The Cost of ‘Revenue Sports’

University of Alabama at BirminghamUniversity of Alabama at Birmingham

When the University of Alabama at Birmingham announced June 2 that there would be gridiron games this fall, many around the country were perplexed—and many others thrilled—by the obvious victory for the sport that is a way of life in Alabama.

The announcement came exactly six months after university President Ray Watts turned off the lights on the field, signaling the end of the program. Keeping football on campus, it was decided then, was too expensive and took too much away from the rest of the campus—67 percent of the $30 million budget came from the university’s general fund, and another 7.6 percent came from student fees. (And this at a school in one of the smaller Football Bowl Subdivision conferences: Conference USA.)

Watts had said that, after hiring a consultant who projected that fielding a competitive team would cost $49 million over the next five years, “there was no way for us to cover that unless we took away from education and research and health care.”

But after rallying cries from students, alumni and the city of Birmingham, the school caved and announced it would field a team for the 2015 season after all.

Football-1, University Budgets-0.

And so, the team will return to the field in a conference in which you cannot compete in any sport if you do not field a football team. The university will cap subsidies from the general fund at $14.49 million for each of the next five years ($200,000 less than the 2015 subsidy amount), and the city of Birmingham, UAB’s National Alumni Society and the student body have all pledged to do their part to chip in to make up the difference.

UAB is not alone in this quandary over athletics.

According to Dr. Earl Smith, a professor of sociology (emeritus) at Wake Forest University who has focused largely on the sociology of sport throughout his career, “It is a commonly held myth that the so-called ‘revenue generating sports’ of football and men’s basketball make a profit and even pay for the other ‘lesser’ sports like women’s softball, volleyball and track and field. Though some sports generate revenue, very few … generate profit.”

In fact, of the 128 Division I football programs, only seven finish in the black year after year, according to the Knight Commission on Intercollegiate Athletics.

“At the nation’s most prominent universities, intercollegiate athletics have always played a dual role in campus life,” according to a Knight Commission report. “On the one hand, they are managed for the benefit of student athletes. On the other, they inspire the interest and passions of thousands, if not millions, of fans. For most teams at most institutions, these roles can be reconciled. But in high-profile sports, tensions often surface between the core mission of universities and commercial values.”

Smith said that, in many cases, athletics drive the bus at schools classified for their research and scholarship.

“Faculty members, who are the primary drivers of the commodity that is produced in colleges and universities—an education—have salaries that pale in comparison to athletic staff, go years without raises, and yet are the very labor power that keeps the student athletes academically eligible,” he said. “Many campuses are in serious need of upgrading their facilities, particularly modernizing classrooms with the technology necessary to effectively deliver education.”

“Nevertheless, the pursuit of those elusive goals [of fielding a team whose television revenues and ticket sales generate enough money for the program to profit] by many programs creates a cost spiral that causes athletics spending to rise at rates often exceeding those on academic spending,” continued the report. “At many universities, institutional spending on high-profile sports is growing at double or triple the pace of spending on academics.”

“In the current climate of conference realignment and the excitement of Cinderellas and March Madness, it is easy to envision what it would be like to increase the visibility and perhaps competitiveness of an athletic program playing in a mid-major conference,” Smith said. “But making this type of move without seriously considering the financial implications will likely result in aborted missions, like in the case of Appalachian State, regression, as was the case with Winston-Salem State, or near bankruptcy as was the case with the University of Alabama Birmingham.”

For smaller schools, the decision to field a football team could literally mean a decision of whether to keep the doors of the campus open.

Paul Quinn College President Michael Sorrell tells audiences across the country that his decision to cut the program at his tiny Dallas school was a no-brainer.

At a school at which a fundraising campaign to raise money for students to get eyeglasses was in place, where a Clothes Closet provided students with free business casual-wear for free, where 80 percent of the roughly 250 students are Pell Grant eligible, Sorrell has often said he could not justify spending $600,000 on a losing program that was not generating any revenue.

Smith believes the trend of overspending to “keep up with the Joneses” could be the end of all sports on campus.

“The fact that the so-called ‘money sports’ of football and men’s basketball extract more money than any other single entity on campus—without turning a profit—may eventually lead to a death-knell for college athletics,” he said.