EUGENE OR - JANUARY 13: Phil Knight co-founder and Chairman of Nike Inc. addresses the crowd before the first game between the USC Trojans and the Oregon Ducks basketball teams at Matt Court on January 13 2011 in Eugene Oregon. The arena is named Phil Knight's son Matthew who died at the age of 34 in a scuba diving accident. (Photo by Steve Dykes/Getty Images)
In news that should be shocking to approximately no one, many college athletic departments lose money. The Pac-12 gets by, but many of their members have needed financial assistance recently.
By trying to sustain numerous non-revenue sports with the operating revenues from football, a lot of teams foot too huge a bill for their profitable sports to cover, particulary when football (and to a lesser extent men's basketball) performs worse than expected. Departments are forced to tap into student fees, outside support and state money to try and keep their programs upright. A majority of Division I FBS teams receive over 50% of their total revenue from subsidies, leaving themselves perilously vulnerable when things go south for the team's football program.
USA Today released college revenues and expenses from 2006 to 2011 for schools wiling to disclose that info. At first glance, things don't look so bad: Revenues exceed expenses for five of the eight conference members back then. However, subtract the subsidies, and things don't look so peachy for almost anyone. Every program here would be millions of dollars in the red if things worked out like that.
(Stanford and USC do not disclose revenues and operating expenses, but I'd be surprised if they had many if any subsidies, as both programs have very wealthy boosters and donors that help foot the bill.)
Only the Oregon Ducks maintain healthy profits for their football program without having to worry about huge subsidies. Bryan Fischer of CBS Sports went inside the numbers and pointed out how important it was for Oregon to make the national championship game:
Thanks to mega-booster Phil Knight and the most successful run in school history on the football field, Oregon has seen revenues skyrocket and expenses shoot up 71% since 2006. It's also notable that the run to the BCS championship game caused revenue to go from $59 million to $122.4 million in a year. Because USC, which gets a nice chunk of change from ticket sales at the massive Coliseum and big merchandise money, is private we won't really know how the Ducks compare to their rival down South but it's safe to say Scrooge McDuck approves.
The overall revenue increases clearly go to Oregon, which you can view after the jump.
89.9% 33.9% 26.8% 34.7% 41% 3.6%
There are also two more shools that aren't doing so bad with regard to subsidies in Washington and UCLA. The Washington Huskies also maintain one of the strongest booster networks in the country, and that might have helped them come in second. UCLA is close behind, probably thanks to their storied basketball tradition and huge alumni network.
Every other school (including Colorado and Utah) need considerable subsidies to stay profitable.
There are some schools that have it more difficult than other. Subsidies couldn't keep Washington State and Arizona State (two of the schools with around 20 to 30% of their revenue coming from subsidies) from hitting the red. Oregon State's lack of revenue increases have forced them to be far more heavily subsidized (30%!). Washington State has increased their revenue but still remain heavily dependent on subsidies as well.
In the upcoming years, the Pac-12 might stand a good shot at shedding all that. Notice that the Big Ten is the only school that is nearly subsidy free (four schools with 0%, six schools with less than 1%, all eleven schools that publicly disclose at 10% or less) . Guess what the Big Ten also has? A TV network dedicated to the conference that provides much needed revenue to its members.
Keep in mind the new super-duper Pac-12 TV contract should ease the burden on a bunch of these schools, as the TV money coming in per year to each school will total around $20.8 million per year for every school. That could reduce the dependency for programs to rely on subsidies and ensure future self-sufficiency down the line. The Pac-12 Network could make a huge difference in the fortunes of total conference revenue.
So for now, the conference is on the netural side of overallcollege athletics revenue.