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College Athletic Programs: Too Big To Fail?

folsom field

The University of Colorado made 58 million dollars off of its student-athletes in 2013. In return, the athletes received 8.8 million dollars in academic aid, or 15%. If that sounds lopsided, then you’re reading it correctly. That aforementioned disparity of amount earned versus amount received is at the heart of a very heated debate in society that centers on whether or not student-athletes should be compensated for the money they generate on behalf of their universities while on the field/court. However, there is a more important issue that is lost amidst the student-athlete compensation debate: institutions that were meant to be solely for the use of the education of young people are being forced to fund athletic departments that can’t support themselves.

In 2013, the University of Colorado Athletics Department spent roughly 66 million dollars. Well, wait… I thought you said they only made 58 million dollars. How is it that they are allowed to spend 66 million dollars? Where’s that difference of 12% coming from that allows them to break even? The answer is state and institutional subsidies. That’s right. Taxpayers and students are being forced to foot the bill so each week the Colorado Buffaloes football team can continue to take on one of eleven potential Pac-12 opponents at Folsom Field.

One reason why this is such a big issue is because it renders the student-athlete compensation debate null and void. If the University of Colorado can’t even operate in the black when they’re not paying their labor source, how could they possibly entertain the idea of student-athlete compensation? In order to bankroll student-athlete compensation, it would require even more state and institutional subsidies, which means Average Joe the taxpayer and/or student would be on the hook for even more.

To make this set of circumstances even more obscene is that even if CU cut all athletic scholarships, they would still only be breaking even. As a result, even in a hypothetical situation where they aren’t on the hook for nearly 9 million dollars annually in scholarship money, they still would likely require subsidies to keep their athletic programs operational. And to add to that, even with receiving a 12% revenue bump from subsidies, according to the NCAA Financial Report for 2013 that the university is required to submit annually, CU has 55.7 million in outstanding debt on athletic facilities and has been operating at a loss for the past three years, according to athletic director Rick George.

It makes sense why George (and others), who has been very vocal in his disagreement of the idea that student-athletes should be compensated, has taken such a stance: the school couldn’t afford it.

This isn’t just a problem that is plaguing the University of Colorado. As of 2012, only LSU, Nebraska, Ohio State, Oklahoma, Penn State, Purdue, and Texas have reported years with no subsidies. Alabama and Florida, despite having won multiple national championships in both basketball and football, and being ranked as two of Top 6 schools in terms of annual revenue generated from athletics, pull in roughly 10 million in subsidies between the two of them each year. According to the Knight Commission, over half of the schools receiving subsidies are receiving more than 9 million annually. Rutgers University currently receives 46 million a year in subsidies to cover their annual operations bill of 78 million. That’s a whopping 60%.

Curiously, both Alabama and Florida turn a profit. That begs the question: why are these universities being awarded subsidies if they are self-sufficient? According to Ann D. Neal, president of the American Council of Trustees and Alumni, it “raises a major question about institutions, which are always trying to play catch-up in the athletic realm, relying on institutional and government subsidies and student fees to make ends meet at a time when we have very limited resources. And that raises questions as to whether institutions are paying attention to their primary purpose, which is education.”

So, naturally, as a result of operating at a loss for three straight years, the Athletic Department and the University of Colorado are finding ways to cut back, right? Wrong. They recently approved a $156 million dollar athletic facilities project that will see new offices created for every coach, a new weight room, new locker rooms, an indoor practice facility, and a high performance sports center.

What makes this even more confusing is that when the Board of Regents approved these renovations back in December 2013, they did so under the belief that by the time groundbreaking was underway, they would have raised 47 million in private donations. However, when the groundbreaking ceremony was held in May, they hadn’t hit that goal and Athletic Director Rick George wouldn’t even specify how much of that original goal had been hit, stating it was just a number everybody was “fixated on when I was hired,” and that “we’ve got to raise a lot more than $50 million for this project and we intend to do that.”

When speaking to the Daily Camera, Democrat regent Michael Carrigan stated the reason they were still moving forward was simple. “The professional fundraisers tell us once we have the cranes there and we’ve broken ground, that will add momentum to the fundraising. So they came to us and we said, ‘Yeah, that makes sense. Let’s have this groundbreaking, let’s have this celebration and let’s get going on completing Folsom.” No. I’m not kidding. That’s a direct quote.

In addition to making hefty financial commitments to the infrastructure of their athletic programs, most notably football, they are currently shelling out roughly 13 million annually to current and former coaches/administrative figures of their various athletic programs. The most notable beneficiaries of the aforementioned 13 million are current head football Mike MacIntyre and head men’s basketball coach Tad Boyle, who take home roughly 4 million annually between the two of the them.

Additionally, 3.3 million out of the 13 million is being spent on severance packages. That’s right; 3.3 million of the already limited budget is being spent on people who aren’t even there anymore. That number by itself might not seem outrageous given the current state of college athletics, but let’s put that number in perspective. The average professor at CU earns 106k a year. That means if they weren’t paying 3.3 million a year in severance packages, they could theoretically hire 31 new professors or give raises to those already employed by the university.

However, for me, that’s not even the icing on this deliciously debt-riddled cake. Current Athletic Director Rick George is on a base salary of 700k a year, with the potential for 8.5 million in performance-related bonuses. To revert back to my previous comparison, apparently CU feels that George is worth potentially as much as 86 professors. That stat in of itself is mind boggling, but the fact that this is occurring at a time when schools all across Colorado are having to make cuts due to lack of finances, while individuals like George and MacIntyre are paid millions to head athletic departments and programs respectively, shows how skewed our priorities are when it comes to educating our youth.

When schools like Ohio State and Texas are only bringing in roughly 20-25 million more than they are spending, it makes you continue to question why a school like CU, who in even the best of circumstances, will generate maybe 10-15 million more than they spend, are willing to pay potentially upwards of 12 million for George and MacIntyre. Considering most Division I schools struggle to break even when it comes to athletics, it’s more likely the CU athletic department will continue to require subsidies, aka taxpayer and student dollars, just so they can get paid each month.

Dal Ward, a famous figure in CU’s athletic history, and the namesake of the Dal Ward Athletic Center, once famously said, “You’re here to get an education and play football, in that order.” Judging by the amount of the money the university is willing to spend on their athletic director/football coaches compared to the amount of money that they are giving their professors, it’s pretty clear where they are putting the priority. Sadly, it seems the very institutions that were once charged with the primary directive of educating today’s youth are now only in place to ensure the continued operation of their respective athletic programs.

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