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Chapter 19

Chapter 19. C H A P T E R. 19. Applied Sport Finance. Chapter Objectives. Read a case and feel comfortable understanding how the facts relate to one another. Appreciate the revenue and expenses seen in a typical college athletic program.

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Chapter 19

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  1. Chapter 19 C H A P T E R 19 Applied Sport Finance

  2. Chapter Objectives • Read a case and feel comfortable understanding how the facts relate to one another. • Appreciate the revenue and expenses seen in a typical college athletic program. • Understand how mission and vision affect financial decision making. • Appreciate how diverse and extensive personnel costs are for an athletic department. • Answer questions associated with the case study and each chapter in the text.

  3. Facts About Division II Athletics • There are 141 private universities in this group and 154 publicly owned universities as of 2010. • Average program hosted around 380 athletes and spent on average $11,900 on each athlete. • Average grant for students at private universities in 2009 was $31,600 per student-athlete. • Average is between seven men’s and eight women’s teams, with most programs sponsoring 14 sports. (continued)

  4. Facts About Division II Athletics(continued) • Total revenue in 2009 for schools offering football was averaged at $4,593,000, and the average expense was $4,522,000. • 2009 net generated revenue averaged $541,000. • 2009 average expense produced a loss of $3,907,000. • 2009 median expenditure on men’s sports was $2,292,900 (46.7% of expenditures). (continued)

  5. Facts About Division II Athletics(continued) • 2009 median expenditure on women’s sports was $1,358,700 (27.6%). • 2009 median expenditure on administrative (gender-neutral expenditures) was $923,700 (18.8%). • 2009 median program loss was $319,600. • 2009 median amount spent on coaching salaries for men’s teams was $593,000. • 2009 median amount spent on coaching salaries for women’s teams was $276,000.

  6. University of Never Land Background • This comprehensive university offers both bachelor’s and master’s degrees. • Approximately 2,600 students attend. • Tuition at the university is $25,000 a year. • Room and board ranges from $9,000 to $12,000 a year. • Every student is charged $1,500 a year for fees, but none of the fees goes expressly to support athletics on campus. (continued)

  7. University of Never Land Background(continued) • Athletics at the university started in 1949. • UNL is a Division II member of the NCAA and a member of the Fighting Eight Conference. • There are more than 296 student-athletes. • There are 81.19 full scholarships available for men’s sports and 57.69 full scholarships available for women’s sports. • This equates to $4.86 million in grant and aid (covering tuition plus room and board). (continued)

  8. University of Never Land Background(continued) • 157.12 student-athletes pay the entire tuition. • Based on 157.12 nonscholarship equivalent athletes, the athletic department would generate around $5.5 million in tuition and room and board. • Athletic department generated $10.36 million in tuition revenue in 2012.

  9. UNL Athletics Mission Statement • The athletic department supports and endorses the goals and objectives of the university and serves to 1. meet the competitive and educational needs of the student-athlete; 2. unify the extended university community of students, faculty, staff, alumni, and townspeople; 3. generate a positive image of the university; and 4. promote student health and wellness for life.

  10. UNL Athletics Goals • Provide the necessary resources to field competitive teams in all sports within the Fighting Eight Conference and the NCAA Division II. • Provide the resources to help our student-athletes maintain high academic standards and become better students and citizens of the campus and the community. • Bridge the gap between athletics and the campus community by fostering a communicative and inclusive relationship between faculty, staff, coaches, and administrators. • Foster dialogue with the general student population to rekindle pride in Tinkerbell Athletics and support for their fellow students, the athletes. • Generate community pride and support for Tinkerbell Athletics, thus creating a positive image of the university through athletics.

  11. UNL Athletics Proposed Goals • Generate at least one sold-out basketball and football game a year. • Comply with Title IX to the best of the university’s ability through financial or numerical equivalency through either reducing the number of men’s sports or adding a new women’s sport. • Have at least four of the teams break even by covering their expenses. • Reduce the athletic department’s reliance on direct institutional support by 5% a year over the next three years. • Reduce coaching and administrative expenses by 10% over the next three years.

  12. Revenues and Expenses for UNL Athletics • Ticket Sales (2012) • Five home football games: 300 tickets average at $5.00 a ticket = $7,500 • 15 men’s basketball games: 150 tickets average at $3.00 a ticket = $6,750 • 15 women’s basketball games: 100 tickets average at $3.00 a ticket = $4,500 • 20 soccer games (men’s and women’s): 100 tickets average at $3.00 a ticket = $6,000 • 25 baseball games: 40 tickets average at $3.00 a ticket = $3,000 • Total ticket sales average: $27,750 a year (continued)

  13. Revenues and Expenses for UNL Athletics(continued) • Alumni Contributions • Athletic department currently generates $300,000 a year in donations earmarked for athletics. • There is a total of 450 alumni. • One alumnus gives an annual gift of $100,000. • Additional $200,000 needs to be raised every year. (continued)

  14. Revenues and Expenses for UNL Athletics(continued) • School wants to launch an aggressive capital campaign for athletics to endow four coaching positions; estimated need to raise $1,000,000 for each position. • UNL wants to refurbish the athletic field and fix the bleachers. • Total capital campaign for 2012-2014 will be $8 to $10 million. (continued)

  15. Revenues and Expenses for UNL Athletics(continued) • Concessions: School generates more novelty sales than most Division II schools. • Direct Institutional Support • University has committed at least $4 million a year in institutional support as long as the total number of athletes is at least 290 a year. (continued)

  16. Revenues and Expenses for UNL Athletics(continued) • Administrative and Coaching Staff Expenses • Athletic director ($110,000) • Associate AD ($85,000) • Assistant AD ($60,000) • Administrative assistant ($40,000) • Director of sport medicine ($60,000) • Two athletic trainers (part-time) ($25,000 each) • Sports information director ($48,000) • Equipment manager ($40,000) • Strength and conditioning coach (part-time) ($29,000) (continued)

  17. Revenues and Expenses for UNL Athletics(continued) • Administrative and Coaching Staff Expenses • Baseball head coach and two assistant coaches ($64,000 total) • Softball head coach and two assistant coaches ($53,000 total) • Basketball head coach and two assistant coaches, men’s ($129,000 total) • Basketball head coach and two assistant coaches, women’s ($110,000 total) • Football head coach and eight assistant coaches ($317,000) (continued)

  18. Revenues and Expenses for UNL Athletics(continued) • Administrative and Coaching Staff Expenses • Lacrosse head coach and one assistant coach ($62,000) • Volleyball women’s head coach and one assistant coach ($63,000) • Volleyball men’s head coach ($23,000) • Soccer women’s head coach and one assistant coach ($60,000) • Soccer men’s head coach and one assistant coach ($50,000) • Track and field head coach and two assistant coaches ($60,000) (continued)

  19. Revenues and Expenses for UNL Athletics(continued) • Medical expenses: salary and benefits for the director of sport medicine and two part-time athletic trainers. • Medical operating budget is around $5,000. • Expenses covered by the university: human resource, information technology, facility maintenance, and utilities. • Purchasing and receiving, ticketing, and TV and radio operations are paid for by the athletic department.

  20. Facilities • Facilities are more than 35 years old. • Dumbo Arena • Home of UNL’s basketball and volleyball programs • 29,000 square feet • Seating capacity of 1,500 spectators for athletic events • Can be configured for everything from concerts and speeches to dinners, meetings, and graduation • Four bathrooms • Batting cages, athletic trainer’s room, equipment room, laundry facilities, offices, and storage (continued)

  21. Facilities(continued) • Pluto Athletic Complex • The complex accommodates facilities for all of UNL’s outdoor sports. • Goofy Field is home to UNL’s football program, women’s lacrosse, and men’s and women’s track and field teams. • UNL’s softball and baseball teams play on two of the best fields in the state. (continued)

  22. Facilities(continued) • Gumby Soccer Complex • The complex seats 1,800 fans in its bleachers. • Astroturf field is five years old. • Hosts conference tournaments on a yearly basis. • Fields are often rented for local soccer tournaments when school is not using them. • Complex has lights.

  23. Administrative Resources • Heat during the winter comes from the power-generating plant that services the entire university. • UNL pays all the electrical expenses for lights, equipment, and ventilation. • UNL pays for janitorial care of the arena and landscaping care for the fields and surrounding areas. • Athletic department does not need to pay for janitorial supplies, cleaning supplies, paper goods, water for watering lawns, care of landscaping equipment, and all fertilizer and related lawn care chemicals. • Estimated value of such services is estimated at more than $500,000.

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