Discussion and publicity about our new book from Stanford University Press, 2013.

Saturday, August 17, 2013

Chapter 1. Revenue Sports Pay for Nonrevenue Sports

Hi all.  Rod here.

When we can, we'll use what we see going on right now on the web and in the twitterverse to motivate our presentation of chapters from our book, 15 Sports Myths and Why They're Wrong.  We'll do our best to respond to your posts but don't be surprised when most of our responses are, "We cover that in the chapter.  Go buy the book."

I'll kick things off with Chapter 1, "Revenue Sports Pay for Nonrevenue Sports."  From the chapter:

"It's an old adage that without the top men's revenue programs--football and basketball--there would be no athletic department.  The idea is that the AD spends any excess of revenues over costs in these sports on all of the other programs.  Ipso facto, as football and men's basketball revenue goes, so goes the economic fate of the athletic department."

This is pure myth and easily busted using the data reported by member departments to the NCAA and by individual programs to the Office of Post Secondary Education for Title IX purposes (we know, there are accounting inconsistencies, but that's what there is).  Statements are about the most recent data at the time of our writing, the 2010-11 school year.

First, how many departments actually had net revenues (after costs) for football and mens basketball?  The answer is that such is the exception rather than the rule (read the book for the precise results).  This is not opinion, but simple observation from data available to everyone.

Second, how many departments even have net deficits on the rest of their sports?  This answer is sure to surprise--at 39% of reporting departments the rest of the sports don't even run a deficit! At three of these  departments, the rest of the sports (combined) actually generate their own surpluses over $1 million!

Of the remaining, how many can cover the deficit from the rest of the sports by net men's sports revenues?  The answer is 54 departments, barely a majority of the subset we've defined--those that both have positive net football and men's basketball revenues and the rest of their sports do not at least break even.  And you might be able to guess which FBS departments dominate this list (if not, read the book).

And what about the FCS schools?  The myth takes a true and brutal beating at these departments and that is (in our opinion) some of the most fun reading in the chapter.

Of course, one of our main objectives is to point out who wins as long as this myth continues to carry the day in college sports.  The answer may surprise and (we hope) enlighten you.

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