If you, like me, spent much of the last three years constantly hearing about how Covid wreaked havoc on athletic department budgets or listening to doomsday-ers warn that NIL will bleed athletics programs dry, I come bearing good news: no more! College sports revenues are back, y’all, and in a big way. And that, SporticoU readers, is how we start a Wednesday.
Each fiscal year, schools are required to submit annual expense and revenue reports to the NCAA. The reports filed this month cover the 2021-2022 academic year, running from July 2021—when NIL was given the green light—through the end of June 2022. That means this batch of reports captures the first year with NIL in play and a relatively regular slate of college sports, including a mostly normal fall 2021 football season with few cancelations and limited attendance restrictions. The gist? Things were relatively normal for the first year since 2019.
With reports from more than half of the NCAA’s public FBS schools now inputted into our database, we can start to see some patterns. The 30,000-foot view is that top college athletics departments are spending—a lot. Expenses are up across the board, even when compared to the last fiscal year unaffected by the pandemic, 2018-19. Most increases mirrored inflation, but in some categories, expenses significantly exceeded the inflation rate. Revenues similarly rebounded, with generated revenue (which doesn’t include things like student fees or institutional support) up 8.5% over the last pre-COVID season.
My colleagues did a great dive into some of these numbers, with even better charts and graphics, in the newsletter’s featured story. But I still want to highlight some of the areas where spending spikes most significantly outpaced inflation. The biggest culprits won’t shock anyone—coaching compensation, football, and coaching compensation in football, in particular.
Here are some of the most eye-popping numbers from the 63 schools we’ve analyzed so far vs. 2018-19 (what we’re using as our pre-pandemic “normal” metric):
- 37%: The increase to football coaches’ compensation and bonuses from bowl games. And people say bowl games don’t matter anymore!
- 31.6%: The spike in the amount of severance payments among the unfortunate crew to have written such checks. A whopping $93.9 million was spent by the schools that made severance payments last fiscal year, $56.3 million of which went to football coaches and another $26.9 million to men’s basketball coaches. A total of just $2.4 million was paid to women’s basketball coaches. A handful of programs ponied up the bulk of that money, but no one spent more than Washington’s $17.7 million.
- 18.2%: How much total pay for football coaches was up. Among the 63 schools, the average spend on college football coaching staff compensation was nearly $8 million.
- 17.5%: The jump in football recruiting expenses. At the Power Five schools included in our sample, that increase was more than 20%, while non-football recruiting expenses declined.
- 12.6%: The pay boost for non-football coaches. It’s no 18% boost, but it’ll do.
Toy with the database if you have time. It’s fun, I promise! We’ll be adding the rest of the schools as we obtain their reports, so we’ll have an even more comprehensive view of college athletics budgets in the coming weeks.
It’s also the time of year when the NCAA releases its own financial statements. Last year the governing body experienced a real bounce-back, with a record $1.16 billion in revenue and a $122 million surplus to boot for the 2021 fiscal year. This year’s billion wasn’t quite as big, but the NCAA still posted revenue of $1.14 billion for FY22 though this time it operated at a $59 million deficit, largely because event insurance got super expensive thanks to the pandemic. The NCAA had a policy, cashed it in and saved itself from despair during the pandemic. Anyone else with a similar safety net likely did the same, which has now priced everyone out of the insurance market. The NCAA’s solution was to create its own insurance entity, which cost some money upfront.
That’s it from me today, folks. Until next time!
