The average profits reported by institutions whose revenues exceed expenses are significantly higher over the last reporting period, while the average deficits reported by the remaining schools are likewise higher, according to the latest study of revenues and expenses at NCAA Divisions I and II institutions.

In Division I-A, 48 institutions reported revenues that exceed expenses (not including institutional support), which is up from 43 in 1997, the last time the study was done. But the average profit for those 48 institutions increased dramatically from $1.7 million in 1997 to $3.8 million in 1999. The 124 percent increase is the largest in any two-year period since the NCAA began studying institutional revenues and expenses.

At the same time, the average expenses for those 48 institutions also increased, from $2.8 million in 1997 to $3.3 million in 1999. But profits increased at a higher rate.

"Obviously, something on the revenue side has increased more than on the expense side," said the study's director, Daniel L. Fulks, who also directs the accounting program at Transylvania University in Lexington, Kentucky.

"We also see that the top sources of revenue -- ticket sales, alumni contributions and radio/television revenue -- all increased. So, I don't believe the increased profit is from reductions on the expense side."

Indeed, ticket sales in Division I-A went up 16 percent since 1997 and still constitute the largest source of revenue (27 percent) for Division I-A athletics programs. Revenue from alumni and other donors showed the largest increase from 1997, however--up 29 percent. Fulks said that tends to support an apparent boom in facilities over the last two years. He cautioned, however, that how those dollars are accounted for isn't always clear.

"Many Division I-A schools have expanded their facilities with private funds, which are counted as revenue, but with our operating expenses in this study, we do not include costs of new facilities or debt services," he said. "Such costs usually are reflected elsewhere in the institutions' budgets."

The number of institutions reporting revenues over expenses (without institutional support) has remained consistent over the past several years. In 1995, that figure was 41, down slightly from 43 in 1993 and 48 in 1989. However, the number of institutions with more expenses than revenues has steadily increased, from 35 in 1989 to 42 in 1993, 46 in 1995, 55 in 1997 and 56 in 1999. The average deficit for those institutions also has increased.

The number of institutions reporting revenues over expenses in 1999 -- including institutional support -- is 74, but Fulks said the study is more meaningful if institutional support is excluded, since the resulting figure represents the true cost of the athletics program to the university.

The NCAA has conducted the study, "Revenues and Expenses of Divisions I and II Intercollegiate Athletics Programs/Financial Trends and Relationships," under Fulks' direction every other year since 1993. Previous studies were conducted outside the NCAA beginning in 1985. The study examines virtually all sources of revenues and expenses for intercollegiate athletics programs. A similar study in Division III will be released later this fall.

Football

Results of the latest study indicate that revenues exceed expenses for about two-thirds of Division I-A football programs, though the number of institutions reporting a profit from football has declined slightly from 70 in 1997 to 67 in 1999.

The average profit continues to climb, escalating from $5 million in 1997 to $6.4 million in 1999. In 1995, the average profit from the 60 institutions for which revenues exceeded expenses was $3.9 million.

Fulks said the sharp increase beginning in 1995 may be the result of increased payouts from bowl games and continued increases in stadium capacities.

"The two big differences between institutions making profits and institutions showing deficits in football are seating capacity and revenue sharing in conferences," he said. "And that's the way it's been for many years."

In Division I-A, football brings in about 67 percent of the total athletics revenue, a percentage that has been consistent since 1993. Also consistent is the percentage of expenses for football -- 55 percent in 1999 compared to 57 percent in 1993. In Division I-AA, however, football programs accounted for only 37 percent of revenues in 1999 and 43 percent of expenses.

Basketball

In men's basketball programs at Division I-A institutions, the percentage of institutions reporting a profit decreased slightly from 74 percent in 1997 to 71 percent in 1999, but the average amount of profit increased from $2.2 million to $2.3 million. Institutions that reported deficits in men's basketball lost an average of $290,000, the same as in 1997.

In women's basketball programs at Division
I-A institutions, the percentage of institutions reporting a profit rose from 2 percent in 1997 to 9 percent in 1999, but the average profit decreased from $270,000 to $110,000 (45 percent). Interestingly, while nine institutions reported revenues exceeding expenses in women's basketball, 12 Division I-A institutions reported profits in overall women's programs. Fulks said that may be because institutional support sometimes is included in the reporting of individual programs.

"We can take institutional support out of the total revenues, but we are not able to remove it from the individual program numbers," he said.

Fulks also said the study doesn't account for what he calls "indirect" institutional support. For example, when the institution's athletics facilities are maintained by the institution's physical plant, the cost doesn't appear in the athletics budget but on the institution's maintenance budget.

"Or academic support might be in student affairs rather than athletics," Fulks said. "So the program numbers can be a little misleading because we don't always know about the institutional support."

A significant trend the study clearly points out, however, is the increased attention to women's programs on the expenses side. In Division I-A, grants-in-aid for women's programs increased 26 percent from 1997, while salaries and benefits grew 43 percent. Total expenses for women's programs increased by 20 percent.

Other information

For Division II athletics programs with football, 12 institutions reported revenues exceeding expenses, but overall in the division, average expenses exceeded revenues by $500,000 ($1.95 million to $1.45 million).

Revenue from radio and television rights fees decreased by about 80 percent in Division I-AA, while student-activity fees increased by 12 percent.

The average profit for men's programs in Division I-A was about $4 million in 1999, while the average deficit for Division I-A women's programs was about $2.4 million. In Division I-AA both men's and women's programs averaged a deficit of about $850,000.

The entire report is available from NCAA publishing at 888/388-9748.