Kyle Potter, Published October 11 2013
NDSU and UND athletics need millions from taxpayers, studentsFARGO - North Dakota State University’s athletics program needs millions of dollars each year from the school and its students to get by.
Despite consecutive national football championships and surging ticket sales, the Bison received $6.2 million from the school to help balance its budget last year, according to data gathered by USA Today on more than 200 Division I National Collegiate Athletic Association programs.
NDSU students kicked in another $1 million – or about $73.50 each, on average – through a portion of mandatory student fees that go to athletics.
It’s a similar case in Grand Forks, where hockey is king. University of North Dakota students each chipped in about $218 in addition to a $5.9 million subsidy from the school.
All told, 43 percent of the Bison athletics revenues in 2012 came through subsidies, according to USA Today data. At UND, that was 47 percent.
But as collegiate athletics’ budgets have ballooned across the nation, the potion of tab North Dakota’s two largest universities pick up to pay for college sports isn’t just the norm. They’re some of the most self-sufficient programs among their peers.
The 74 other programs like NDSU and UND – Division I schools with teams in the smaller Football Championship Subdivision – that reported information to USA Today received nearly 70 percent of their revenues from their school and students, on average. Only four schools relied less on subsidies than NDSU. UND was just behind, at No. 7.
NDSU Athletics Director Gene Taylor said he’d like to make the program as self-sufficient as it can be. But without the multi-million dollar TV contracts, enormous stadiums and deep-pocketed donor bases that come with bigger schools and teams, hitting zero simply isn’t realistic, he said.
Hitting a 40-60 split – which NDSU almost did in 2012 – may be as good as it gets, Taylor said. He and others said that’s likely the case for all but the biggest programs, which have big-money TV contracts.
“There is no FCS program that’s self-supporting, and my guess will ever be self-supporting. It’s just not the model that FCS will be able to withstand,” said Kyle Moats, the athletic director at Missouri State University.
More money in, out
In every measure, NDSU athletics is pulling in far more money each year than it did back in 2005.
Ticket sales have tripled, as have revenues from broadcasting and other licensing money, according to the USA Today data. Its total revenues more than doubled between 2005 and 2012.
But in that time, the percentage of the athletics budget that comes from subsidies has fallen just slightly, from nearly covering 46 percent in 2005 to about 43 percent last year.
That’s because Bison athletics’ expenses have grown just as fast.
Coach and staff salaries doubled in that time period, as did scholarships for athletes. The program didn’t spend a dollar on facilities in 2005, according to USA Today’s data. Last year, it spent more than $500,000.
“Expenses have gone up because the demand to stay successful has increased,” Taylor said.
Amy Perko, executive director of the Knight Commission on Intercollegiate Athletics, said competition between schools has accelerated athletics spending, especially on coach salaries, personnel and facilities.
“The growing emphasis on winning and increasing TV market share feeds a spending escalation,” she said.
And that spending has helped feed an increasing reliance on subsidies nationwide, Perko said.
A big check
Officials from both NDSU and UND said they go into each year with a game plan for how much financial support they’ll need. Neither school simply cuts a check at the end of the year to cover all the losses.
For the past two years, Taylor said NDSU athletics has pulled in more revenue than anticipated, cutting the size of the checks the school had to write by almost $1 million.
The school’s funds for athletics come from a mix of tuition, taxpayer dollars allocated by the Legislature and special auxiliary funds.
About 23 percent of NDSU’s transfers to athletics come from tuition and state appropriations. The remainder is paid by auxiliary funds.
At UND, Vice President for Finance and Administration Alice Brekke said the school’s contribution to athletics – $5.9 million last year – comes from two primary sources: roughly 60 percent from a pool of money built by interest income and leasing land, and another 35 percent or so from tuition dollars and appropriations from the state.
Brekke said it hasn’t been a concern or priority to reduce UND athletics’ reliance on institutional and student support. Rather, she said there’s been talk year after year about what level of additional financial support – which she called a reality and necessity – is appropriate.
After receiving millions in subsidies last year, both NDSU and UND’s athletics programs ran a deficit: NDSU lost about $6,000, according to the USA Today data, while UND’s deficit was nearly $700,000.
Perko said the Knight Commission has never pushed athletics programs to become self-sufficient. She said the commission believes “athletics has an appropriate role in university life,” and one that may require a certain level of financial support from schools and their students.
Instead, their primary focus is on how universities’ athletics spending on each athlete has outpaced academic spending per student.
By that measurement, FCS schools such as UND and NDSU have done far better than larger programs, research compiled by the Knight Commission shows.
Schools with FCS football teams spent 3.1 times more per athlete than they spent per student, the Knight Commission analysis of 2010 median expenditures found. Compare that to schools with bowl teams, where teams spent 6.7 times more on athletes than on students.
But the Knight Commission does keep an eye on how those subsidies have grown along with overall spending. Perko said they noticed small declines in subsidization in the last couple years.
At NDSU, the size of transfers from the school and student fees to athletics both fell between 2011 and 2012. Those subsidies increased slightly at UND.
“Time will tell to see if that type of moderation will hold true,” Perko said.
Good at the top
Only seven programs at public universities received no subsidies in 2012. They’re the marquee programs with big football and basketball teams and lucrative TV contracts, like the Ohio State Buckeyes and the Oklahoma Sooners.
At the top: The Texas Longhorns, whose $163.3 million in athletics revenues last year was nearly 10 times the size of NDSU’s take. On the flip side, nearly 88 percent of the Central Connecticut State Blue Devils’ money came from the school or its students. Like the Bison and UND, the Blue Devils play football in the FCS.
With 37.1 percent of its revenues coming from the school – and not a cent from its students – the Missouri State Bears were the least reliant on subsidies among the 76 FCS programs in the nation that submitted data to USA Today.
The difference between programs with big-time, bowl-playing football teams and smaller programs like the Bears in the FCS, athletics director Kyle Moats said, is simply scale.
“We’re no different than NDSU, we’re no different than Ohio State,” Moats said. “It’s just the numbers are different. The revenue sources are the same.”
Crucially, programs with teams in the Football Bowl Subdivision can add tens of millions of dollars to their pot each year through lucrative TV contracts.
The Minnesota Golden Gophers athletics program, with its Big Ten football squad, pulled in $35.8 million last year through rights and licensing, according to the USA Today study. Rights and licensing revenue includes broadcasting contracts as well as corporate sponsorships and ad sales.
The Bison received $1.7 million in rights and licensing money in 2012.
“We’re never going to see those big TV contracts,” Taylor said.
Though their broadcast deals may pale in comparison – Taylor guessed they bring in $300,000 or $400,000 a year – they’ve become an important revenue source for NDSU athletics. And it’s a big departure from just five or so years ago, when the Bison paid to have their games on the air.
The students’ share
“Athletics couldn’t be here without the university, but the university couldn’t be here without athletics.”
That’s in the back of NDSU student body president Robbie Lauf’s mind as he considers how much NDSU students kick in to support athletics. Athletics received $1.1 million – about 6 percent of its total revenue – in fees from roughly 14,400 students.
Each year, NDSU’s student government doles out student fees, which are charged on a per-credit basis. Bison athletics get a big chunk of the student activity fee, which capped at about $131 per semester for full-time students last school year.
Lauf said he thinks NDSU students are happy to put their money toward athletics – about $73.50 each last year, on average. That buys each student entry into every Bison game – except football, for which students fight to quickly claim the roughly 4,000 available free tickets on Mondays before each home game.
“You definitely can’t get a season ticket at the dome for that,” Lauf said.
NDSU students’ share of the athletics budget has steadily decreased since 2005. It’s been the reverse at UND, due primarily to the school’s more recent jump to Division I athletics.
The average contribution through student fees at UND jumped from about $53.50 per student in 2005 to $218.25 each last year, according to an analysis of the USA Today data. Like at NDSU, UND students get free tickets for sporting events. But tickets to the most popular sport at UND, men’s hockey, are only available at a discount, not first-come, first-serve.
Brekke, UND’s finance executive, said student government officials signed off on those fee increases as school officials laid the groundwork to move up in collegiate athletics. After a five-year transition period, UND’s jump to Division I became official last summer.
Taylor said there’s been some early talk about boosting the student fees at NDSU, where students’ share of the athletics budget is one of the lowest among their peer FCS programs.
For all the money students and the school pumps into NDSU athletics and the revenue it brings in, Taylor said there are variables that don’t show up on its balance sheet: exposure, entertainment and goodwill.
“There’s not a real dollar value you can put on that,” he said.
Readers can reach Forum reporter Kyle Potter at (701) 241-5502