymnastics, and outdoor and indoor track and field teams.

"Reducing the number of sports will mean athletics can invest more into the student-athletes, staff and facilities for the remaining Olympic sports, and offer the best possible learning and competitive environment," Clark said in a statement. However, following the announcement, some have accused the university of keeping one sport at the expense of the others, one that stretches athletic departments financially and in terms of Title IX: football.

The football roster has 115 spots. Between the men’s sports being cut, there are 172 spots, and between the women's, 84 spots. The cuts are expected to save about $3 million, or 6 percent of Temple’s athletics budget, annually. According to data submitted to the U.S. Department of Education, Temple breaks even on its $13 million football budget, but additional expenses such as facilities—which are not counted in that sport's individual budget—make football the chief driver of an overall athletics loss of about $7 million a year.

Theobald recently told the New York Times, “I can say unequivocally, that I never considered football in this decision.” And in an op-ed published Dec. 21, he wrote, "In the aftermath of the announcement of these cuts, many have pointed to our football program as the root cause or the obvious solution. They are simply wrong. Any potential savings from reallocating football scholarships to other sports would be more than offset by the resulting loss of television revenue from our conference's new seven-year contract with ESPN and CBS Sports. Football is not the reason for this move." 

But experts say football does not operate in a vacuum. “The expenses to maintain a Division I football team without the offsetting revenue make it challenging if not impossible to generate sufficient revenue to support non-revenue teams,” said Warren K. Zola, executive director of the Office of Corporate and Government Affairs at Boston College’s Carroll School of Management. “Every school needs to make a strategic decision at that point.”

The options: continue supporting football and cut expenses in other sports, or either, drop the football team down a division, or eliminate it altogether. And not all universities opt to stay in the race. Hofstra University, Boston University, and Northeastern University have all cut football while maintaining a broad swath of non-revenue sports.

However, Temple is not unique. At Rutgers University, Robert Morris University, UMass-Amherst, and UC-Berkeley, to name a few, students have watched dozens of Olympic sports get cut while their athletics departments have poured more and more money into sustaining football and men’s basketball. (UMass fired its head football coach this month, with $836,000 remaining on his contract, after a 2-22 record in its first two years in the Football Bowl Subdivision.)

Conference realignment is driven by a desire to gain exposure and revenue primarily through football, hence Temple’s desire to play all sports in the Big East (now the American Athletic Conference). But it also drives expenditures as programs attempt to stay competitive both on the field and off, spending more on everything from travel (in the AAC, to campuses as far as Dallas and Cincinnati) to practice facilities. In 2011, when Temple announced it would join the Big East, the athletics budget jumped from $10 million to $39 million. Since 2010, university subsidies to athletics have doubled.

Temple also pays more than $1 million each year to play home games in the Philadelphia Eagles' stadium, and may opt to construct its own facility seating as many as 45,000 if the team does well in future seasons. (Average attendance this year was 22,472.) That would follow a recent $10 million expansion of the football practice building.

Because it’s football that (theoretically, at least) brings in the dough, it’s easy to see why colleges would, more often than not, opt to keep it and cut other sports. The pursuit of a big-time football program may mean an athletics department is in the red at the end of every fiscal year, colleges say, but it also pays for the sports that aren’t multimillion-dollar enterprises.

The vast majority of institutions consider football an integral part of a wholly intact athletic department, and are willing to support it no matter the budget, said Ellen Staurowsky, a professor of sport management at Drexel University. But most programs also haven’t given serious thought to how the picture might look without football, and how that money might be redirected. “I don’t think there’s been a widespread analysis of what might be gained if you were to reassess this,” Staurowsky said. “Institutions have certain kinds of priorities that they want to invest in, and I think that’s what’s coming through in this decision.”

Temple football already survived a Board of Trustees vote, nearly a decade ago, on whether it should be eliminated. “There is a value statement that is being made relative to the tolerance for debt and the burdens associated with participation,” Staurowsky said.

The contrasting ideas that football pays for everything and that football drags everything down are both misconceptions, but the former more so than the latter, said Joel Maxcy, an associate professor of tourism and hospitality management at Temple. In an accounting sense, it’s true that universities like Temple lose money on football, Maxcy said. But what they gain in exposure, advertising, donations and recruiting likely makes up for it.

“I think they’re probably saying, ‘Well, even if we have a bad year or even if we’re never better than a .500 football team, it’s still a better payoff than investing in other sports,' ” Maxcy said. “They don’t view it as a money-losing operation.”

But if Temple officials—as they have been before—are ultimately hoping to move into an even more lucrative conference, the football team will have to prove its worth, Zola said. Conference members expect each institution to carry its weight when the postseason rolls around; any program that fails to bring in the revenue that comes along with a bowl berth risks being shunned. Temple knows that from experience—the program was actually kicked out of the Big East Conference in 2004 before rejoining it in 2012.

“In general, I think that many institutions hope to generate enough attention and success that they are able to create significant revenues or an invitation into a major football conference,” Zola said, referring to the five Bowl Championship Series conferences in which football actually turns a significant profit, thanks to major television contracts. (The AAC is not one of them.) “The reality is, that is often a long shot.”

Michael Sachs, a Temple kinesiology professor, said university officials are positioning themselves for success. “They’re doing it right, if you will—they’re trying to make as good of a bad situation for the athletes as one could expect,” he said. “It is a business. We are supposedly educating student-athletes, but it’s a big business.”

Temple declined multiple interview requests for this article.

Allie Grasgreen is a student affairs and athletics reporter at Inside Higher Ed. Follow her on Twitter.

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