Chip Scoggins: As college athletics revenue soars, so does spending

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per Chip:

The Big Ten doled out $30.9 million apiece to its members this year, including $7 million strictly from Big Ten Network revenue, a figure that will get blown out of the water when a new TV contract takes effect in two years.

Early projections indicate that every Big Ten school will receive $44.5 million annually from the conference.

And yet …

“When you hear about the numbers,” said Gophers athletic director Norwood Teague, “the perception is that we’re rolling in the dough, and we’re not.”

Asked if he worries about TV revenue leveling off at some point, Teague said, “I hope not, because our costs are rising rapidly every year.”

That component doesn’t get as much attention. In 2006, the Gophers athletic budget was $54 million. Their budget this year is $105 million.

http://www.startribune.com/as-college-revenue-at-u-and-elsewhere-soar-so-does-spending/310548681/

Go Gophers!!
 

They are rolling in the dough. If they don't spend their money wisely, that's their fault. Teague's "costs are rising rapidly every year" is based on what? Tuition has NOT been rising rapidly (and tuition is an accounting gimmick - the U pays itself tuition). Health care, travel, etc., even coaches salaries outside the big 2 are not rising that rapidly. All these new facilities they want are being paid for with donations.

Chip didn't dig into the numbers at all to find out what they're spending their money on, but I'd really like that analysis. The top line numbers are this: "In 2006, the Gophers athletic budget was $54 million. Their budget this year is $105 million." That's nearly double in 9 years. I'm genuinely interested in a breakdown of how they're spending all this extra money.
 

Golden Elephant said:
They are rolling in the dough. If they don't spend their money wisely, that's their fault. Teague's "costs are rising rapidly every year" is based on what? Tuition has NOT been rising rapidly (and tuition is an accounting gimmick - the U pays itself tuition). Health care, travel, etc., even coaches salaries outside the big 2 are not rising that rapidly. All these new facilities they want are being paid for with donations.

Chip didn't dig into the numbers at all to find out what they're spending their money on, but I'd really like that analysis. The top line numbers are this: "In 2006, the Gophers athletic budget was $54 million. Their budget this year is $105 million." That's nearly double in 9 years. I'm genuinely interested in a breakdown of how they're spending all this extra money.
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Not an accounting gimmick. The athletic department actually pays the University the full tuition. At the U that tuition is allocated 75% to the college offering the course the student is taking and 25% to the college of enrollment. There's nothing fake about the tuition paid by the U of M athletic department.

As for the growth in spending, keep in mind that they now run a football stadium that they previously did not. In addition coaches salaries, scholarship costs, meal costs, recruiting costs, etc., have all increased. It's easy to say that it almost doubled, but that's really a 7.7% annualized compounded growth. Above the rate of inflation for sure, but 7.7% per year doesn't seem quite as dramatic.
 

year of the gopher said:
Not an accounting gimmick. The athletic department actually pays the University the full tuition. At the U that tuition is allocated 75% to the college offering the course the student is taking and 25% to the college of enrollment. There's nothing fake about the tuition paid by the U of M athletic department.

As for the growth in spending, keep in mind that they now run a football stadium that they previously did not. In addition coaches salaries, scholarship costs, meal costs, recruiting costs, etc., have all increased. It's easy to say that it almost doubled, but that's really a 7.7% annualized compounded growth. Above the rate of inflation for sure, but 7.7% per year doesn't seem quite as dramatic.
Click to expand...

So if I say i give my kid $1000 allowance and then charge him $1000 in rent and he never sees the cash it's not a gimmick? They can't be one institution when we talk about federal funding, etc and then suddenly they are separate entities when it comes to tuition. The couple hundred scholarship kids have slightly more impact in added student cost to the University as my cable company has added cost to add me as a subscriber.

What isn't stated and is how much did overall revenue go up in the same period. Big ten revenue is 44 million per year now, what was it in 2006? How much have other revenue streams increased over that time? Both numbers are going up. Thanks (Chip)captain obvious... maybe you could offer up which is going up faster instead of taking Teague's "we're not rolling in dough" at face value.

Talking about how fortunate they are that the money went up to cover there rising costs is B.S., the money went up and they spent every dime they took in plus some, that's how they budget.
 

In 2011 Pam Borton made $509,197. How much would we have paid her if the program lost less than the $3 million a year it loses on average?

It looks like multiple coaches and administrators got big salary bumps up to 22% between 2012 and 2013. Might have been more than a few parting gifts from Maturi? http://extra.twincities.com/car/salaries/default.aspx
 


LakerFan said:
So if I say i give my kid $1000 allowance and then charge him $1000 in rent and he never sees the cash it's not a gimmick? They can't be one institution when we talk about federal funding, etc and then suddenly they are separate entities when it comes to tuition. The couple hundred scholarship kids have slightly more impact in added student cost to the University as my cable company has added cost to add me as a subscriber.

What isn't stated and is how much did overall revenue go up in the same period. Big ten revenue is 44 million per year now, what was it in 2006? How much have other revenue streams increased over that time? Both numbers are going up. Thanks (Chip)captain obvious... maybe you could offer up which is going up faster instead of taking Teague's "we're not rolling in dough" at face value.

Talking about how fortunate they are that the money went up to cover there rising costs is B.S., the money went up and they spent every dime they took in plus some, that's how they budget.
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Except that in reality how it works is that you never actually give your kid an allowance, you just charge him rent. The university does not hand out anything to have scholarship athletes. It's as if the Athletic department are the kids parents fronting the full tuition themselves. The non-athlete students at the U do not subsidize the athletes. That may not be the way it worked in the past, but it is how it works now.
 

LakerFan said:
So if I say i give my kid $1000 allowance and then charge him $1000 in rent and he never sees the cash it's not a gimmick? They can't be one institution when we talk about federal funding, etc and then suddenly they are separate entities when it comes to tuition. The couple hundred scholarship kids have slightly more impact in added student cost to the University as my cable company has added cost to add me as a subscriber.

What isn't stated and is how much did overall revenue go up in the same period. Big ten revenue is 44 million per year now, what was it in 2006? How much have other revenue streams increased over that time? Both numbers are going up. Thanks (Chip)captain obvious... maybe you could offer up which is going up faster instead of taking Teague's "we're not rolling in dough" at face value.

Talking about how fortunate they are that the money went up to cover there rising costs is B.S., the money went up and they spent every dime they took in plus some, that's how they budget.
Click to expand...

Your analogy is nonsense when you consider how fund accounting works in public sector organizations. Think about the University instead like a large holding company like Berkshire Hathaway. It is one entity but has many subsidiaries. Occasionally it infuses cash into those subsidiaries to prop them up but each is responsible for its own budget. When Athletics pays a scholarship, it is essentially transferring that money to another subsidiary (say the College of Liberal Arts or Carlson School of Management). To the U, yes, it's an internal transfer and shows up in what to Berkshire Hathaway would be consolidated financial statements. To Athletics, it is actually money out the door. Trust me, I know what I'm talking about on this. This is how it works. The U is not just a big entity with a big bank account and can slosh the money around however it sees fit. The mandates of state and federal governments and generally accepted accounting practices for public entities preclude that.
 

year of the gopher said:
Not an accounting gimmick. The athletic department actually pays the University the full tuition. At the U that tuition is allocated 75% to the college offering the course the student is taking and 25% to the college of enrollment. There's nothing fake about the tuition paid by the U of M athletic department.

As for the growth in spending, keep in mind that they now run a football stadium that they previously did not. In addition coaches salaries, scholarship costs, meal costs, recruiting costs, etc., have all increased. It's easy to say that it almost doubled, but that's really a 7.7% annualized compounded growth. Above the rate of inflation for sure, but 7.7% per year doesn't seem quite as dramatic.
Click to expand...

There are too many facts and not enough ridiculous, hyperbolic anti-Teague ranting in your responses. Careful.....that may cause his (and perhaps some other anti-Teague minions) minds to explode in disgust. :)
 




Same thing happened with universities in general: loan-fueled tuition revenue skyrocketed, but so did building projects, salaries, bureaucracy, expansion.
 



MNGoldenGophers1 said:
It's an arms race. The question is whether it sustainable?
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Long term it can't be. But if we want to be in the game, we gotta play the game. I don't know how some schools, even some in major conferences, will be able to sustain it.
 



Golden Elephant said:
They are rolling in the dough. If they don't spend their money wisely, that's their fault. Teague's "costs are rising rapidly every year" is based on what? Tuition has NOT been rising rapidly (and tuition is an accounting gimmick - the U pays itself tuition). Health care, travel, etc., even coaches salaries outside the big 2 are not rising that rapidly. All these new facilities they want are being paid for with donations.

Chip didn't dig into the numbers at all to find out what they're spending their money on, but I'd really like that analysis. The top line numbers are this: "In 2006, the Gophers athletic budget was $54 million. Their budget this year is $105 million." That's nearly double in 9 years. I'm genuinely interested in a breakdown of how they're spending all this extra money.
Click to expand...

Your questions are well thought out. The answer is that much of it is nonsense.
 


These numbers are from FY 2013-2014. Jerry kill is set to make 2.1 guaranteed with myriad incentives. The Dick is set to make an additional 400k for "market reasons" per Teague. Sometimes it is cheaper to keep an underachiever on board than to do a new job search.

Then there is Pam Borton. Now why on God's green earth is a women's basketball coach being paid 500K? The women's basketball program lost over 3MM last year. Her salary was over double the ticket revenue.


Men's sports

Richard Pitino - basketball - $1,605,165

Jerry Kill - football - $1,536,154

Don Lucia - ice hockey - $431,231

John Anderson - baseball - $213,590

J. Robinson - wrestling - $185,343

John Carlson - golf - $83,878

Geoff Young - tennis - $80,078

Women's sports

Pam Borton (no longer coach) - basketball - $553,462

Hugh McCutcheon - volleyball - $287,231

Brad Frost - ice hockey - $220,115

Stefanie Golan - soccer - $102,500

Jessica Allister - softball - $100,910

Meg Stephenson (since resigned) - gymnastics - $100,804

Chuck Merzbacher - tennis - $87,200

Michele Redman - golf - $77,814

Wendy Davis - rowing - $81,182

Both men's and women's

Steve Plasencia - track and field/XC - $235,009

Kelly Kremer - swimming and diving - $211,016

Other programs to read about:
 


Richie makes more than Kill? If that's true that's just plain wrong. Wow, that surprises me.
 


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