The bottom line: accounting for revenues and expenditures in intercollegiate athletics.

Matheson, Victor A. ; O'Connor, Debra J. ; Herberger, Joseph H. 等

Introduction and Data

Athletic departments and intercollegiate sports are important and highly visible components of the majority of colleges and universities in the United States. Football and basketball teams often serve as the public face for major institutions of higher education. It is also generally believed that athletic programs serve as major revenue sources for their institutions. We examined the revenues and expenses of major university athletic programs to determine the extent to which athletic programs either generate revenue or impose costs upon host institutions.

Detailed revenue and expense accounts certified by independent auditors are typically not available for college athletic programs for several reasons. First, even though the Financial Accounting Standards Board, the Governmental Accounting Standards Board, and the American Institute of Certified Public Accountants issue reporting and auditing standards and guidelines for institutions of higher education, the standards are different from those required of publicly traded corporations. Second, a large number of the country's colleges and universities are private, not-for-profit institutions and therefore are subject to different accounting standards; the major problem is that there is no uniformity in the application of the accounting practices (Zimbalist, 1999). Third, athletics are simply one division within a larger entity. In general, even those institutions with strict reporting standards are not required to provide revenue and expense details for every individual operational unit within the business. For example, while Apple is legally required to provide financial statements for its business overall, it is not required to break down its profits as they are earned between computers, software, media, and consumer electronics.

While much research has been conducted on the indirect benefits of having sports programs, little has been conducted on the direct benefits of having intercollegiate sports programs. The few studies that have been conducted (Borland, Goff, & Pulsinelli, 1992; Goff, 2004; Skousen & Condie, 1988) all agree that determining the actual direct benefits of operating a particular sports program is a difficult process. Due to the not-for-profit environment of universities and their unique accounting procedures, accurately determining the financial profit or loss from athletic programs requires an intimate knowledge of a specific university's detailed accounts and accounting conventions. In calculating whether an athletic program is generating profits or operating at a deficit, it is necessary to consider the relevant revenues and expenses (i.e., those costs and benefits that differ between alternatives)--in other words, those revenues that would not be received and those expenses that would not be incurred without the program. As such, a relevant cost not only includes resources consumed (an accounting cost) but includes the benefits that are given up by choosing one alternative over another (an economic or opportunity cost). Adjustments are also needed for valuing grant-in-aid expenses at their true incremental cost and attributing athletic-produced revenues and expenses to athletic accounts. The discrepancy between the reported and actual financial impact of sports programs is also due to internal transfer pricing practices. For example, an athlete's grant-in-aid expenditure for the athletic department represents revenue for another operating function of the university, so the athletic expenditure is not the true cost to the university. There is another mitigating factor: Some expenditures that are treated as necessary costs are more accurately reflected as excess budgeting revenue still needed to be used--that is, as directors of operating functions in a university setting do not have a profit-motivating incentive.

Skousen and Condie (1988) developed a model to evaluate the revenues and expenses of the athletic program at Utah State University in order to determine whether it was advisable to drop the football program, which, according to university accounting procedures, ran at an operating deficit. The model utilized a cause and effect basis for allocating revenues and expenses. The authors identified direct revenues and expenses for each sport and used an allocation method for the indirect revenues and expenses (based on number of athletes and number of tickets sold, among others). The authors found that dropping the football program at Utah State University would not eliminate the financial problems of the athletic program and in fact would lead to more financial pressures. Borland, Goff, and Pulsinelli (1992) used Western Kentucky University as a model for evaluating the direct benefits of an athletic program. They analyzed the economic impact of the marginal revenues and marginal costs of the entire athletic program, football, men's basketball, and other sports. Their marginal revenues and costs were calculated based on what revenues and costs would be eliminated without the sports program as a whole and then for specific sports programs, paying particular attention to marginal versus sunk costs (i.e., those costs incurred whether or not there is a particular sport). They also included the issue of general student enrollment impacts in their analysis. They found that Western Kentucky University's athletic program was a net contributor to school revenues. Goff (2004) noted that reports have estimated many university athletic programs, even big-time programs, operate at a loss. He addresses this assertion by adjusting the athletic profit and loss figures for 109 NCAA Division I schools as reported by Sheehan (1996) for various accounting issues, such as valuing grant-in-aid expenses at their incremental cost and attributing athletic-produced revenues and expenses to athletic accounts. He found that only 10% of schools lost money and 79% of schools had at least $1 million in profits, with 72% exceeding $2 million in profits.

Several sources of financial data for collegiate athletic programs are available. Most prominent is the annual Equity in Athletics Disclosure (http://ope.ed.gov/athletics/) report compiled for all colleges and universities in the nation with athletic programs by the U.S. Department of Education's Office of Postsecondary Education (OPE). While data specific to each individual school is available for every school with intercollegiate athletic teams at any level of competition, unfortunately the required data submitted to the OPE is not sufficiently detailed, especially on the revenue side, to permit any reasonable analysis of the revenues truly generated by sports programs.

The other major source of athletic program financial data is the National Collegiate Athletic Association's (NCAA) annual Revenues and Expenses of Division I Intercollegiate Athletics Programs Report. This lengthy report collects detailed data regarding revenues and expenses for each of the over 300 colleges and universities with Division I athletic programs, the highest level of intercollegiate competition in the U.S. The data are broken down into 15 revenue categories and 19 expense categories for every academic year for each school. As opposed to the OPE data, these revenue and expense data are sufficiently disaggregated to allow reasonable analysis. However, there remains one problem: The NCAA does not release data for individual schools--they report only averages, as well as values at the 25%, 50%, and 75% quartiles for all Division I schools. See Table 1 for a sample of the types of data that are collected.

Ideally, one would like detailed expense and revenue data for each individual school. The OPE provides aggregated expense and revenue data for individual schools, while the NCAA provides detailed expense and revenue data for aggregated schools. Fortunately, at least two media organizations have used U.S. Freedom of Information Act (FOI) requests to compel public universities to release the detailed financial information they submitted to the NCAA as part of the Revenues and Expenses of Division I Intercollegiate Athletics Programs Report, 2004-2008 (National Collegiate Athletic Association, 2009). USA Today has collected data for roughly 200 schools for overall athletic program costs and revenues from 2004-2008. As noted previously, this detailed data includes revenues and expenses broken down into 15 revenue categories and 19 expense categories. The Indianapolis Star newspaper obtained the data originally submitted to the NCAA for the 2004-2005 academic year alone. Unique to the Indianapolis Star, within each category, all revenues and expenses were allocated across five designated areas: football, men's basketball, women's basketball, other sports, and non-program specific. As noted on the Indianapolis Star website (http://www2.indystar.com/NCAA_financial_reports/), but also echoed by USA Today, "The numbers are presented here as they were reported to the NCAA. No attempt was made to change or research anomalies. The NCAA does that. Despite improvements in accounting procedures, schools still differ in how they report certain information."

Given the ability to examine revenues and expenses within individual sports, we retrieved data from the NCAA Financial Reports Database, 2004-2005, from the Indianapolis Star Web site (http://www2.indystar.com/NCAA_financial_reports/) on June 1, 2010 and examined them in-depth. The data were originally obtained through FOI requests to the 215 public schools that competed in Division 1 athletics during the 2004-2005 school year. Of this number, 164 schools complied with the request. (1)

In addition, 112 private schools also compete in Division 1, but these schools were under no obligation to comply and none did. It is worth pointing out that, while private schools are exempt from FOI requests since they are not public agencies, private universities and colleges nevertheless receive massive public subsidies from all levels of government. For example, students, including athletes, at private schools are eligible for federally subsidized financial aid. Donations to private colleges, including those to the athletic department, are categorized as charitable contributions, providing the donors with a potential tax break on their income taxes. The land and buildings of private colleges, including their athletic facilities, are typically exempt from local property taxes. Although most private schools and their athletic programs could not operate without these public subsidies, these same institutions feel no obligation to provide information to the public regarding the finances of their sports programs.

While the 164 schools examined in this paper represent only a fraction of the total number of colleges with athletic programs, a majority of the schools with what would normally be considered big-time programs were included as well. The sample included 51 of the 72 teams in one of the six largest athletics conferences in the country: Big Ten, Big 12, Pac-10, Southeast Conference, Big East, and Atlantic Coast Conference, collectively known as the BCS conferences. The sample also includes 46 of the 50 largest schools in terms of average football attendance and 37 of the 50 largest schools in terms of average basketball attendance.

It is also important to note that the present study only addressed the direct costs and benefits of athletic programs. Obviously, sports teams may have large indirect costs and benefits that do not show up on the bottom line. On the benefits side, numerous articles have explored the impact of athletic success on measures, such as applications (Borland, Goff, & Pulsinelli (1992); Goff, 2004; McCormick & Tinsley, 1987; Murphy & Trandel, 1994; Pope & Pope 2009; Toma & Cross, 1996; Tucker, 2005; Tucker & Amato, 1993), graduation rates (Amato, Gandar, & Zuber, 2001; Rishe, 2003; Tucker, 1992), and alumni giving (Baade & Sundberg, 1994; Grimes & Chressanthins, 1994; Humphreys, 2006; Humphreys & Mondello, 2007; Rhoads & Gerking, 2000; Siegelman & Brookheimer, 1983; Siegelman & Carter, 1979). Previous studies report mixed effects from athletic success and, for those cases in which benefits are identifiable, the effects are generally small. Of course, in all of these studies, the authors examine only the effect of athletic success on other variables, not the effect of the presence of an intercollegiate athletic program itself on these variables.

On the other side of the coin, critics of college sports suggest that big-time athletics, in particular, undermine the academic mission of colleges and universities. As noted by Matheson (2007), the athletes themselves "take easier (and sometimes academically worthless) courses, are graded less severely, and perform worse than their peers in the classroom despite the availability of special academic services, such as private tutoring, available only to athletes" (p. 516). Athletics also potentially distracts attention from learning among the general student population. (2)

Of course, while the indirect costs and benefits of athletics are very important to consider, there is a notable lack of specific knowledge about the direct costs and benefits of athletic programs.

Accounting for Profits

While the idea of profits is conceptually easy from an accounting standpoint, accurately measuring profits is not as simple as it first appears. In the present study, we reported average profits for BCS schools, non-BCS schools with football, and non-BCS schools without football for the athletic programs overall, as well as for men's and women's basketball and men's football under a variety of different definitions of profit. While there were a handful of BCS schools without football teams (e.g., St. John's University and Seton Hall University), we did not include them in the sample. In addition, the number of teams that reported a profit in each sport, as well as the profit for the overall program, were reported. The finances for football and basketball were examined separately because these are the programs that typically generate far and away the most revenue at U.S. colleges and universities.

The first measure of profit, recorded in Table 2, was simply calculated as total reported revenues minus total reported expenses. By this measure, athletic programs were shown to be highly profitable for major programs: Football and basketball made money at major programs but not at smaller programs, and athletic programs overall were profitable at most institutions (117 of 166), regardless of size.

This initial measure of profitability was unappealing, however, as it included a variety of subsidies as revenues. Student fees, direct support from the institution or the state government, and indirect support from the institution were all counted as revenues in the same way that ticket and concessions sales were counted. The second measure of profitability, shown in Table 3, excluded these subsidies from revenues. The NCAA designated the remaining revenues as generated revenues. The exclusion of subsidies painted an entirely different picture of the profitability of college athletics. Football and basketball programs at BCS schools still tended to be highly profitable at nearly every school, but athletic programs overall lost money at even the largest institutions. Even with football generating in excess of $50 million per year at the highest revenue institutions, athletic departments only broke even at 15 of the 166 schools in the sample and overall lost nearly $6 million on average. At non-BCS schools, even football and basketball rarely broke even, and athletics overall showed a deficit at every school.

Athletic programs were often supported by generous voluntary contributions by alumni and fans. Donations to the athletic department averaged $4.5 million for the schools in the sample and exceeded $10 million at nearly 1 out of the 6 schools we surveyed. While athletic departments may increase contributions to the university, donations designated specifically to the athletic department may actually reduce donations to the rest of the school by causing potential donors to substitute away from the general fund to the athletic department. The magnitude of this substitution effect is unknown and generally unexplored in the academic literature, but anecdotal evidence suggests that the pool of general fund donors may be distinctly different from athletic donors. That being said, the measure of profit, shown in Table 4, assumed that athletic donations were perfect substitutes for other contributions and showed the profit generated as revenues minus contributions minus total expenses. By this measure, major football and basketball programs remained largely profitable, but athletic programs overall lost money at an average of more than $10 million per institution; however, a single college athletic program, the University of Michigan, operated in the black by this measure.

The final measure of profit attempted to allocate expenses and revenues across sports in a more reasonable fashion. Under the accounting methods used to report expenses and revenues to the NCAA, a large portion of both expenses and revenues were not allocated to specific sports. For example, an average of $9.7 million of the $23.5 million in total revenues, including subsidies, generated by the average athletic program was not allocated to a specific team. In addition, $9.0 million of the $22.8 million in expenses was not allocated to a specific team. Expenses can be categorized as either variable, fixed, direct, or indirect. Variable expenses vary in direct proportion to a level of activity, whereas fixed expenses remain constant regardless of changes in the level of activity. These variable and fixed expenses can then be either a direct or an indirect cost. A direct cost is one that can be easily traced to a particular cost object, and an indirect or common cost cannot be easily and conveniently traced to a specified cost object--in this case, a particular sports program. Indirect or common costs are typically assigned by some allocation base, such as the number of tickets sold for a particular sport. Table 5 shows profit generated as revenues minus expenses, with all nonprogram specific revenues and expenses allocated across teams based on the number of athletes in each specific sport. Obviously, this is not an ideal methodology for all accounts, but it can be used as an approximation. As seen in Table 5, this accounting method served to reduce average profits within basketball and football by about 10%.

One other appealing measure of profit was not reported in the present study due to data difficulties; however, the conceptual issues were still addressed. The reported expenses for student aid likely overestimates the cost of the athletic program to colleges and universities. Student aid includes athletically related financial aid given to student athletes. Financial aid to athletes is considered a payment by the athletic department to other university functions (internal transfer payments) where the marginal cost could be at or near zero. To determine the actual costs to the university, the incremental costs incurred as a result of providing services in each receiving department must be determined (Goff, 2004; Skousen & Condie, 1988). If a college is not at capacity, the incremental cost of adding a small number of scholarship athletes is likely to be significantly less than the full-tuition scholarship that is reflected on the universities books since the student would fit into existing classes and housing (Borland, Goff, & Pulsinelli, 1992). Indeed, if the athlete at a below-capacity institution is offered only a half-tuition scholarship--athletes are commonly offered student aid packages that are a fraction of full tuition--he or she will need to pay the remaining tuition. As a result, the school's revenues will increase due to the tuition payment by the athlete and the school's profits may actually rise if the marginal cost of accommodating the athlete is sufficiently low. Of course, as noted previously, attracting prospective students, many of whom may be athletes, is one reason to have an athletic program in the first place.

Of course, while adding one additional student in an underutilized college may be costless at the margin, few schools offer open enrollment to all applicants. This suggests that, at a large percentage of colleges and universities, other paying students would have taken the place of the admitted athlete. Furthermore, athletic programs can be quite large, with up to 1,000 student athletes. At small colleges with large athletic programs, the percentage of the study body participating in intercollegiate athletics can exceed 20%. Clearly, with such numbers, athletic programs cannot generally be considered to operate at the margins of enrollment. In addition, average cost per student is likely to be a relatively accurate measure of the marginal cost of the student athletes in the program as a whole.

Further complicating the matter is the fact that nonathletes also commonly receive financial aid. In the case of an institution that is near capacity, in the absence of student athletes, presumably the other students who would have attended the university in their place would have likely received financial aid. The true net cost of the student aid given to athletes should not be the total cost of student athlete financial aid; instead it should be the incremental cost between the average aid package given to an athlete, compared with the average aid package given to a nonathlete. Obviously, the full ride scholarships given to promising players in major sports programs will exceed the typical financial aid package given to a regular student, but the average nonathlete still imposes financial aid costs upon the institution. In addition, many athletic departments provide costly tutoring and academic coaching programs for their student athletes. This should be included in any cost assessment.

A simple numerical example illustrates some of the various scenarios that must be considered, and the difficulties involved in estimating the true cost of athletic scholarship aid. Suppose a university's full tuition is $20,000 and that the average athlete receives an $11,000 scholarship. The question to an economist or an accountant is, "What is the net cost to the institution of an athlete?" Under the accounting methodology used by most NCAA programs, the $11,000 scholarship is treated as an $11,000 expense for student aid. The true net cost is much harder to disentangle.

Under the methodology of Borland, Goff, and Pulsinelli (1992), at an institution that is below capacity, the university should be credited with revenues of $9,000: the remainder of the athlete's tuition not covered by scholarship minus the marginal cost of providing the athlete with an education at the institution, which they argue is typically low. Rather than placing a cost on the university, the athlete actually may generate tuition revenues in excess of the marginal cost of his or her education. Mathematically, net cost = student aid - full tuition + marginal cost. Net cost will be negative, representing a gain rather than a cost to the university if the net tuition remaining after student aid is offered is larger than the marginal cost of providing education.

One should not be so quick to presume low marginal costs of education services provided to student athletes, however. As noted previously, athletic programs will often be large enough that it is not reasonable to presume that each athlete can be treated as a student at the margin. Furthermore, on the assumption that a college or university has made a conscious decision about optimal class sizes, adding students will quickly result in significant additional costs to the university in order to bring class sizes back to optimum; alternatively, the larger class sizes impose implicit costs on other students and faculty. Therefore, in the context of the athletic department or sports teams as a whole, in many cases it would be more reasonable to assume a cost per athlete closer to the average cost of education rather than a low marginal cost. Of course, such an assumption will result in costs much closer to the price of full tuition. In addition, due to funds provided by donors, endowment or investment returns, grant money, and state appropriations at many colleges and universities, the average cost for educating a student is well in excess of the full tuition price. To summarize, if the average cumulative marginal cost of providing educational services to a group of athletes is equal to the average cost of providing education to the student body as a whole, and if the average cost is equal to full tuition, then the net cost of athletic aid is simply equal to the size of the student aid award. Otherwise, the average cumulative marginal cost of educating a group of athletes may be either above or below full tuition, depending on the specific conditions of the institution.

The preceding argument has assumed that a scholarship athlete will simply be added to the student body as a whole, while at any institution with selective admissions a student athlete will simply displace another student. The fact that other students may also receive financial aid, however, provides a further complication. Suppose a typical student at the previous hypothetical university receives $5,000 in scholarship aid while the average athlete still receives an $11,000 athletic scholarship. Again, for NCAA purposes, the $11,000 scholarship is treated as an $11,000 athletic expense for student aid, but the true net cost is more complicated.

Because the athlete displaces a nonathlete student, admission of the athlete should be treated as an opportunity cost as the university has foregone the opportunity to admit a student who could pay up to $20,000 in tuition. In practice, however, the foregone student is likely to pay only $15,000 in tuition versus the $9,000 in tuition that the scholarship athlete pays. The true cost of the athlete's scholarship is not the $11,000 reported as financial aid but instead is the difference between the average student aid award to the athlete minus the average student aid awarded to the nonathlete (or $6,000 in this case). Because student athletes are eligible for any scholarship awards provided to students in general--and are also eligible for student aid based on athletic ability, unless athletes are drawn from significantly different populations than nonathletes--the average athletic student aid award will be larger than the average nonathlete scholarship. It also stands to reason, however, that the net cost of athletic aid in comparison to the average displaced student is smaller than the figures reported to the NCAA.

With the data available from the sources used in this paper, it is impossible to estimate the average cost or marginal cost of providing educational opportunities for student athletes. It is similarly impossible to estimate the difference between the average financial aid package offered to athletes and nonathletes at the colleges and universities examined to any degree of accuracy. In order to provide some context, however, Table 6 provides profitability data for the schools in the sample assuming student aid costs of zero and including only generated revenues in profit calculations (analogous to Table 3). Under this assumption, one of two things must be true: (a) the average scholarship award for a nonathlete is the same as that for an athlete (in the case of schools at capacity), or (b) the average marginal cost of educating all athletes at the school is equal to the average remaining tuition paid by athletes after the award of student aid (in the case of schools below capacity).

As noted previously, Borland, Goff, and Pulsinelli (1992) would argue that in some cases student athletes might actually generate positive tuition revenue in excess of educational costs. Therefore, these figures do not represent a theoretical upper boundary for program profitability. Similarly, if the average nonathlete commands more student aid than the typical athlete, again these figures do not represent a theoretical upper boundary for program profitability. Nevertheless, for most reasonable assumptions regarding student aid, these figures represent the maximum profit level that could be ascribed to an athletic program and likely significantly overestimate profit just as the comparable figures in Table 3 serve to underestimate profits.

As can be seen in Table 6, even when the costs of student aid are completely excluded from athletic program budgets, the story is quite similar to that described earlier. When subsidies and transfers are excluded from athletic department revenues, and only generated revenues are counted, football and basketball programs at BCS schools again tend to be highly profitable. In addition, athletic programs at BCS schools break even more often than not, with 41 out of 51 BCS athletic departments showing an average profit of over $4 million. Outside the BCS, however, even with the most generous treatment of student aid, 112 out of the remaining 115 athletic departments failed to generate revenues sufficient to cover their expenses. Even the top revenue sports of football and men's basketball showed a profit in only about 20% of cases. Again, even if the costs of athletic scholarships are completely excluded from consideration, athletic departments outside the top conferences are a net drain on the finance resources of their host institutions.

Conclusions

Accounting for costs and revenues for individual units within firms is fraught with difficulty, and accounting for revenues and expenses for athletic departments within colleges and universities is even more challenging. Even though reporting and auditing standards for institutions of higher education are issued, the standards are different from those required of publicly traded corporations. Furthermore, detailed revenue and expense accounts are typically not available for college athletic programs due to the lack of uniformity in applying the accounting standards and the characteristics of the college or university environment. As such, an accurate reporting of profits or losses for athletic programs is not readily available. This paper examines the profitability of Division I athletic programs at colleges and universities in the U.S. under a variety of accounting definitions of profit. The data identify several broad themes. First, a majority of athletic departments rely heavily on direct and indirect subsidization of their programs by the student body, the institution itself, and state governments in order to balance their books. Without such funding, less than one-third of BCS athletic departments, and none of the non-BCS departments, are in the black. Second, athletic programs rely heavily on contributions to balance their books. Donations to athletic departments may serve as a substitute for donations to the rest of the university, lowering giving to other programs. Third, football and men's basketball programs are generally highly profitable at BCS schools. Below this top tier, fewer than 10% of football programs and 15% of men's basketball programs make money. Finally, properly accounting for expenditures on financial aid to student athletes is highly problematic. Even excluding the cost of athletic scholarships from athletic departments' financial statements does not alter the conclusion that profits are rare at schools that compete at a level below the major BCS schools, even in the revenue sports of basketball and football.

It is important to note that revenue generation is not the sole, perhaps even the primary, reason for colleges and universities to host intercollegiate athletic programs. Athletics provide students a valuable entertainment option, and participation in sports can be thought of as an educational experience in and of itself. Athletic competitions allow alumni to connect with their alma mater in a tangible manner and raise the visibility of the college to prospective students, funding agencies, and the public in general (Humphreys, 2006). It is outside the scope of this paper to conjecture whether any intangible benefits fully mitigate the financial deficits generated by intercollegiate athletic programs. Colleges and universities striving to host a successful Division I athletic program, however, should take care to recognize that a significant portion of the intangible benefits of sports is subject to a zero-sum game. Rival schools compete for a limited number of wins, national championships, and share of the national media spotlight, and every university's big win must be accompanied by a big loss at another school. If revenues are strongly correlated with athletic success or prominence, then it will be difficult for all schools to simultaneously depend on sports to raise large sums of money for the institution. Indeed, the data presented in this paper suggest that it is unusual for athletic programs outside of the six BCS conferences to regularly generate profits.

Nevertheless, it is beyond question that many see intercollegiate sports programs as a cash cow for colleges and universities, and this paper clearly shows that these widely held beliefs are generally false. Under most reasonable accounting measures, athletic programs typically fail to provide significant revenues in excess of expenditures, even at the largest and most successful universities. At smaller colleges, athletics are nearly always a net cost to the institution, and even the so-called revenue sports of football and men's basketball require subsidies to balance their books. While there are potentially many good reasons to have an athletic program, profit generation is not one of them.

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Endnotes

(1) The list of included schools is available from the authors upon request.

(2) See Bowen and Levin (2003), Fizel and Smaby (2004), Shulman and Bowen (2001), and Sperber (2000), among others.

Authors' Note

The authors thank Dennis Coates and Rod Fort for their helpful comments. Funding for this research was generously provided by the May and Stanley Smith Charitable Trust.

Victor A. Matheson is associate professor in the Department of Economics at the College of the Holy Cross in Worcester, Massachusetts. His research interests include sports economics and the economics of lotteries and gaming.

Debra J. O'Connor is associate professor in the Department of Economics at the College of the Holy Cross in Worcester, Massachusetts. She teaches a wide variety of accounting courses, and her research specializes in supply chain management.

Joseph H. Herberger earned his undergraduate degree in accounting from the College of the Holy Cross in Worcester, Massachusetts, and now works in the accounting sector.

Victor A. Matheson, Debra J. O'Connor, and Joseph H. Herberger

College of the Holy Cross

Table 1. Sample Detailed Revenues and Expenses for Appalachian State

 Men's Women's
Revenues Football basketball basketball

Ticket sales $404,216 $52,283 $1,781

Student fees $0 $0 $0

Guarantees $175,000 $150,000 $12,500

Contributions $28,310 $10,865 $10,765

Third party support $0 $0 $0

Government support $0 $0 $0

Direct institutional $7,557 $5,700 $1,900
support

Indirect institutional $0 $0 $0
support

NCAA/conference $0 $0 $0
distributions

Individual school $0 $0 $0
media rights

Concessions, programs, $53,964 $0 $0
parking

Advertisements & $0 $0 $225
sponsorship

Sports Camps $0 $0 $0

Endowments/investments $0 $0 $540

Other revenues $9,500 $4,220 $0

Subtotal $678,547 $223,068 $27,711

Student aid $888,027 $183,575 $221,341

Guarantees $50,000 $7,500 $250

Salaries $527,997 $241,799 $199,102

Other coaches' $0 $0 $0
compensation

salaries $0 $0 $0

Other support staff $0 $0 $0
compensation

Severence payments $0 $0 $0

Recruiting $77,449 $46,082 $37,740

Team travel $74,237 $56,301 $48,406

Equipment $103,812 $21,031 $20,988

Game expenses $43,975 $36,615 $23,516

Promotion $0 $0 $0

Sports camp $0 $0 $0

Facilities, maintenance $5,279 $8 $394

Spirit groups $0 $0 $0

Indirect institutional $7,557 $5,700 $1,900
support

Medical $0 $0 $0

Memberships $950 $3,675 $4,440

Other operating expenses $143,038 $0 $15,669

Total operating expenses $1,922,321 $602,286 $573,746

Expense to revenue -1,243,774 -379,218 -546,035
difference

 Non-program
Revenues Other specific Total

Ticket sales $0 $0 $458,280

Student fees $0 $4,360,796 $4,360,796

Guarantees $10,100 $0 $347,600

Contributions $46,813 $748,873 $845,626

Third party support $0 $0 $0

Government support $0 $0 $0

Direct institutional $125,461 $37,351 $177,969
support

Indirect institutional $0 $320,736 $320,736
support

NCAA/conference $2,326 $362,655 $364,981
distributions

Individual school $0 $0 $0
media rights

Concessions, programs, $0 $6,885 $60,849
parking

Advertisements & $0 $349,382 $349,607
sponsorship

Sports Camps $0 $0 $0

Endowments/investments $36,955 $24,616 $62,111

Other revenues $56,261 $215,695 $285,676

Subtotal $277,916 $6,426,989 $7,634,231

Student aid $950,803 $0 $2,243,746

Guarantees $0 $0 $57,750

Salaries $894,689 $0 $1,863,587

Other coaches' $0 $0 $0Support
compensation staff

salaries $0 $1,178,454 $1,178,454

Other support staff $0 $0 $0
compensation

Severence payments $0 $0 $0

Recruiting $59,369 $44,146 $264,786

Team travel $295,753 $118,172 $592,869

Equipment $147,528 $91,744 $385,103

Game expenses $42,661 $0 $146,767

Promotion $1,630 $88,101 $89,731

Sports camp $0 $0 $0

Facilities, maintenance $4,190 $20,797 $30,668

Spirit groups $0 $18,304 $18,304

Indirect institutional $32,300 $320,736 $368,193
support

Medical $0 $186,852 $186,852

Memberships $8,094 $7,794 $24,953

Other operating expenses $38,391 $363,071 $560,169

Total operating expenses $2,475,408 $2,438,171 $8,011,932

Expense to revenue -2,197,492 $3,988,818 -377,701
difference

Table 2. Total Revenues Minus Total Expenses

 Average profit/(loss)

 Men's
 Football basketball

BCS schools 11,019,708 3,714,375

Non-BCS schools (737,682) (97,199)

Non-BCS schools N/A (249,946)
(no football)

Total 3,804,946 1,042,541

 Average profit/(loss)

 Women's Overall
 basketball athletic
 program
BCS schools (1,244,778) 1,913,605

Non-BCS schools (417,274) 209,326

Non-BCS schools (393,974) (95,011)
(no football)

Total (666,735) 670,596

 Number of profitable sports and
 athletic programs

 Football Men's Women's
 basketball basketball

BCS schools 45 46 3

Non-BCS schools 20 30 12

Non-BCS schools N/A 13 6
(no football)

Total 65 89 21

 Number of profitable
 sports and athletic programs

 Overall Number of
 athletic schools in
 program sample
BCS schools 37 51

Non-BCS schools 59 81

Non-BCS schools 21 34
(no football)

Total 117 166

Table 3. Generated Revenues Minus Total Expenses

 Average profit/(loss)

 Men's
 Football basketball

BCS schools 10,782,886 3,683,066

Non-BCS schools (1,479,385) (335,991)

Non-BCS schools N/A (578,936)
(no football)

Total 3,258,310 849,020

 Average profit/(loss)

 Overall
 Women's athletic
 basketball program

BCS schools (1,339,599) (2,214,563)

Non-BCS schools (669,823) (7,716,253)

Non-BCS schools (683,668) (5,802,761)
(no football)

Total (878,433) (5,634,055)

 Number of profitable sports and
 athletic programs

 Men's Women's
 Football basketball basketball

BCS schools 45 47 2

Non-BCS schools 6 13 2

Non-BCS schools N/A 3 0
(no football)

Total 51 63 4

 Number of profitable sports
 and athletic programs

 Overall Number of
 athletic program schools in sample

BCS schools 15 51

Non-BCS schools 0 81

Non-BCS schools 0 34
(no football)

Total 15 166

Table 4. Generated Revenues Minus Contributions and Total Expenses

 Average profit/(loss)

 Men's
 Football basketball

BCS schools 6,459,018 2,879,478

Non-BCS schools (1,723,945) (457,486)

Non-BCS schools N/A (629,084)
(no football)

Total 1,437,655 532,579

 Average profit/(loss)

 Overall
 Women's athletic
 basketball program

BCS schools (1,599,743) (13,860,441)

Non-BCS schools (698,906) (9,234,404)

Non-BCS schools (695,739) (6,560,890)
(no football)

Total (975,020) (10,108,069)

 Number of profitable sports and
 athletic programs

 Men's Women's
 Football basketball basketball

BCS schools 41 45 1

Non-BCS schools 5 9 0

Non-BCS schools N/A 3 0
(no football)

Total 46 57 1

 Number of profitable sports
 and athletic programs

 Overall Number of
 athletic schools in
 program sample

BCS schools 1 51

Non-BCS schools 0 81

Non-BCS schools 0 34
(no football)

Total 1 166

Table 5. Generated Revenues Minus Expenses with Allocated
NonProgram Specific Items

 Average profit/(loss)

 Men's Women's
 Football basketball basketball

BCS schools 9,453,284 3,406,382 (1,580,699)

Non-BCS schools (1,956,924) (406,460) (737,636)

Non-BCS schools N/A (678,572) (772,778)
(no football)

Total 2,451,566 709,221 (1,003,847)

 Average profit/(loss)

 Overall
 athletic
 Other program

BCS schools (13,506,756) (2,214,563)

Non-BCS schools (4,615,542) (7,716,253)

Non-BCS schools (4,345,706) (5,802,761)
(no football)

Total (7,291,912) (5,634,055)

 Number of profitable sports and
 athletic programs

 Men's Women's
 Football basketball basketball

BCS schools 46 45 2

Non-BCS schools 3 9 1

Non-BCS schools N/A 2 0
(no football)

Total 49 56 3

 Number of profitable sports and
 athletic programs

 Overall Number of
 athletic schools in
 Other program sample

BCS schools 0 15 51

Non-BCS schools 0 0 81

Non-BCS schools 0 0 34
(no football)

Total 0 15 166

Table 6. Generated Revenues Minus Expenses Excluding Student Aid

 Average profit/(loss)

 Men's Women's
 Football basketball basketball

BCS schools 12,698,494 3,998,707 (998,758)

Non-BCS schools (391,532) (110,380) (443,750)

Non-BCS schools N/A (335,679) (434,022)
(no football)

Total 3,710,296 1,105,905 (612,272)

 Average profit/(loss)

 Overall
 athletic
 Other program

BCS schools (4,155,408) 4,060,957

Non-BCS schools (1,584,667) (4,494,767)

Non-BCS schools (1,429,422) (3,962,866)
(no football)

Total (2,342,676) (1,757,258)

 Number of profitable sports and
 athletic programs

 Men's Women's
 Football basketball basketball

BCS schools 49 49 3

Non-BCS schools 16 20 1

Non-BCS schools N/A 3 0
(no football)

Total 65 72 4

 Number of profitable sports and
 athletic programs

 Overall
 athletic Number of schools
 Other program in sample

BCS schools 1 41 51

Non-BCS schools 0 3 81

Non-BCS schools 0 0 34
(no football)

Total 0 44 166