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NCAA board chairman: Big schools' problem isn't revenue, it's spending

Steve Berkowitz
USA TODAY Sports
Kansas State president Kirk Schulz.

Kansas State president and NCAA board of governors chairman Kirk Schulz says that, for the most part, big-time college sports programs have plenty of money.

The issue is what they do with it.

"I think it's a spending problem, not a revenue problem, at a lot of places," Schulz told USA TODAY Sports in an interview last month. "It's because the school down the road has this and we decide we have to have it, too, so that we kind of keep up with them. You can't say that keeping up with the Joneses is not part of college athletics. It certainly is.

"If you said, 'Kirk you've got 16 sports and a $60 million budget,' most people out there would go, 'Well, you ought to be able to run those pretty nicely with that kind of money.' So, a lot of it is our decisions — and I say 'our,' collectively, Division I schools — about how we spend that money has a lot to say about how much flexibility we have in there. Because if we have some extra money, almost all of us will go build another facility or we'll renovate the locker rooms or we'll do something. And I think that constant churn is what makes that money — which should be enough to run everything really well — seem like not enough."

DATABASE:Every Division I public school's finances

In addition to spending on facilities, Schulz noted that, for example, with the compensation for a football head coach: "We double it or go from $3 million to $5 million, and all of a sudden that takes a $2 million surplus and it's not there anymore."

Schulz said the money that "should be enough to run everything really well," includes covering the cost of the additional food schools now can provide athletes; the cost-of-attendance differentials schools soon will be able to provide to athletes; and the prospect of Bowl Subdivision football players and Division I men's basketball players being able to receive deferred compensation for use of their names, images and likenesses as a result of U.S. District Judge Claudia Wilken's ruling and injunction in the Ed O'Bannon antitrust lawsuit that is now on appeal.

"Yes, total cost of attendance or Judge Wilken's plan or having a training table or food for the student-athletes — whatever those different things are," he said. "When I say run it well, it means you could adequately fund all of that and you're not running yourself at a deficit."

While the numbers that Schulz cites are from the perspective of an official at Big 12 Conference school — and people at schools and conferences outside the Power Five might have a different view — some figures from USA TODAY Sports' analysis of NCAA Division I public schools' athletic finances dating from the 2004-05 school year are worth considering. Looking at data gathered in conjunction with the Indiana University's National Sports Journalism Center:

— In 2013-14, the 230 Division I public schools' generated revenue — not counting money from student fees, university funding or direct government support — grew $445.3 million from the year before. Their operating expenses grew by $476.1 million.

Schools increasing their collective spending faster than they increase their collective revenue is not new. It has occurred in most years analyzed, although in 2013-14, the difference between the two growth rates — $30.8 million — was much lower than it had been. In each of the three previous years, the difference had been at least $139 million.

—In 2013-14, there were 16 schools with total operating expenses of at least $100 million and 10 more with total operating expenses of at least $90 million.

In 2008-09, there were four schools with expenses of at least $100 million and two more with expenses of at least $90 million.

— In 2004-05, schools' greatest expense item was scholarships.

In 2013-14, schools' greatest expense item is coaching salaries and benefits ($1.5 billion). Scholarship spending is No. 2 ($1.38 billion), but administrative and support staff salaries and benefits are a close third ($1.34 billion), followed by spending on facilities ($1.05 billion).

It is also notable that the number of public schools covered by the USA TODAY Sports analysis has grown from 210 in 2004-05 to the 230 in 2014-15, a reflection of the overall growth in the NCAA's Division I membership — growth that has occurred amid various grim financial projections for athletics programs.

Speaking about the movement of money from universities to athletics programs through institutional funding and student fees and the movement of money from athletics programs to universities through scholarship payments and other transfers, Schulz touched on the inter-relationship between universities and their athletics programs.

"We're mutually dependent on each other," he said. "A lot of our athletic donors give more money to academics, but if they don't feel good about athletics, they may not make that big academic gift either. So even though the finances are separate, the two really are intertwined a lot. The success of one really helps the other and vice-versa."

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