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The NCAA Needs to Stop Runnin' Away

Picture Courtesy of USA Today      Click link below to listen to podcast

10/27/2015

On November 1, 2010, Mark Emmert became the fifth president of the National Collegiate Athletic Association and so far under his leadership this organization continues to prosper. According to an audited financial statement, the association released in March of this year, the NCAA had total revenue of nearly $1 billion during its 2014 fiscal year.

According to the statement, the organization had $989 million in total revenue. It had $908.6 million in total expenses, including $547.1 million distributed to Division I schools and conferences. This left over an $80 million surplus and the fourth consecutive year in which the annual surplus has exceeded $60 million.

This is a lot of revenue for an organization that always cries broke with the mere mention of NCAA student-athletes being compensated in some form or fashion.

While the average American can't afford the cost associated with a college education and the debts incurred from student loans, the salaries of college football and basketball coaches are spiraling out of control along with event ticket prices. 

Kentucky head coach, John Calipari was the highest paid college basketball coach last season leading the way with $6.4 million in total earnings. Private schools generally don't release financials, but according to USA Today, Duke head basketball coach Mike Krzyzewski earned just over $ 6 million. Alabama head football coach Nick Saban and Michigan's Jim Harbaugh are the highest paid coaches in college football with both making just over $7 million, in total pay this season. All of these salaries more than likely includes base pay, bonuses, and incentives. 

I'm in no way insinuating that these coaches aren't worth the hefty salaries because it can be argued that Saban and Coach K are worth even more. But why so much for college coaches and very little is granted for the athletes? Unlike 20 to 30 years ago, the average college basketball and football players fair market value far exceeds the value of their athletic scholarships because of the revenue generated by them.
  
According to collegedata.com in its most recent survey of college pricing,  a "moderate" college budget for an in-state public college for the 2014–2015 academic year averaged $23,410. A moderate budget at a private college averaged $46,272. Tuition and fees, housing, meals and supplies factors into these averages. Also, please keep in mind that "fees" generally includes the library, campus transportation, student government, and athletic facilities.

Since most state's are cutting funds once allocated for college and universities, the days of subsidizing athletic departments could be coming close to an end. College administrator's may soon start expecting athletic departments to become self-sufficient, especially the Power 5 conference schools. (ACC, Big 10, Big 12, Pac-12 and SEC)

According to USA Today, just 24 of 230 public schools in Division I, have athletic department's that are self-sufficient, up from 20 a year earlier, according to an analysis of the 2013-14 school year based on data gathered in conjunction with Indiana University's National Sports Journalism Center. All  24 schools  are from Power 5 conferences with the exception of the ACC. Remember that private institutions such as Duke, Wake Forest, and Miami normally don't provide financial information so this figure may not be accurate.

By NCAA definition, self-sufficiency occurs when athletic department's generated operating revenues exceeds or are at least equal to its total operating expenses. Basically, show a surplus or break even.

In my opinion with the very lucrative TV contracts and  revenues available, there shouldn't be any Power 5 conference school subsidizing their athletic programs period. Even though basketball (Men/Women) and football are revenue producing sports and should always be prioritized, it just doesn't make any sense for these universities to keep subsidizing big-time college sports. It's high time for the NCAA to stop running away from this topic.



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