USA Today has updated its listing of expenses and revenue for the athletic departments of 230 public NCAA member institutions, and the results show that the revenue a school takes in doesn’t rely solely on how its teams perform.
NCAA finances can be a complicated thing for fans to understand, with aspects like endowments, payments from the athletic department to the attached schools’ general funds, and the difference between revenue and profit. One thing that fans should understand is that whether a particular school’s teams are performing well on the field or not doesn’t necessarily dictate how much revenue that school’s athletic department is bringing in.
USA Today’s update is for the 2015-16 fiscal year, which began on Oct. 1, 2015 and ran through Sept. 30, 2016. While Alabama and Villanova claimed national championships in football and men’s basketball, respectively, during that time, revenue from those titles will be better reflected in the reports for FY2017 and beyond. To get an accurate understanding of the effect winning had on revenue, it’s necessary to go back further in the record books.
Ohio State’s defeat of Oregon in the first-ever college football playoff national championship game in January of 2015 is an example of what our data sample is considering, along with Duke’s defeat of Wisconsin in April of 2015 for the DI men’s basketball title. While women’s basketball, baseball and even wrestling at some schools could be considered revenue sports because they do technically bring in more money than they cost the schools to operate, the purpose here isn’t to present an exhaustive data set, but rather to demonstrate that many factors outside of the on-field performance of a school’s football and men’s basketball teams play a part in how much revenue the school’s athletic department brings in.
Ohio State’s ranking on the list seems to concur with the notion that winning automatically means huge revenue hauls. The Buckeyes pace the Big Ten and come in at third overall, with a revenue of $170.79 million. Duke is a private school and therefore not required to disclose its financials via records requests, so the next best thing available is the numbers on the Badgers, the 2015 March Madness runner-up. Wisconsin comes in at 11th with a revenue of $132.79 million.
Playing for a national title isn’t the only measure of success, however. The four teams who were selected for the inaugural college football playoff (Alabama, Florida State, Ohio State and Oregon) fall at different places on the list. Alabama ranks just below the Buckeyes with a revenue of $164 million. Florida State led the ACC but ranked 18th nationwide with $113.75 million and Oregon similarly led the Pac-12 but finished 23rd overall at $111.70 million.
If the men’s basketball Final Four from the 2014-15 season are considered, Kentucky and Michigan State joining Duke and Wisconsin, the rankings are similar. The Wildcats are 13th at $132.18 million and the Spartans 16th at $123.03 million. Further expanding the definition of winning, to all 68 schools which were selected for March Madness or all schools which won conference championships in FBS football in 2015, further increases the disparity of the schools in this ranking.
One big reason six of the top 10 schools belong to the SEC is the conference’s media distribution. The revenue distribution from the SEC Network was over $40 million to each school in FY2016. The Big Ten’s two schools in the top five of the rankings, Ohio State and Michigan, also enjoyed a nice bump in revenue from the Big 10 Network.
Michigan is probably the best example of brand power being more important than winning when it comes to revenue. The football team posted a respectable 10-3 record with a Citrus Bowl victory in 2015, but didn’t play for the conference title or qualify for the playoff. The men’s basketball team went 16-16 overall, posted an 8-10 conference record and missed out on the dance in the 2014-15 season. Yet, thanks to an apparel contract with Nike which could be worth up to $173.8 million and other factors, the Wolverines still rank fifth.
It’s that ability to convert brand power into dollars that sets apart the most lucrative NCAA athletic programs. More of this has occurred recently, proving that finding ways to bring in revenue streams that aren’t dependent on how the football and men’s basketball teams fare on the field/court is the real path to sustained revenue. Texas, tops of the Big 12 and ranked second at $187.98 million, should see that number go up in FY2017 thanks to a new sponsorship with Corona. Likewise Penn State, 12th overall and fourth in the Big Ten at $132.24 million, has found a new revenue source by hosting concerts at Beaver Stadium.
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Winning certainly doesn’t hurt, as a tradition of success is a big part of what helped these programs build the brand power that they have parlayed into dollars. Media rights and sponsorships, along with creating additional value in facilities and other factors, are truly what separates the nation’s most lucrative NCAA athletics programs. Revenue that comes from winning is just these programs showing off.