PennStateHoops.com Discussion Forum

2010-2011: Big Ten’s most profitable athletic departments


#1

http://btn.com/2012/03/19/big-tens-most-profitable-atheltic-departments/


#2

Something happened to that story on BTN, I found this one: http://businessofcollegesports.com/2012/03/19/most-profitable-athletic-departments-big-ten/


#3

Ha! I saw it up there and it’s gone. Not keeping with the program! Sports is not a big business, people! Nothing to see here!


#4

How does Wisky barely turn a profit?


#5

Accounting differences have to mean a lot. Although Paterno’s ability to get people to write a check to build practice facilities, etc., might mean Penn State has lower than average capital expenses.


#6

How is it possible that Minnesota and Northwestern spent the exact amount of money to the dollar that they took in? That’s some interesting accounting.


#7

The amount of profit is irrelevant. As tbj says, different schools have different accounting methods.

The interesting part is the revenue. For example:

  • I would have never guessed the Illinois and Northwestern have almost the SAME revenue.

  • Nebraska is 6th in league revenue, and they are using data from when they were in the BIG XII. Throw in the added BIG TEN revenue, and they are going to be a financial power.


#8

So Ohio St, Michigan, and Wisconsin were the biggest spenders…but Penn St turned the best profit? Sounds about right…


#9

Funny. PSU was 5th in spending which puts us at the top of the middle third. I think it would be more interesting to see how that money gets spent by sport. I think OSU has several more varsity sports than PSU – including Hockey, which is pretty expensive. So it makes sense that they spent more. I’m not sure about Michigan, Iowa and Wisconsin – the other 3 bigger spenders. Is there a way to determine PSU’s ranking in spending by sport?


#10
[quote="PSUChamp08, post:8, topic:3187"]So Ohio St, Michigan, and Wisconsin were the biggest spenders...but Penn St turned the best profit? Sounds about right...[/quote]

Funny. PSU was 5th in spending which puts us at the top of the middle third. I think it would be more interesting to see how that money gets spent by sport. I think OSU has several more varsity sports than PSU – including Hockey, which is pretty expensive. So it makes sense that they spent more. I’m not sure about Michigan, Iowa and Wisconsin – the other 3 bigger spenders. Is there a way to determine PSU’s ranking in spending by sport?

You can look up football and basketball at the OPE Equity in Athletics Disclosure Website database (without actually checking the numbers, I’m reasonably sure that’s where the data for the above report came from - these type comparisons come out every year using the OPE EAD data). However, as was mentioned earlier the different accounting methodologies make cross university comparisons problematic. Even the website warns against it with this statement.

“Please note that valid comparisons of athletics data are possible only with study and analysis of the conditions affecting each institution.”


#11

31 Million in profit for PSU…wow.

You’d think that they could let the students into the hoop games for free…no?


#12

It’s accounting code for they lose money and the University picks up the tab. Check around the DOE site and you will be surprised at how few programs make money.


#13
[quote="Tony 83, post:6, topic:3187"]How is it possible that Minnesota and Northwestern spent the exact amount of money to the dollar that they took in? That's some interesting accounting.[/quote]

It’s accounting code for they lose money and the University picks up the tab. Check around the DOE site and you will be surprised at how few programs make money.

That’s what I was thinking. The AD pays as much tuition as they can afford. The rest falls to the Academic side.


#14
[quote="Tony 83, post:6, topic:3187"]How is it possible that Minnesota and Northwestern spent the exact amount of money to the dollar that they took in? That's some interesting accounting.[/quote]

It’s accounting code for they lose money and the University picks up the tab. Check around the DOE site and you will be surprised at how few programs make money.

That’s what I was thinking. The AD pays as much tuition as they can afford. The rest falls to the Academic side.

It’s not tuition money that fudges things on the books. Tuition dollars appear on both sides of the ledger for the athletic departments. They count as both revenue and expense and net out to zero.


#15
[quote="Tony 83, post:6, topic:3187"]How is it possible that Minnesota and Northwestern spent the exact amount of money to the dollar that they took in? That's some interesting accounting.[/quote]

It’s accounting code for they lose money and the University picks up the tab. Check around the DOE site and you will be surprised at how few programs make money.

That’s what I was thinking. The AD pays as much tuition as they can afford. The rest falls to the Academic side.

I don’t know if they lose money, or tif they just account for all funds.

Truth is, none of the schools actually make a “profit”. It’s not like they have a big savings account with a 10-figure balance that just keeps getting bigger. They have money, they spend money. But, the different accounting methods cover this in different ways.

Let’s say that Minnesota has a $3.2Mprofit. They would then contract for the upgrade of weight equipment, buy a few new wrestiling mats, perhaps spend a little more for the awards banquet… money is all spent. $0 balance. Som will just t the #3.2M as “profit” before spending those funds.

Being a non-profit entity, some schools will look to have their books come to $0 at the end of the year.

I’m sure if you ask Penn State Athelic director about his $31M surplus, the answer you will get is “what surplus? it’s all spent”.


#16
[quote="Tony 83, post:6, topic:3187"]How is it possible that Minnesota and Northwestern spent the exact amount of money to the dollar that they took in? That's some interesting accounting.[/quote]

It’s accounting code for they lose money and the University picks up the tab. Check around the DOE site and you will be surprised at how few programs make money.

That’s what I was thinking. The AD pays as much tuition as they can afford. The rest falls to the Academic side.

It’s not tuition money that fudges things on the books. Tuition dollars appear on both sides of the ledger for the athletic departments. They count as both revenue and expense and net out to zero.

Right. But the total revenue / expense number for tuition comes from what is left after all the other bills are paid – the bills that can’t be fudged.


#17

You used to be able to find the university “contribution” in those figures, often under some weird name, to get the budget balanced. Some schools were chipping in $10 million plus from student fees to be able to field a football team.


#18
[quote="Tony 83, post:6, topic:3187"]How is it possible that Minnesota and Northwestern spent the exact amount of money to the dollar that they took in? That's some interesting accounting.[/quote]

It’s accounting code for they lose money and the University picks up the tab. Check around the DOE site and you will be surprised at how few programs make money.

That’s what I was thinking. The AD pays as much tuition as they can afford. The rest falls to the Academic side.

It’s not tuition money that fudges things on the books. Tuition dollars appear on both sides of the ledger for the athletic departments. They count as both revenue and expense and net out to zero.

Right. But the total revenue / expense number for tuition comes from what is left after all the other bills are paid – the bills that can’t be fudged.

I’m not following you. The total revenue/expense number directly corresponds to the number of athletes on scholarship. It’s not exactly a very variable number for most schools. They sure as heck have to pay the scholarship bills well before many others. In fact that’s one of the first expenses a school occurs going into their academic year. They will know almost exactly how many athletes are going to be on scholarship on day one of the academic year and have to manage other expenses to meet their budget constraints.


#19

Not sure if I should put this here or in the OT: Gone Wild since the Okla State athletic department was sort of running a hedge fund on the lives of their biggest boosters.

http://www.dailyfinance.com/2012/03/21/death-bets-oklahoma-state-university-insurance-pickens/?ncid=webmail27


#20

[quote=“JohnT, post:19, topic:3187”]Not sure if I should put this here or in the OT: Gone Wild since the Okla State athletic department was sort of running a hedge fund on the lives of their biggest boosters.

http://www.dailyfinance.com/2012/03/21/death-bets-oklahoma-state-university-insurance-pickens/?ncid=webmail27[/quote]

That just sounds outright illegal. It’s like missappropriates of public funds. You can’t spend government money like that.