'Power Five' Membership no Guarantee

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The Washington Post in an article, Playing in the Red, featured 28 schools in the 'Power Five' Conferences (Pac 12, SEC, ACC, Big 12, Big 10) that are hemorrhaging cash in their athletic departments. Among those losers -  CU, Louisville, UCLA, Wisconsin, Cal, & Florida State. The issue is not revenue as each of the schools receive a huge influx of cash but, rather, an increasing outflow of cash, especially to support football and related facilities.

The biggest increase in spending goes to Oregon moving from $48.7M to $193.9 in 10 years - thanks to Phil Knight and a surging football program. And, Oregon does not run a deficit. Neither does Oklahoma State that moved from $58.5 to $111.8 in 10 years -with the love and support of T. Boone Pickins.

And the losers?

In 2014, Rutgers’s athletics deficit topped $36 million, an amount equivalent to losing $1, every second, for a year. Another loser, Auburn, built an 11,000 foot high definition scoreboard for $13.9 million expense even though the athletics department posted a deficit of more than $17 million the previous year, one of the worst fiscal years in Auburn athletics history.

The ACC is bleeding the most with all 8 of the reporting schools showing a loss. The PAC 12 shows only two athletic departments in the black. The strongest conference is the SEC due to football. Of the 13 SEC institutions reporting financials, only three are losing money.

Of the 48 athletic programs in the 'Power Five' conferences , spending is increasing at unprecedented levels. In 10 years, 2004-2014, the Power Five's 48 athletic departments saw earnings surge by nearly $2 billion and spent it almost as quickly as it came in. The median department saw earnings jump from $52.9 million to $93.1 million.The losing programs, nearly all public universities, need student fees and school money (i.e. public) to make up the difference.

Men’s basketball is also a money-maker, but arenas are smaller than football stadiums, limiting ticket income, and the sport’s largest television deal is managed more socialistically. The NCAA controls television rights for the wildly popular March tournament, and every year divies up nearly $800 million among hundreds of schools.

Football — where championship television rights belong to the conferences — separates Power Five schools from everyone else. ESPN is in the midst of a 12-year, $7.3 billion contract to televise the College Football Playoff that will primarily benefit the Power Five. Three of the conferences have launched their own television networks, creating additional revenue streams. Ohio State, Texas, and Alabama are part of the 1% who derive huge money from football- and all operate in the black.

Where is the increased spending going?

Sports administration & athletic staff, coaches, and facilities are the primary source of athletic department budgets - nearly doubling in all three areas over the last ten years.