Why the UConn athletic department’s $41 million deficit might not be quite as bad as it sounds (Putterman)



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Why the UConn athletic department’s $41 million deficit might not be quite as bad as it sounds

>>“Most schools are choosing to spend more than they generate in revenue," said Schwarz, who has written for publications including FiveThirtyEight, Deadspin and VICE and runs his own blog called Sportsgeekonomics. “That tells me that the wide consensus across a whole bunch of different kinds of schools is that the off-the-books benefits that athletics provides are worth spending a little bit of money." <<

>>When Schwarz says athletics are worth “a little bit of money” to major universities, he means $10-20 million, the amount that an average Division I school pays each year to maintain an athletic department, not the hefty $41 million figure that UConn spends. Still, Schwarz said, UConn’s official financial statement almost certainly overstates its deficit, due in part to accounting practices used in athletic departments across the country. <<

Thought this was an interesting point:

>>In theory, any bed taken up by an athlete with a scholarship could otherwise be filled by a non-athlete paying full tuition.

But Schwarz says that’s not necessarily true. At least some of the dorm rooms and lecture halls currently occupied by athletes would otherwise be filled by students paying less than full tuition, sometimes much less. And when athletic departments charge themselves for partial scholarships (which typically go to athletes in nonrevenue sports), it doesn’t credit itself for the portion of tuition that those athletes do pay to the university. For example, if a tennis player chooses UConn specifically because of his ability to play tennis for the Huskies, then pays half of the out-of-state tuition rate, that could arguably count as revenue generated by the athletic department. Instead, that player gets marked as costing the department thousands of dollars in a partial scholarship.<<
 

UConnDan97

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I've always argued and will continue to argue that collegiate sports are the best possible advertising dollars you could ever spend. It generates so much more interest in your school than does any other marketing campaign by a long shot...
 
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That $41 million is a fiction. It is accounting not actual dollars. And it is likely bad accounting pursuant to the dollars actually generated by sports.

Scholarships actually cost the university nothing. In fact, sports teams make scholarships to the university more valuable. Sports also increase the number of applicants to the university increasing what the university can charge for admission.

Also, schools do not calculate the amount of earned media their athletic programs generate. For a school like UConn that is likely to be worth tens of millions of dollars.

In other works that $41 miillion dollar loss is a bad joke.
 

polycom

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I've always argued and will continue to argue that collegiate sports are the best possible advertising dollars you could ever spend. It generates so much more interest in your school than does any other marketing campaign by a long shot...
As long as you're good as Jmick said. Alabama would agree with you.
 

storrsroars

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I've always argued and will continue to argue that collegiate sports are the best possible advertising dollars you could ever spend. It generates so much more interest in your school than does any other marketing campaign by a long shot...
Well yeah, now that Playboy's "Top Party Schools" issue has become irrelevant.

Anyway, I applaud the article. In isolation it's good news. However, even taking the accounting into consideration, other schools would be doing same, so we're among the biggest losers financially regardless.
 

UConnDan97

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As long as you're good as Jmick said. Alabama would agree with you.
You're always good at something, and thankfully our women's sports have been great historically.

But to the point of football having to be good; not necessarily. It certainly helps, but historically bad teams have a couple of good years and it washes it all away. For more on that, look up Northwestern, Rutgers, Temple, Wake Forest, Duke, Purdue, etc.

Just fold in a couple of good years and you're good to go...
 

polycom

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You're always good at something, and thankfully our women's sports have been great historically.

But to the point of football having to be good; not necessarily. It certainly helps, but historically bad teams have a couple of good years and it washes it all away. For more on that, look up Northwestern, Rutgers, Temple, Wake Forest, Duke, Purdue, etc.

Just fold in a couple of good years and you're good to go...
You just named all private schools, different ball game for them. You also named schools that are in geographically dissimilar places.
 

UConnDan97

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You just named all private schools, different ball game for them. You also named schools that are in geographically dissimilar places.
Okay; Illinois, Indiana, Kansas, Kentucky, Cal, Washington State, etc.

By the way, Temple and Rutgers are both public schools and both in our geographic area. Both were also historic football dumpster fires who have had sporadic good seasons which make people forget the decades of stink...
 

CL82

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Interesting read. Scholarships and XL Center rent account for $20 of the $41 million. A portion of the remainder is due to club sports and student recreation.
 

polycom

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Okay; Illinois, Indiana, Kansas, Kentucky, Cal, Washington State, etc.

By the way, Temple and Rutgers are both public schools and both in our geographic area. Both were also historic football dumpster fires who have had sporadic good seasons which make people forget the decades of stink...
I didn't notice Temple or Rutgers in your OP my bad.
 
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Well yeah, now that Playboy's "Top Party Schools" issue has become irrelevant.

Anyway, I applaud the article. In isolation it's good news. However, even taking the accounting into consideration, other schools would be doing same, so we're among the biggest losers financially regardless.
Again, a writer is trying to analyze a complex financial situation in a simplistic way.

First, revenues are not allocated to the sports that actually generate the revenues, so in the current depressed state of football and men's basketball, the three big sports at UConn (football, men's and women's basketball) probably break even or have a small loss. The problem that UConn has over most P5 schools is that the football program right now does not generate outsized profits to fund the non-revenue sports. UConn is currently funding the non-revenue sports to compete like a P5 school.

Next, UConn has deals with The Rent and the XL Center that costs UConn money, but creates better financials for The Rent and the XL Center. Put all basketball games at Gampel and hockey games on campus and you will see large red ink at the XL Center and better financials for UConn athletics.

Some student activities and facilities fall under the AD budget. Did you play intramurals, play pick up basketball, do laps in the pool, etc? Student fees do benefit the AD, but students benefit as well.

I'm not saying the AD is in good financial condition, but UConn does a poor job of presenting the information and educating everyone about what the numbers mean.
 
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Rutgers, Temple AND Purdue are each very public schools. 2 of the 3 are also located in the northeast and have experienced less football success then relatively mediocre Purdue. Pun entirely intended, but UConnDan97 rebounded better with basketball schools IU, KU and UK.
 
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I've always argued and will continue to argue that collegiate sports are the best possible advertising dollars you could ever spend. It generates so much more interest in your school than does any other marketing campaign by a long shot...
made the same argument in a different thread.
 

junglehusky

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This should go well...

I voted yes.

TRIGGERED MUCH, BONEYARD????

But seriously, as the "losses" associated with tennis scholarships may be funny money, so too are the economics of a piddling football program in a not-quite-power conference with no natural rivalries. I don't doubt that big time success in football, MBB and increasingly WBB boosts applications especially out of state. But as JMick said... you have to win.
 

nelsonmuntz

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The state of Connecticut has a massive fiscal deficit that will only be solved by getting cops and teachers to take significant cutbacks in their pensions. Given that backdrop, anyone who thinks that the UConn athletic department's budget is not a crisis is delusional. There is no money to cover football, or almost any other sport that doesn't pay for itself. UConn's athletic department is broke.

I feel like Marvin from the early seasons of Entourage explaining to Vince and E that there is no money left. I would post a clip but they are all NSFW.
 

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