Student Fees Make UI Sports Profitable

HIKES IN TUITION, LARGER CLASS sizes, staff
furloughs, pay freezes and acrimonious
labor negotiations are common knowledge
for UI students, graduate employees
and staff. While many look at the exorbitant
pay raise of President Hogan, the
$150,000 rug and other expenditures for top administrators,
people rarely look at how student fees have been utilized
to make the UI
athletic department
turn a profit.
As the data shows,
the University of Illinois’
athletic programs
rely on student
fees to maintain their
profitability. One
exception to this is
the short-term revenue
boost from the
men’s basketball team
making it to the
NCAA championship
game in 2005. These
funds are reflected in the 2006-2007 budget. The other
exception came during the 2007-2008 football season
when the Illini earned a 9-4 record and played in the Rose
Bowl. These gains do not yield long term revenue increases.
This conclusion is also supported by several studies
including one from Peter Orzag during his tenure at the
Brookings Institute that said for every $1 a school pays to
build its athletic program, it gets $1 back in new revenue.
Spending more on sports programs does not yield
increase alumni giving, winning, net operating revenue or
academic quality.
Illinois is a rare college sports program due to their
profitability. As the NCAA Knight Commission report
noted: “Only 25 Division I sports programs (ed note:
approx. 10% of D-I programs) turned a profit in 2008
counting only their generated revenue and only 18 had
shown a profit consistently for five years.” Illinois has
been able to achieve this status due to the subsidies from
student fees.
Despite most programs running deficits, most universities
have continued spending on athletics. The NCAA
Knight Commission wrote in their report Restoring the
Balance that from 2005 to 2008, athletic spending
increased at more than twice the rate of academic spending
at near all of the 103 Football Bowl Subdivision
schools. On average, FBS schools spend more than six
times as much on athletics per capita than on academics.
And most schools are forced to tap general university
funds to balance their athletic budgets. In Illinois’ case, it
is student fees that have balanced the athletic budget.
Likewise, from 2006 to 2009, the average pay for a
head football coach for the top 99 big time public schools
in the NCAA rose 46% to $1.4 million. Illinois football
coach Ron Zook makes $1.5 million and is contracted
with the University until 2014. During Zook’s tenure, the
team has had records of 2-9, 2-10, 9-4 (the Rose Bowl season),
5-7 and 3-9.
Other universities have seen similar struggles. The California
system has seen class cuts, furloughs and 30+% fee
increases as the Golden Bear athletic program had $31
million in loans forgiven because the department could
not sustain itself. The University of Texas will increase
tuition 4% for the next two years and is experiencing budget
cuts/hiring freezes while raising the head football
coach’s salary from $3 million to $5 million. UConn’s
men’s basketball coach, Jim Calhoun, received a 5 year
$13 million deal in 2009. Meanwhile the school has seen
fee increases, raised tuition 6% in 2009 and is raising
tuition 5.4% for the 2010 academic year.
What sets the University of Illinois apart is that the athletic
department, at first glance, turns a profit. However,
when investigated, it is clear that the Athletic Department
has chosen to balance its sustainability on the backs of students
and their fees. Universities are academic institutions,
not sports factories. As a rabid sports fan, I am not proposing
an end athletic programs. Instead, I would like these
programs to be sustainable