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Final-Four basketball is a scam

Turns out that the universities that get to the Final Four not only don't make a lot of money from it, they actually lose money as a reward for making it that far. This puts the lie to the notion that sports brings in money to a college: Sure they do! But they often lose more than they bring in.

Final-Four universities are obliged to buy 400 hotel rooms, spend $32,000 on a party in a local convention hall, and much more. They also only get to buy a small number of tickets, so they end up having to pay top dollar to see the games.

The University of Texas lost $130,000 on their last Final Four appearance. On the bright side, it's possible that they might make it up later through merchandise and such.

Once again: Why do educational institutions have sports programs?



( 18 comments — Leave a comment )
Apr. 4th, 2008 09:54 pm (UTC)
Merchandise. Yes, I suspect many of the t-shirt tents I've seen up this week are not official, but KU is making a killing off of the licensed stuff. One of the reasons why I stick to my 18 year old tank top, and will not replace it.
Apr. 4th, 2008 10:21 pm (UTC)
My (undergraduate) college did not. We were all very happy, and now the school is bankrupt. I did my Master's at the University of Kentucky. They occasionally have been known to dabble in basketball. There was a bit of noise while I was there about
A: More scholarship money going to people who did well in sports than to people who did well academically.
B: A member of the dressage team (yes, they had one! Hey, they're in Lexington. The people of Lexington, KY have also been known to dabble in riding occasionally.) anyway, member of the dressage team qualified for the national championships. She and the coach put in a request for some relatively small amount of money (Less than $2000, I think) to transport themselves and the horse to said championships. It was turned down. It was widely believed by the students that this was because she was, you know. One of those. No, not a horse-back rider. One of those... those people who don't matter so much in sports? What do you call them again? You know, they look a lot like Real Athletes, but they're smaller and a funny shape?
Apr. 4th, 2008 11:05 pm (UTC)
The money for NCAA Division 1 football teams from the big 3 networks, ESPN, and Fox Sports, is huge.

Here's an example. At Notre Dame, football television contract revenue and many other University gifts and investments have resulted in undergraduate scholarship endowment growing from $88 million in 1988 to more than $727 million as of September 2003.

Plus, the loss of the monies the universities are forced to pay at the Final Four, is partially balanced by their shares of their respective NCAA organizations' television contracts. While basketball isn't the revenue powerhouse football is, it still isn't chicken feed.

Notre Dame may not be the best case to use as an example of college sports revenue, since they aren't part of a conference, and due to their reputation probably receive a bigger than average contract. However, don't for a moment think that the Big 10 and Big 12 don't get extremely large contracts. In fact, according to what I've read each Big 12 university receives over 4 million dollars on average annually. That of course, is adjusted due to individual demographics for each member university. Also keep in mind that the Big 12's tv contract is second only to the Big 10's. In 2010, that contract will get re-negotiated or extended. With KU's consistent appearances in the NCAA tournament, and their recent football performance, expect their share of the Big 12 contract to increase.
Apr. 5th, 2008 12:06 am (UTC)
Yeah ... merchandise is a big one, but also many potential students are influenced by the prominence of a university's sports teams. If someone is into sports and are just looking to get a piece of paper for their wall, they want to go to a school that has a "winning" team. Even if you're not into sports, having that association can be a networking tool once you've entered a career.

It also winds up being a promotional tool for the school. Having your school mentioned in the news or with broadcast sporting events is advertising for the school. They might lose money on the game, but every one that is broadcast is hour or more of advertising for the school, and on TV that amounts to a large dollar value.

"Hey, look at us! We're number one! Please pay us hundreds of dollars per credit hour so you can be number one too! (Foam fingers and face paint are available at the booth to your left for an additional charge)"

Personally, I never got the whole fascination with sports. I even let a roommate drag me to a hockey game once, just to give it a chance. I fell asleep.
Apr. 5th, 2008 01:20 am (UTC)
I heard once that at most Division I colleges basketball breaks even, and football makes enough money to pay for the rest of the sports budget.

It's probably true that the Final Four expenses, taken by themselves, exceed the revenue specifically from the Final Four, but the other revenue thus generated -- not just merchandise but increases in donations from boosters -- still, I imagine, makes a Final Four appearance a huge win.

You have a rooting interest this year, Chris, right? I'm rooting for Kansas myself, because I still like Bill Self even though he left Illinois -- in a way that might have helped Illinois make its final game a couple of years ago ... in many people's eyes having Bruce Weber coach a team mostly recruited by Bill Self is pretty much the best of both worlds.

Apr. 5th, 2008 01:36 am (UTC)
Well, I'm still trying to figure out why someone donated a couple of million dollars for a fountain at the University of Cincinnati. A fucking fountain? Are you serious?

Like four years later they were cutting foreign language programs.
Apr. 5th, 2008 02:35 am (UTC)
Fountain? Really? I've never seen a $2,000,000 fountain. well-managed, that would provide scholarships for quite a while. Or, you know, they could've given it to some bankrupt school....
Apr. 5th, 2008 05:44 am (UTC)
Also, sports games keep (some of) the alums interested and that pulls in the donor money.
Apr. 5th, 2008 10:35 am (UTC)
I went to University of Nebraska. Basketball pretty much paid for itself. Football paid for itself in a lavish way, with plenty left over for subsidizing other competitive sports well enough to keep a lot of the "minor sports" near the top of the ranks nationally (at the time; I haven't paid attention in decades), and more money left over to pay for regular-student sports. Some sports-driven revenues even went into the general fund; I think merchandising money is general income, for example. Sports inspired alumni donations, often sports-related, but fairly often non-sports. Sports excited the non-university population of the state, which sometimes helped the university get more state funding, although sometimes the sports money was used as an excuse to cut state funding.

So although I'd like to think of universities as being about academics, it's nice that they're able to help the school as a whole.

Story inspired by the general topic:
Once I went to an alumni event. The guest of honor was some university official, who made a speech. After the speech, he did a question-and-answer session. My question was about whether the the then-recent expansion of the Big Eight to the Big Twelve was strictly a sports association, or if the academic side of the alliance would expand to the four newly-added schools too. His reaction seemed to be a restrained thought along the lines of, "What the hell is someone doing asking a non-sports question at an alumni event?" When he regained his composure, he confessed to not knowing the answer. The guy was a big-time university official, and he had no idea.

Apr. 5th, 2008 01:09 pm (UTC)
I despise college sports. The only other reason (and potentially bustworthy myth) I can think of is that it boosts enrollment.
Apr. 6th, 2008 04:31 am (UTC)

I would think it would be very amusing to hear of a school turning down its slot in the final four if it couldn't fund the trip. But if the figures you mention are correct, it could probably happen, especially if it was a small school that doesn't usually perform well and so doesn't have the normal revenue from licensing and outside funding that the big name schools have.

I've questioned some of the aspects of how college sports are handled as well. When I was in school and volunteering at KJHK setting the radio station up to do online broadcasting, there was a lot of static because the sports department did not want KJHK broadcasting sports commentary of the games which would compete with the exclusive broadcasting that the sports department does. Of course at the time, I thought "WTF, its the student radio station, why doesn't the sports department just let KJHK handle the broadcasting."

I'm betting the actual amount of money that the sports department shells out and brings in is probably pretty obscene, especially compared to other departments on campus, in fact, if I actually saw the figures, I would probably throw-up.

(Deleted comment)
Apr. 8th, 2008 02:19 am (UTC)
Yes. I hear the Caltech football team generates tons of money when they play the Pasadena fire department. And who would have heard of Caltech otherwise?
Apr. 7th, 2008 07:56 pm (UTC)

Because it starts in elementary school with kickball and T-ball, doesn't it?
Get the parent$$ involved.

.. and quit being a party-pooper ;)

Apr. 7th, 2008 08:00 pm (UTC)
Oh, I'm still enjoying these final games and will be watching tonight, but I frequently am irritated about how much university energy is expended on a program that has nothing to do with education.
Apr. 8th, 2008 02:23 am (UTC)
I'm not sure it really does generate more income than is expended, even with trademarked merchandise and alum donations. Coaches earn obscene amounts of money, and sports arenas require a lot of upkeep. I'd like to see some accounting that spells out the actual income vs expenditures for these things. It may very well be right, and I'm sure there are some other reasons to have sports on campus, but I remain skeptical without the actual figures.
Apr. 7th, 2008 09:36 pm (UTC)
I am getting the hell out of town the second I can and staying away till noon tomorrow. After the hell of living downtown and hearing from coworkers this morning about how people were in crowds and climbing on cars up to 5 blocks out from Mass Street on Saturday night? I am positive that I don't want to have anything to do with it tonight. *shudder*
Apr. 7th, 2008 09:38 pm (UTC)
I can completely understand that. We didn't head home until almost 2am due to the impassible downtown area.

Now, if they lose, traffic might be fine. I'm mostly worried about class absences tomorrow....
( 18 comments — Leave a comment )

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