In case the American public ever forgets what college sports is about, the Fourth Estate is ready with the answer.
“Referring to big-time college sports as a business is merely stating the obvious.”
— Tara Sullivan, Bergen County (New Jersey) Record
“Remember, college sports is a business.”
— Pat Lynch, Arkansas Democrat-Gazette
“I told her that big-time college athletics is a business, and it has nothing to do with education. I told her, essentially, that’s just the way it is.”
— Rick Cleveland, Jackson Clarion-Ledger
Indeed, the expression “college sports is a business” is among the most commonly accepted five words in sports journalism today. The phrase is based on the fact that a large amount of money surrounds the enterprise and the supposition that anything involving so much money must be a business.
The textbook definition of business (“a commercial or industrial enterprise”) doesn’t help much because everybody agrees that college sports involves commercial elements. But, for heaven’s sake, what doesn’t? The institution of religion generates money that dwarfs the revenue of college sports, but few people characterize their church as a business. If the standard extends that far, then everything is a business. What’s the point in even making the distinction?
How good it would be if people could be more tolerant on questions such as this. Quite clearly, it’s not absolutely wrong to call college sports a business, but it’s not necessarily correct, either. Why are so many commentators so didactic about the expression?
For those who want to consider the issue further, here are a couple of key thoughts:
• The numbers that critics of college athletics use to illustrate its wealth almost always focus on revenue. Expenses receive much less attention, save the occasional rant about highly paid coaches. While salaries, in fact, are the single greatest expense for athletics programs, they represent much less than one-half of total operating costs at the average institution. And those total operating expenses are a great load to bear. For the most recent reporting period, the median expense for Division I’s Football Bowl Subdivision was $35.8 million while the median generated revenue was $26.4 million. The balance came from institutional support. The deficit was even more stark at Football Championship Subdivision schools and Division I institutions that don’t sponsor football.
• Exhibit A for illustrating the excess of college sports usually is the Association’s $6.2 billion, 11-year media contract. For the record, for fiscal year 2007-08, the NCAA received $548 million in television and marketing rights fees, and that certainly is a lot of money. It is, however, a number that desperately needs context. For example, $548 million would run the University of Michigan for less than two months. If the Gannett Company, the owner of USA Today, merely matched its 2007 revenue during an 11-year period, its income would exceed $80 billion. Microsoft would make about $562 billion.
In fact, astute observers understand that the NCAA’s revenue is a relatively small part of the money generated in college sports each year. There are 119 Division I FBS programs, and the annual overall generated income at that level is $3.9 billion. But the collective expense is $4.6 billion. As businesses go, that’s hardly a success story.
It is possible, of course, that institutions of higher education conduct athletics programs because of the value they provide for participants and spectators and not because of the money they generate. In most cases, the so-called business exists to make as much revenue as possible, leaving it to the institution itself to cover total expenses and realize the benefits that come from college sports. That’s not business, at least not in the classic sense. It’s more akin to an investment.
One other thought: This is one area in which athletics administrators can transmit a mixed message. They truly do need to generate revenue, and they themselves often will declare that “college sports is a business.” Or, as a now-departed athletics director at a smaller BCS program exclaimed, “There’s an arms race going on, and we’ve got to get in it!”
The attitude is understandable since athletics directors often are judged on financial outcomes. Still, though they may say the words, most athletics directors and business managers know that they are not overseeing a per se business.
After all, they know what happens in the true business world when the company comes up $9 million short year after year. But it’s almost unheard of for college sports programs to go “out of business,” even if they are losing money.
Maybe that’s because they weren’t really businesses to begin with.
“College sports has turned into one of the biggest businesses in the whole sports industry. I use the word industry because that’s what sport is. Sports just doesn’t provide entertainment. It provides thousands and thousands of jobs. Those salaries have to be paid for.”
— Bob Knight, former Division I basketball coach
“College sports is a cruel, cold-hearted business for players and coaches.”
— Marc Isenberg, moneyplayers.typepad.com
“You don’t need an 800 score on your math SAT to know that college sports is big business. But just how big a business might still surprise you. The National Collegiate Athletic Association estimates that all college sports teams generated $4.2 billion from its fans and various partners, such as broadcasters and sponsors.”
— Chris Isidore, CNNMoney.com
“College athletics are big business. That’s a fact; they make big money and an
even bigger impact on our society today.”
— Kam Spaulding, Rhode Island College Anchor
“College sports is big business right now and not just at the largest universities in
the nation. Even smaller schools have to maximize revenue to offer ten or 12 teams of student-athletes
for the season.”
— Sports careers page, About.com