Big-time college athletics departments are spending—and bringing in—more than ever, despite recent fears that the COVID-19 pandemic and more marketing rights for athletes would trigger a new era of austerity.
Schools across the country recently finalized their annual revenue and expense reports for the 2021-22 academic year, the first full college season under new NIL rules, and the first since the pandemic’s onset with minimal postponed or canceled games. Over the next few weeks, Sportico will continue collecting those reports from the public schools in college football’s top tier, and inputting them into its Intercollegiate Finance Database.
An analysis of 63 public FBS schools shows budgets have expanded along with rising inflation, in some cases exceeding the inflation rate. Topline athletics expenses among this cohort increased 7.3% in 2021-22 compared to 2018-19, with the average program upping its spending from $86.4 million in 2018-19 to $92.7 million in 2021-22. Generated revenue—which Sportico calculates by removing line items such as student fees and transfers from the institution—grew at a similar rate, from $74.2 million in the last pre-COVID season to $80.6 million in 2021-22 (an 8.5% jump).
This overarching trend was also reflected in the NCAA’s most recent financial disclosures. Last week, the governing body released its fiscal 2022 report, and its business is also largely back to a pre-pandemic normal. Revenue from its TV deals are at record levels, as is the money it makes from hosting championship tournaments and the NIT. The NCAA would have posted record total revenue in 2022 if not for a $72 million net loss from its investments.
In all, the findings push back against the apocalyptic noises that came out of athletic departments two years ago, when prominent ADs warned their fan bases that the emerging financial crisis posed an existential threat to their programs and prophesied that the economic model of intercollegiate athletics had “changed forever.” NCAA executives used similar language in the organization’s fight to prevent athletes from profiting off their name, image and likeness (NIL).
Early data indicates these fears, real or imagined, may have been unfounded. Here’s a deeper look inside the latest athletic department data:
Athletic budgets recovered last year after a huge dip during 2020-21. The 7.3% increase in average expenses from 2018-19 to 2021-22 is approximately equal to the 8.3% CPI inflation over the period spanning the beginnings of those fiscal years, as measured by the Bureau of Labor Statistics.
Spending in some specific categories did not fully bounce back after pandemic cutbacks, however. Fundraising and marketing expenses, for example, were slashed in half during the 2020-21 school year, and remained 16% lower in 2021-22 as compared to 2018-19.
Coaches did not bear the brunt of athletic departments’ cost-cutting during the pandemic, and also received a salary bump in the first full year in which revenues were unaffected by COVID-19.
Total pay for football coaches is up 18.2% since before the pandemic, an increase far outpacing even that of non-football coaches, whose pay has risen 12.6%. Furthermore, football coaches’ compensation and bonuses specifically from bowl games increased by 37% on average, more than any other expense category reported.
Coaches were paid more in 2021-22 than ever before, but they were also paid more not to coach. Severance payments increased 31.6% among the 63 colleges Sportico analyzed, the second most of any expense category. A large chunk of this increase was concentrated in a few schools. The University of Connecticut, for instance, paid former men’s basketball head coach Kevin Ollie more than $11 million in 2022 when the school lost in arbitration after attempting to terminate Ollie “with cause.”
Many elaborate campus visits that might have occurred during a normal year were replaced with video calls during the height of the pandemic. Consequently, recruiting costs plummeted in 2020-21, but they rebounded the following year. Overall, recruiting expenses increased 5.7% between 2018-19 and 2021-22.
That number, however, doesn’t tell the full story. Football recruiting expenses spiked 17.5% in 2021-22 versus three years prior, while non-football recruiting costs actually declined. This trend was seen more acutely at Power Five schools, where football recruiting expenses are more than 20% above pre-pandemic levels.
Revenue shortfalls during the COVID-19 pandemic led some schools—and their athletic departments—to seek quick capital via loans. Debt during the last 36 months, however, grew much faster on the academic side. At these 63 schools, institutional debt rose 13.5%, while athletics-specific debt rose just 3.1%.
Emily Caron contributed to this story.