Playing in the big leagues means spending big bucks: the financial reality of college football

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SFU is middle of the pack in terms of spending, but has struggled on the field in recent years. (Photo courtesy of SFU Athletics)

By: Gabrielle McLaren

As SFU’s football season comes to a close, the Clan ranks last in the National Collegiate Athletic Association (NCAA) Great Northwest Athletic Conference, finishing the season with nine losses. It is no secret that SFU football has struggled in the NCAA, the team not winning a game since 2014.  When SFU switched over to the NCAA in 2009, the university’s president at the time, Michael Stevenson, embraced the fact that the switch would create “a high level of competition and challenge” for SFU athletes. But eight years later, SFU football is still struggling in the NCAA. The question now becomes: why?    

In an interview with CBC in September 2017, former Clan receiver Milos Zivkovic pointed out the Clan’s hurdle: playing in an American league meant playing American football. He said, “They had to start rebuilding and relearning a whole new system. It’s a whole new game. Different competition. Different set of rules.” As a result, the SFU football team has more American athletes than teams at UBC or at the University of Victoria. But playing in an American league also meant that the Clan played in an American context, which included playing in a country whose football culture is different than Canada’s — right down to the funding.

According to the NCAA’s financial research, the median total expenses for Division II teams with football teams was US$6,538,000 in 2015 (the last year for which data is available). However expenses ranged from US$1,594,000 to US$16,802,000 which constitutes (and creates) an incredible disparity between teams.

According to data shared by SFU Clan Athletics, SFU football’s total expenses range around US$8,052,23.44, putting SFU in the middle of the pack as far as spending goes.

Comparatively, the top-ranking Division II football team in the Great Northwest Athletic Conference (GNAC) is Central Washington University. Back in June 2011, Central Washington’s athletic department was given an additional US$230,000 to help the department emerge from nine years of operating on a deficit. Out of the department’s US$3,800,000 budget, US$295,000 came from ticket and merchandise sales while US$1.1 million came from student fees.  

Increasing costs for NCAA teams isn’t as much news as it is reflecting trends in universities across the United States. Between 2004 and 2012, total expenses have grown by 126.6 per cent with no sign of stopping. Out of 1,281 athletic departments that are members of the NCAA, only 14 made a profit or broke even in 2010.  

As a result, institutions across the board are reconsidering the role that football will be playing in their athletic departments including Humboldt State University, the second-highest ranking team in the GNAC. GNAC teams face the additional challenge of playing in one of the most geographically enormous leagues in the NCAA. The resulting travel creates additional budgetary strain for many Western teams, using up dollars that other schools can allocate elsewhere.  

Yet not everyone is feeling the same pains as the GNAC. The University of Texas’ Division I football team generated US$183.5 million in revenue, of which US$44.3 million was from donations, and US$62.9 million was in licensing rights. They could run SFU’s football program twice and still make a slight profit. In 2016, the team managed to outdo some NFL teams in terms of profitability.

An analysis by ESPN’s Outside the Lines found that the United State’s richest athletic departments pulled in four billion dollars more than all other schools combined in 2015. As a result, these teams can splurge on private jets and five-star accommodations while traveling, while other schools struggle to level the playing field often by tapping into student fees. The NCAA found that for universities operating with football teams, the majority of overall expenses come down to grants-in-aid (33%) and coaches’ salaries (31%).  

Though football coaches rank amongst the highest-paid coaches in the NCAA and institutions with football teams spend a lot more money on average, those numbers parallel the overall expenses of teams without football.  

Furthermore, though football programs have consistently generated more revenue than other sports programs, they also entail the largest expenses and breaking even is becoming increasingly hard. The line is still thin: in 2015, an NCAA Division II’s football team’s median total revenue was US$1,143,800, but median expenses were US$1,313,200.  

The NCAA does have some rules in place to cap spending. For example, the maximum allowance for football scholarships for Division II teams is the equivalent of 36 full grant-in-aid scholarships. SFU’s football team gives the equivalent of 18.08 full scholarships, valued at approximately $300,000. This is incredibly valuable in Vancouver, the 39th most expensive city in the world to live in according to The Economist’s 2017 cost-of-living index (the only other North American cities to rank above Vancouver are in other divisions of the NCAA).

But overall, business and economic experts are finding that the college football business model is starting to fail, as universities across the United States slip into debt or pull funding from other branches and faculties to keep up. Factors causing the hike in prices range from inflation across the economy, to the revenue generated from sports camps, ticket sales, and cash contributions going down.    

Karen Weaver, a sports-management professor at Drexel University, says that “leaders need to be very careful that long-term expenses and commitments cannot, and should not, be balanced on the assumption that these traditional media rights deals [a main source of revenue for many football teams] will hold up.”

This is still controversial: universities across the country are investing in infrastructure more than ever, hoping to increase ticket sales, and bettering their athletic teams, hoping to attract prospective students. Defenders of college football also point to the opportunities created by university athletic departments: they attract students (and extra tuition money) to campuses and communities, offer scholarships and aid to student-athletes, and increase a university’s prestige, visibility, and pride.

Regardless of where you stand on the issue, as SFU continues its journey within the NCAA and invests into the future by updating the school’s athletics infrastructure, the financial reality of college athletics cannot be denied.