In an NCAA environment where sports gambling is seeing legalization, the use of player likeness is changing very soon and the budgets for all these schools will be changing soon to adjust for all of these unforeseen changes. With that, it’s worth it to take a look at how expenses and revenues have changed over time in the past. For starters, let’s take a look at the University of Nebraska-Lincoln’s expenses since 2005:
As seen above, UNL’s expenses have steadily risen over the time frame of 2005-2018. Keep in mind that this data doesn’t factor in new coaching hires like Scott Frost, Bill Moos, Fred Hoiberg, who make several million dollars more than their predecessors, Mike Riley, Shawn Eichorst and Tim Miles, respectively. This is to say that if there was access to the 2019 data, there would be an even bigger jump in expenses from 2018 to 2019. Even without that data, there is still a clear consensus that UNL quite literally spared no expense in trying to make their football and basketball programs competitive again.
With that, how has Nebraska’s revenue fared during the same time period? Have these increased expenses lead to increased revenues? Let’s see:
It’s a lot less of a jump than the expenses, which brings some cause for concern. A significant figure to draw your attention to would be the dropping number of contributions to Nebraska Athletics. This is likely due to the 2017 changes in the tax code that have made contributions to college athletics no longer tax-deductible. UNL still receives contributions from other sources, mainly its wealthy donors, but it’s safe to assume donations from the middle class have dropped because of the eliminated tax incentive.
Next, let’s look at the overall NCAA. While these expenses come from sources other than just football, let’s compare a school’s expenses from last year with the number of wins its team won in football last season:
An interesting takeaway here is that most of the schools NOT in the Power 5 (Big Ten, Big 12, Pac-12, ACC, and SEC) have remarkably similar budgets within their conferences. The MWC, MAC, Sun Belt and CUSA all have low budgets in a similar range. However, three out of the five Power 5 conferences have a massive range of budgets, especially in the Big Ten and Big 12 AND it appears that the schools with higher budgets are winning MORE. This relationship doesn’t hold in the ACC or Pac-12, however.
If we take a closer look at the Big Ten, what is that school on the top of wins and expenses? Can you guess? “THE” Ohio State sits at the top. This is especially interesting given that OSU has only improved in football; it has one of the best teams in the country and had the second-highest budget in the NCAA last year? Coincidence?
What about the Big 12? That would be our friendly Texas Longhorns on the top. They lead the conference and the entire country in expenses. Does that means Texas is BACK?! Maybe we spoke too soon…
Let’s take a look at one other financial figure: profit. These aren’t exact profits. Still, doing a simple calculation of what we had available (total revenues and total expenses were available, so profit = TR – TE), we can take a look and see if profits are related at all to football wins from last season.
It’s surprising to see, first of all, so many teams operating at or below zero, especially when the school at the bottom is UC-Berkeley. Again, the revenues are likely understated in the available data, so that is something important to keep in mind. Generally, we DO see a relationship here, especially with our top profit performers (Georgia and Texas A&M). Both of these teams a year later are still ranked going into this weekend of football, where they’re, oddly enough, playing each other.
While there were several caveats in this analysis, it’s still useful looking at a baseline for many schools’ budgets and revenues and seeing how it compared to the football team’s performance this past season. With expenses continuing to rise, especially with coaches’ salaries increasing exponentially and college players profiting off their likeness in the coming years, it’ll be interesting seeing how the schools will adjust.
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