Business is good for football eliteBy STEFAN STEVENSON
Fort Worth Star-Telegram
December 19. 2013 12:16AM
Like almost everything else in life, the cost of doing business continues to rise.
Nowhere is that more prevalent than in big-time college football, where 38 schools spent more than $20 million on their programs last year. Alabama led with more than $41 million in expenses, according to information obtained from the Department of Education. Auburn was second with $36 million.
Spending on football more than doubled between 2005 and 2012, according to data from the Knight Commission on Intercollegiate Athletics and the Education Department. A big reason for the increase: coaches' salaries.
Adjusted for inflation, the median salary per player jumped 45 percent between 2005 and 2011, according to the Knight Commission, while education spending per student increased 3 percent during the same period.
Fifty coaches are paid more than $2 million per year, according to USA Today.
On Friday, Alabama coach Nick Saban agreed to a contract extension that will reportedly pay him between $7 million and $7.5 million per year. The day before, Texas A&M gave coach Kevin Sumlin a six-year extension worth $5 million a year. In November, Baylor coach Art Briles agreed to a 10-year extension that will reportedly pay him $4 million per year.
"The athletic spending is rising, in many cases rapidly, while academic spending is stagnating," said Amy Perko, the executive director of the Knight Commission. "Those kinds of patterns are not in the best long-term interest of universities, nor is it in the best interest of the collegiate model."
The Knight Commission was formed in response to the college sports scandals of the 1980s to recommend reforms that emphasize academic values "in an arena where commercialization of college sports often overshadowed the underlying goals of higher education."
Perko said the commission has long held concerns about the growth of coaches' salaries.
"It's a fact that it has been a big factor in the athletic spending growth rate that we know have been growing much more quickly than academic spending at institutions in NCAA Division I."
But for most of the big spenders, the return on their investments is more than enough to legitimize the top-shelf coin being tossed around.
The Crimson Tide made a nifty profit of $47 million in 2012, and that's not even good for top five in the country. Texas again leads the nation with an $81 million profit in 2012 on $109 million in revenue, surpassing its record $103 million in 2011.
The chasm between the haves and have-nots continues to grow, and it shows in the BCS Top 25 rankings, where all but two schools — No. 20 Fresno State and No. 23 Northern Illinois — spent at least $15 million on their football programs in 2012.
The expenses include everything from travel and coaches' salaries to tuition, room and board for 85 scholarship athletes. And for the big boys, it's a drop in the bucket compared to the profits their programs bring in.
Seventeen schools reported profits of $30 million or more for 2012. Five made more than $20 million.
In all, 46 schools reported earnings of at least $10 million from football in 2012, and 81 of 122 Football Bowl Subdivision schools reported a profit. But 33 schools broke even or lost money on football.
"Am I worried about the cost of it? Yes, but only in the sense that I'm worried about the cost of everything," TCU chancellor Victor Boschini said. "I'm just a worrier in general. I want everything to cost less, not more. But I don't think that's ever going to happen."
Surprised to see TCU ranks fifth in the nation in football expenses? Don't be. The school's $43,000 tuition is one of the reasons why TCU spent $31 million on football. That comes to $234,580 per player, with 133 players reported on its roster, including 85 on scholarship. Only six schools spend more per player than TCU, including Notre Dame, which leads the country at $302,554 per player.
TCU's profit of $1.3 million is likely to increase as the Horned Frogs begin to earn a full share of the Big 12 television revenues in 2015.
Boschini said the economic impact of moving from the Mountain West two years ago was an obvious benefit.
"I didn't want us in the Big 12 because of the revenue, and some people disagree with this," he said. "I got in the Big 12, if you ask me personally, because we're natural rivals with those teams. The fact that we'll make more money by being in Big 12 sure didn't hurt, but it really wasn't, at least for me, a motivating factor."
What does a $31 million football program say about TCU?
"I think it says we have been willing to make an investment in Division I athletics at the highest level, and we feel like it is a big part of what is happening at our university, in general, for what we're offering our students," Boschini said.