Introduction
The amount of money that the Big 12 of the Football Bowl Subdivision (Division 1-A conferences) generates is staggering. This amount is predicated on the figures computed by the US Department of Education under athletics financial records for the year 1 July 2009 to 30 June 2010. The staggering amount emanates from the fact that college football has been given the highest priority amongst all other college sports, according to Howard and Crompton (51). The prioritization is evidenced in the number of football scholarships that must be offered by any division I team, which is a maximum of 85 full scholarships in which 90% must be in any given season, and the attendance crowd the teams must attract per game is 15000, throughout the year. Therefore, this essay describes the financial dynamics of college sports by examining revenues, midpoints, expenditure, profits, and deficit mitigation measures.
Total Revenue
A comparison done by Dosh on the biggest football revenue generators for the same conference shows that the University of Texas ranked the highest at $21 million more than Alabama, the previous highest among the SEC, Big Ten, ACC, and Pac-10 (par. 1). University of Texas’ football revenue is the highest amongst the Big 12, at $93.9 million, which is 39.7 million more than the second-placed University of Oklahoma. The figure for Texas is concomitant with what Howard and Crompton had earlier that it generates $93.9 million in total revenue (52). Baylor University closes the Big 12 log at $14.4 million. The huge disparity between the highest school and lowest school is also in agreement with Howard and Crompton’s range of over $80 million (57). A score between the conferences, puts Big 12 at position 3 with $35.4 million, behind SEC and Big Ten with $49.9 million and $40.6 million respectively.
Midpoints
Dosh states that the top four teams in the Big 12 elevates the conference in a manner she did not encounter in the aforementioned conferences previously covered (par. 3). This statement is based on computed midpoints, instead of averages, that places the Big 12 at the second position with $38.7 million, which is $14.7 million adrift of leader SEC (Dosh par. 4). However, when midpoints are used in place of averages, a downward trend for the Big 12 is seen. Baylor University of the Big 12 comes in at last. Plausible explanations for this, according to Dosh, include the fact that only four schools, Vanderbilt, Maryland, Wake Forest, Washington State of the SEC, Big Ten Pac-10, and ACC respectively, rake in amounts less than Baylor University (par. 7). Another contributor is the fact that the Big 12 has four teams generating less than $20 million. Eleven teams from the SEC, ACC, and Big Ten, combined, are at par with the Big 12 on the midpoint. Towards the head end of the rankings, the SEC and Big Ten have ten teams that exceed the $50 million mark compared to Big 12’s two teams at the $50 million mark. The midpoint values reflect the difference between total revenue and losses. This tumbling down, with respect to midpoints, is in line with what Howard and Crompton observed in all other college sports across divisions 1 to 3 (55).
Expenditure
In terms of expenditure, the University of Texas still maintains pole position ($25.112 million), followed by the University of Oklahoma ($20.15 million). The notable change is Baylor University ($12.462 million) that is replaced by the University of Kansas at the bottom with $11.158 million. An inter-conference expenditure comparison by Dosh places the Big 12 at the fourth position, with $15.8 million, among the five conferences analyzed so far, which is $4.2 million behind leaders SEC (par. 6). Though the University of Texas is the biggest Big 12 spender, it trails SEC and Big ten. This puts it even behind the first three spenders in the SEC, who have won three of the last four championships (Dosh par. 6). Texas is only re-investing 27% of its total revenue in football compared with Baylor University putting 87% of its $14.36 million total revenue. The re-investment has the implication of having less money to run other sports. Howard and Crompton observe that both revenue and expenditures for all division I to III sports increased steadily from 2004 to 2010 (56). Despite the increments, expenditure, mostly outweighed revenues except in 2010, when the expenditure was less than revenue by 1.6 %.
Profits
In the aspect of profit, the log is similar to expenditure, with the University of Texas coming in at first with $68.83 million and Kansas State with $1.6 million. Profits for Texas reflect what Howard and Crompton had predicted (63). Comparatively, Dosh states that Kansas exhibited extravagant expenditure on football, which made them rank last in profits, despite coming in at number ten in revenue and five in expenses. A comparison of revenue and expenses reveal no change in the position of the top four teams. Baylor University showed no profits as Dosh speculates that it is operating at on deficit, courtesy of funds they outsource from other areas to show a break-even status (Dosh par 5). The speculation was in sync with observations in the other conferences where schools were unwilling to show any deficits but eager to show a break-even status. These findings confirm a sad reality as Howard and Crompton posit that only a handful, about 20% of collegiate sports, football included, are operating on a positive budget (55). This situation has in turn led sports teams to depend on the respective institute’s subsidies to attain a break-even basis.
Deficit mitigation
Despite the financial trying times, Howard and Crompton observe growth in total revenues generated in all the three division sports from 2004 to 2010 due to football as the contribution raised to about 45% in 2010 (62). The authors also claim that Big 12 and Big ten produce greater than $70 million in income, the highest of any college sports team. Dosh states that the Big 12 would improve their numbers, courtesy of television contracts that would pump in over $60 million (par. 7). Howard and Crompton stipulate that in 2011, the University of Texas partnered with ESPN to launch a television network called Longhorn Network that would feature, for the first time, sports programs from a single athletic department, earning it $12 million per year for the next 15 years. This partnership widened the gap between the rich teams such as Texas and the poor teams. Television deals would help reverse the tendency to channel funds meant for other institutional areas into sports, something that Howard and Crompton describe as risky, especially after the recession that resulted in the Government cutting back on the funds they remit to academic institutions.
Conclusion
College football is a big business. Despite the astronomic revenues they generate, the highest of any college sport, they also have hefty expenditures that result in the majority of the FBS teams operating at losses. Therefore, there is a need to strike a balance between the total revenue and total expenditure. Average performing and least performing teams also need a boost, in the form of equal television coverage to the best performers. This boost would reduce the gap between the privileged schools such as Texas and the less privileged ones.
Works Cited
Dosh, Kristi. “Who’s making money in Big 12 football?” Forbes. 2011. Web.
Howard, Dennis, and John Crompton. Sports Financing. New York: Fitness Information Technology, 2014. Print.