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Altimore: Reframing the State of College Sports Finances

Understanding some recent trends could prove useful in navigating an uncertain future

Posted on June 1, 2023

  By Tony Altimore, SuperWest Sports

The landscape of college sports has changed dramatically over the past few years with NIL, conference realignment, the transfer portal, and the recent $2.78 billion House settlement of three separate antitrust lawsuits against the NCAA.

NCAA logoI recently analyzed the financial impacts of some of these changes from 2007-2019 (adjusted for inflation) in an 18-part X app thread, and I have pulled them together in this article for SuperWest Sports.

Each part briefly addresses a specific financial topic that I think the media tends to miss the boat on, accompanied by a customized graphic.

Understanding these trends could provide some insights that may prove useful as athletic departments, media, and fans seek to navigate the uncertain future of college athletics.

The Growing Revenue Gap
It starts with revenue: Rapidly growing gaps are getting worse, and unpromoted Group of 5 programs are going to be in big trouble.

While the revenue gap between the SEC and Big Ten in comparison to those of the Pac-x, ACC, and Big is significant and growing, the gaps between those and the Group of 5 conferences are drastic.

Most G5 athletic departments cannot support themselves financially on earned revenue.

Athletic Department Earned Revenue graphic
Graphic: Tony Altimore

Expenses Keep Growing Faster than Revenue
At the same time, the arms race growth in expenses is rapidly outpacing revenue, especially at the G5 level.

The resource gaps between “Power 2,” the “Next 3,” and the “G5” are getting worse, and the impact will continue to accelerate.

Power conferences have dramatically escalated spending while G5 schools have grown much more slowly, creating a rapidly growing disparity between the “haves” and “have nots.”

Athletic Department Expenses
Graphic: Tony Altimore

Unprofitable Programs Need Heavy subsidies
How do these programs (especially outside the big revenue conferences) afford a sports arms race?

They have to massively subsidize the athletic dept from the academic side of the house (and via student fees), which may not be sustainable.

G5 schools need to subsidize most of the costs needed by their athletic programs via school and student funds.

The large revenues of the Big Ten-SEC athletic departments allow them to keep funding their growing athletic arms race with minimal school support.

High B12 may standardize as new teams integrate new revenue.

School Subsidies as % of Athletic Budget
Graphic: Tony Altimore

Athletic Department Share of Total Budget
Here’s where things get wild: How much of the school’s total academic budget is being spent on sports? And…can they afford it?

This explains A LOT about how schools make decisions, and why other conferences may feel very foreign to some fans.

Athletic budgets make up a. significantly higher percentage of a school’s total academic budget in SEC and SBC or CUSA and Big 12 and ACC than they do in other conferences, and the sports percentage of total budget is rising especially quickly in the SEC and SBC conferences.

Graphic: Tony Altimore

Athletic Revenue as a Percentage of Total Academic Budget
How important is sports income to the school itself? Can they afford their spending?

On opposite sides of the spectrum, mega research schools and G5 programs rely less on sports money (which explains how school leaders responded to COVID-19.)

Athletic revenues make up a much larger share of SEC schools’ budgets than other power conferences, not just due to prioritization, but also relative to extremely large academic budgets at the Big Ten and the former Pac-12 schools.

On the G5 level, it is a very small percentage because G5 programs earn so little revenue from athletics.

Graphic: Tony Altimore

Trends Continuing
The impacts of the Covid years (canceled games, no fans, etc.) threw all of the metrics from FY20 and FY21 into haywire.

But adjusting for those issues, the trends themselves are continuing FY22 will be the first “normal” year again.

Full details aren’t out yet, but the trends are expected to continue, and many of them will rapidly get worse, especially as the B1G and SEC begin their new media deals.

Resources: Different Worlds
Gaps between the A5 and G5 conferences exist across the board, both academically AND athletically.

Intermingled B1g Ten/Pac-12/ACC/SEC explains much about realignment: Aspirational perspectives illustrate why teams do not realign downward academically.

A high concentration of the largest and wealthiest FBS schools, both in academics and sports, are within the conferences mentioned above.

In short, resource gaps between A5 “power” conferences and the G5 are dramatic, both academically and athletically.

Graphic: Tony Altimore

Conference and Resource Clusters
When looking at total athletic budgets vs. academic budgets, the conferences continue to align together in cluster groups (with some exceptions).

The long, close institutional connections between B1G and Pac-12 (and ACC, too) schools are especially noticeable

Resource gaps between the “haves” and “have nots” become clear, especially in blueblood programs, with both academics and sports.

Higher Ed Influence and Power
The biggest misconception for college sports fans is that all the power is held by the big sports schools, which is NOT true These are colleges and if you’re not thinking about the AAU’s priorities (or its leaders), you’ll miss the big picture.

Conference members typically align on academic prioritizations.

conference members typically align on academic prioritization graphic
Graphic: Tony Altimore
Power Five Profitability
Even in the A5 conferences, most schools lose money on the athletic departments. Some question SEC+B1G spending on sports…but they can usually afford it!

Other conferences make spending choices and require subsidies to fund their departments. Some do it happily, while others make heavy cuts to non-revenue sports or run barebones Olympic sports programs to stop the flow of red ink.

usc logoSome Contrasting Examples: USC, Cal, Texas, and Florida expect to win gold medals in the Olympics and NCAA National Championships in non-revenue sports.

They understand that this takes heavy (yet VERY unprofitable!) investments in sports like Men’s Swimming, Track, Beach Volleyball, Rowing, etc.

Kansas State, on the other hand, has a profitable athletic department that earned a net book profit, but has made the choice to be smaller than those, and NOT to invest in those money-losing sports (not even having most of them).

Consequently, the Wildcats have never won a NCAA National Championship. However, they made a profit from their athletic dept, unlike many of those above.

Those are different management choices in resource allocation and investment, and they will become very interesting going forward:

Will more schools (like Cal recently did!) make the decision to pump large, new investments in their non-revenue sports, further hurting the bottom line?

Or will more schools follow KSU’s model of being more frugal on the Olympic sports to keep the bottom line in the black?

Even across the highest revenue “Power” conferences, most schools lose money on their athletic departments, requiring subsidies.

Net Book Profit - Earned Revenue Less Expenses graphic
Graphic: Tony Altimore

On-Field Success
Realignments are resulting in a shake-up of on-field success between conferences, pushing SEC and B1G atop of the average all-sports comparison for the past two years’ total points

Of note,  Ivy League schools perform over twice as well as G5s, and nearly as well as A5s!

SEC schools perform best across all sports, followed by a close grouping of B1G and Pac-12 and ACC.

There is then a gap to the average total performance of Big 12 and Ivy League schools, followed by a significant gap to G5, who lag well behind A5 and Ivy athletic success.

All-Sports Performance graphic
Graphic: Tony Altimore

Academic Consistency
Folks like to nitpick on how academic rankings vary, but they are incredibly consistent by conference, even with wildly different methodology focus areas

For conferences on the upper end of these charts, this stuff matters a LOT more than many fans think it does!

Rankings are very comparable, regardless of. methodological focus.

Academic Ranked - average ongoing conference members graphic
Graphic: Tony Altimore

Combined Academic and Sports Success
These are some of the most fascinating charts to look at, and they have changed a LOT in the past two years since we first with through them with the guys at 365 Sports.

We could make dozens of cuts and deep dives on them, but here are a few that are especially interesting, given things today.

There are so many aspects of CFB history that are still evident today in these as well, as a lot about why realignments have happened before and considerations for future moves going forward.

They’re a lot to digest, and feel free to spend some more time on them with a bigger screen!

(A note to the footnote-loving nitpickers: These use the same two-year all-sports success points from the above charts, using an average of academic ranks across the 3 most universally respected systems, so there’s no skewing for one methodology or another.)

The “Power” conference institutions are effectively in a different universe athletically and institutionally compared to most G5s.

Athletic Success vs. Academic Rank
Graphic: Tony Altimore

None of the lowest-ranked academic schools enjoy significant athletic success, likely a reflection of resources and commitment.

Athletic Success vs. Academic Rank

Most conferences are made up of members who are aligned on a shared vision of academic + athletics strategies and expectations.

athletic success and academic rank-3

Despite athletic resource gaps, the five “Power” conferences are still intermingled in academic standing and athletic success.

athletic success and academic rank-4
Graphic: Tony Altimore

Current Realignment Discussions
We’ve talked for months about moves we expect to happen, and those that we know won’t happen, no matter how many clickbait folks cash in on repeating the same nonsense.

This is one of my favorite charts for perspective on the Pac-12/XII dynamic.

Understanding the synergistic goals of academics and athletics is crucial when considering realignment and expansion options.

current realignment graphic
Graphic: Tony Altimore

More Realignment Coming?

If (as expected), the Pac-2 backfills back up to be the Pac-12, realignment always flows downhill… It will be fascinating to see what decisions are made by those conferences, and something that I don’t think the media is talking enough about right now!

Realignment coming graphic
Graphic: Tony Altimore

The Broader View

This chart gets even more interesting when we look at the broader view of universities, and also add in the Ivies and other AAU schools, creating a unique triangle that shows many top schools that also DO care about their successful athletic programs, too.

There are three very separate groups in college sports, with very little overlap: A5 “Power” conferences, elite Ivy League schools and AAU, and G5.

broader view 1 graphic
Graphic: Tony Altimore

With a few notable exceptions, the three groups are distinct: academies, recent upgrades, and a few academic elites stand out.

Broader View 2 graphic
Graphic: Tony Altimore

The Power conference members generally align in their strategies across both academics and athletics, generally clustered together.

Broader View 3 graphic
Graphic: Tony Altimore

G5 schools span the full range of academic status, from elite AAUs and academies to regional/commuter schools, but none of them can compete across the athletic department with power conference teams.

Broader view 4 graphic
Graphic: Tony Altimore

2022 College Sports Finances Data

Now that the Knight Commission and the Department of Education have published new FY22 financial data, we can get a first good look at the state of college sports dollars post-Covid.

There’s a LOT to unpack, but here are the high-level key financial updates by conference.

The Big Ten, former Pac-12, and SEC have more sports and more varsity athletes than other conferences, dedicating the resources to fund them.

2022 data graphic
Graphic: Tony Altimore

There are dramatic and growing differences in the resources dedicated to athletics in the A5 “Power” conferences vs. others.

2022 data 2 graphic
Graphic: Tony Altimore

SEC teams lead spending in football, followed by the ACC and Big Ten; In hoops, Big East teams lead spending for their flagship sport.

2022 data 3 graphic
Graphic: Tony Altimore

There are significant revenue gaps among “power” conferences, but also dramatic gaps to the G5, requiring heavy subsidies from schools.

2022 data 4 graphic

—More from Tony Altimore—