Singer Darius Rucker—who founded Hootie & the Blowfish at the University of South Carolina back in the day—once said there are two times of year for him: “Football season, and waiting for football season.” In College Station, Texas, that certainly holds true as well. Both fans and the financials back up that sentiment: Almost half of the Texas A&M athletic department’s revenue each year comes from football alone. In 2019, football accounted for 46% of the Aggies’ $212 million in total revenues, according to their most recent NCAA financial filings.
Football isn’t, however, the lone financial force driving collegiate athletic revenues across the country. What football is to Texas A&M, men’s basketball is to other schools like the University of Dayton and Virginia Commonwealth—the main spigot of athletic-department revenue. COVID-19 has clogged that spigot, forcing these mid-major hoops hotbeds, and others like them, to make hard choices on the expense side while facing an uncertain outlook for its usually reliable revenue stream.
At Dayton, the financial pain was particularly ill-timed. Before the pandemic, the Flyers were looking at a potential No. 1 seed and a deep run in the NCAA tournament. None of that materialized, and it’s not clear how much, if any, budgetary ground the program will make up as the new season dawns.
“If you were to take our operating revenue—scholarships [aside] because of the nuance in how people count them—70% of our budget is reliant on men’s basketball,” Dayton AD Neil Sullivan said in an interview. “If you were to take our commercially generated revenue—ticket sales, corporate partnerships, radio, television, et cetera—that number creeps up into the 90% range. We’re in the 99th percentile of reliance on basketball in Division I. There may be no school more reliant on basketball than UD.”
Some $16.3 million of the Flyers’ $35 million in earnings in 2019, or 46%, came from the court—the same proportion of revenue that football brings to Texas A&M. Dayton’s FCS football team, meanwhile, brought in just under $160,000 in revenue, less than 1% of basketball’s total, according to the U.S. Department of Education’s Equity in Athletics data.
The vast majority of Dayton’s commercially generated basketball revenue is tied to tickets at the 8,000-student Ohio school; the $11.5 million in ticket-related revenues comprises one-third of the total athletics earnings.
Basketball has been good to Dayton, because the Flyers attract fans. Dayton’s 13,407-capacity arena, in the final phase of a $75 million renovation, averaged just under full capacity last season. It has been in the NCAA’s Top 35 in attendance for the last 50 years.
The Flyers also stay within their means; with just $7.4 million in expenses, the men’s basketball team costs less than half of what it generated for the school in 2019.
Dayton also operates its own concessions (which Sullivan says generate more than $2 million annually), sells its own corporate partnerships, and brings in substantial philanthropic support, much of which Sullivan attributes to basketball even if it isn’t listed directly as such in the data. Another $100,000 annually comes from hosting March Madness’s First Four play-in round (not counted in financial reports as basketball revenue), which the school has done every year since the tournament expanded to 68 teams and added the preliminary round in 2011. That didn’t happen in 2020, and again won’t in 2021 with the NCAA now planning for a single-site tournament.
Though Dayton managed a 99% renewal rate of its originally planned seat contribution gifts for this year, required as part of season ticket purchasing for seats in the lower level of the arena, that $4.5 million still leaves the school far short of typical ticket-related revenues. As the 2020-21 basketball season tips off, the impact of losing much of that isn’t lost on the Flyers, or any of the other basketball-dependent institutions.
“We have to do what any business does when there’s pressure on revenue, or dramatic decreases on revenue: adjust on the expense side,” Sullivan said. “We’ve done that. Year to date, we’re probably trending around 60% of expenses compared to where we were. We’ll feel that.”
The hope is that it won’t last past this year. “If it can be a season,” he said, “we’ll come out on the other side.”
VCU athletic director Ed McLaughlin shares a similar mentality, acutely aware of his own department’s deep basketball dependence.
Hoops money accounted for a quarter of VCU’s athletics budget in 2019, according to the school’s NCAA financial report. The Rams sit just behind the Flyers in terms of average men’s basketball attendance within the Atlantic 10 Conference, with nearly all of their $2.6 million in departmental ticket sales coming from basketball.
Basketball brings in $4.25 of the department’s $4.7 million in donated dollars, and 73% of licensing and other corporate dollars.
VCU is one of the few basketball-only powerhouses that’s a public university. Its NCAA filings show that while basketball only accounts for about one-fourth of the total athletic department revenue, it makes up just under 63% of the athletic department’s total earned revenue. The Rams are heavily funded by student fees—to the tune of $21 million. Outside of those revenues, the Richmond-based institution’s athletic department earned around $14 million during FY19.
McLaughlin added that “probably 98%” of the school’s conference payout—a combination of its NCAA earnings and media rights money—also comes from the sport.
“At the Power Five level, a lot of schools have two sports to generate a whole bunch of revenue, and they have large TV contracts,” McLaughlin said in an interview. “We are dependent on basketball to make us that money. Whether it’s us or Dayton, Wichita State or any of the schools like us, we are certainly dependent on the one sport.”
A handful of Power Five institutions thread a close needle between football and basketball—Kentucky nears a 50/50 split at nearly $41.4 million in revenues from the former to $38.8 million from the latter, while Kansas, UNC and Louisville see similar patterns. But it’s at the Daytons and VCUs, which operate without substantial (if any) football support, where the dependence is clear.
Of non-FBS institutions, Dayton brings in the second-most money from basketball behind Marquette. The Golden Eagles made $21.8 million in hoops revenue last fiscal year, according to EADA data, good for 56% of their total revenues. Just behind the Flyers is Gonzaga at $16.2 million (45%). A chunk of Big East heavyweights follow, with VCU falling lower down the list.
Dayton puts its hit from the cancellation of March Madness and reduced conference distributions at seven figures, while VCU puts its own around “a couple hundred thousand.” As McLaughlin explained it, the A10 splits its NCAA earnings among member institutions on both an equity and performance basis, with higher earners like Dayton and VCU taking home a bigger percentage of the total thanks to the “units” they earned for the conference through NCAA tournament bids and wins.
The Flyers were heading into postseason play undefeated in conference contests and at 29–2 overall, and a deep run could’ve meant substantial March Madness earnings for the conference, which are paid out over a six-year span.
Dayton made the Elite Eight in 2014, meaning that 2020 would’ve marked the final year of its six-year payout from that run. With NCAA distributions slashed across the board by almost two-thirds and nothing new coming down the line from this year, Sullivan calls it a “double hit,” one that reverberates throughout the whole conference, with all basketball-playing institutions in line for a piece of the earnings—fellow powerhouse VCU included.
As the 2021 season begins, both schools are prepared to make do this season, but basketball losses beyond that could be a devastating blow for the Daytons and VCUs of the college sports world.