Statewide, athletics program losses leave students to pay the difference
Virginia’s public universities are delving deeper into students’ pockets to help compensate for athletic department losses. VCU is no exception, according to a report released by the Joint Legislative Audit and Review Commission in September.
The legislative study examined the change in athletic departments at 15 state schools, spanning a six-year period from 2006-07 to 2011-12. In that period, VCU Athletics used 6 percent of in-state tuition costs to support athletics, compared to the state average of 12 percent. To put that in perspective, the average college student in Virginia is losing $1,185 a year to mandatory-athletic fees. At VCU, students are paying roughly $635 a year, the third lowest among state schools.
VCU Athletics compared favorably to many of the other Virginia schools overall, but its basketball program suffered multi-million dollar losses in 2011-12, according to the report. The program lost more than $3 million two seasons ago, the second-largest single-sport shortfall of all 15 universities studied.
However, Glenn Hofmann, VCU’s executive associate athletic director of external relations, said the numbers are misleading.
“The majority of donations to the athletics department are unrestricted or non-sport specific,” Hofmann said. “This differs from many other institutions whose donors make contributions designated to help specific sports. In reality we believe most of our current donations are tied in with tickets to men’s basketball games, which if reported based on this would change dramatically the revenue/expense results for men’s basketball.”
Like many universities in the state, VCU used mandatory athletic-related fees included in tuition costs to compensate for the Athletics deficit.
In 2011-12, 73 percent of the $16.7 million required to operate the athletics program came out of students’ pockets, according to the report. The department generated just 24 percent of operational costs through ticket sales, radio and television receipts, alumni contributions, guarantees, royalties, NCAA distributions and other revenue sources independent of institutional entities outside the athletic department in 2011-12.
VCU’s reliance on student tuition to support the athletics department isn’t unprecedented. Ten of the 15 Virginia universities included in the study generated less than 27 percent of athletics expenditures themselves.
Statewide, only Virginia Tech and the University of Virginia came close to fully-funding their athletic programs in 2011-12.Both received considerable revenue-sharing funds from the Atlantic Coast Conference.
Of the 269 sports played at Virginia’s public schools, only Virginia Tech and U.Va. men’s basketball and football were profitable.
The problem persists on a national scale as well. For the 228 Division 1 public schools nationwide, subsidies for athletics increased almost $200 million from 2011-12, according to a USA Today report. Only 23 of those 228 universities made enough money to pay for their athletics programs.
The reason for increased spending statewide was largely attributable to athletic student aid, according to the JLARC report. Virginia institutions spent $22 million more on athletics student aid in 2011-12 than six years earlier, accounting for 26 percent of the increase in athletics spending.
Instead of multiplying the number of student-athlete scholarships or building multi-million dollar practice facilities, VCU paid its coaches more. Over the six years studied, VCU’s total spending on coaching salaries increased by 94 percent, compared to the state average of 31 percent. More specifically, the spending on men’s coaching salaries grew by more than 120 percent.
One major issue among students is that these mandatory athletic-related expenses often are not listed on the breakdown of tuition and fees on the university websites.
However, the athletic fee is often the largest component of mandatory fees at Virginia universities because the state does not permit the usage of general funds for the subsidization of athletic programs.
And to many, that is a problem.
In a focus group of 205 students conducted by the JLARC across 15 state schools, more than two-thirds of the students suggested they would scale back athletics if it meant lower tuition costs.
But Hofmann says that the importance of athletics at higher education institutions is undervalued.
“Certainly the success of the men’s basketball program has contributed greatly to increased visibility for the institution and all of its academic programs nationwide,” Hofmann said. “Success also translates into more school pride for those currently enrolled as well as students once they have graduated. More pride usually, and certainly in the case of VCU, has resulted in a higher donation level.”
Though the JLARC report collected reliable data over six years from 2006-07 to 2011-12, the study did not account for everything. And Hofmann suggested the numbers presented in the study aren’t nearly as bad as they may seem.
“Last year the VCU athletics department ran a surplus of $1 million,” Hofmann said. “And we have increased our overall revenue from 2009 to last year by 163 percent from internally generated revenue sources such as ticket sales, corporate sponsorships and donations.”
Moving forward, Hofmann added that the athletics program will be making a significant increase in its philanthropic (or non-transactional) giving in ten identified regions of the nation. Additionally, he expects the focus on student-athlete alumni groups to increase donations and reduce reliability on student tuition and fees.