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DIII report shows alignment between athletics and institutional spending

By Gary Brown
NCAA.org

Data from the most recent Division III revenues and expenses report show that the division is doing a good job of funding athletics participation opportunities without overly taxing institutional budgets.

The first report on athletics spending in Division III since 2002 shows that for schools offering football, athletics spending as a proportion of total institutional spending has moved only slightly – from 3.5 percent in 2005 to just over 4 percent in 2009. And for the non-football schools, athletics spending stayed fairly flat, between 2 and 2.5 percent of total spending.

Those percentages are significant, given that student-athletes compose roughly 30 percent of total enrollment in most Division III schools.    

The report comes at a strategic time for Division III, since the Presidents Council this fall asked the national office research staff to explore providing more comprehensive information on athletics spending in the future – including dashboard indicators – to help inform spending decisions on their own campuses. 

The report through the 2009 fiscal year is based on data submitted voluntarily from about 80 percent of the Division III membership. The data were solicited in conjunction with the Equity in Athletics Disclosure Act. The report compared institutions that sponsor football with those that don’t, and it also focused on the proportion of student-athletes to undergraduate enrollment.

“The idea of presenting the data at our Presidents Council meeting last fall was to get presidents thinking about the relevance and utility of the information,” said Widener University President and Council chair Jim Harris. “What we’re hearing so far is that, yes, there is an interest in a more robust reporting.”

Among the findings in the report was that the median spending on athletics is about $2 million for the 2009 cohort (the median expenditure in Division I is about $16 million). No Division III programs in the report generated revenues over expenses (only 14 schools in Division I do).

Other key findings include:

• The median expense for football schools is about $2.6 million and $1.3 million for non-football institutions. The average cost of a football program is about $350,000.
• Spending ranged from $277,000 to $13 million. Seventy-five percent of the institutions in the cohort spent less than $3 million. Ninety-five percent spent less than $6.2 million.
• The top three line items in expenses are salaries and benefits (about 40 percent), indirect institutional support (such as utilities for facilities, maintenance and insurance, which account for about 19 percent for football schools and 25 percent for non-football institutions) and travel (13 percent for football and 12 percent for non-football). Those represent about 70 percent of total athletics budgets.

Transylvania Faculty Athletics Representative Dan Fulks, a professor of accounting who has been the lead consultant for compiling revenue and expense data (in all three divisions) for the NCAA, said the effect of football on Division III programs is reflected in a host of data points.

“Although the median cost of football itself is about $350,000, the median total expense for the DIII program with football is more than double that of the non-football school,” Fulks said, though he noted that the cost-per-athlete is mitigated somewhat by the additional number of student athletes football provides.

“Costs run higher in virtually all sports for football schools, with substantial differences in salaries and benefits, in particular,” Fulks said. In addition, football schools sponsor an average of 19 varsity sports, while non-football schools sponsor 14.

Total expenses have increased significantly since 2004 (67 percent for football schools and 90 percent for the non-football schools), but Fulks said some of that can be attributed to inflation.

“For example,” he said, “although women’s program expenses for football schools increased by 13 percent from 2008 to 2009, more than 3 percent of this was caused by inflation. And for the non-football schools, after removing the 2 percent inflationary gain, men’s expenses actually decreased by 3 percent from 2008.”

Overall, though, Fulks said the report paints a positive picture of fiscal responsibility that aligns with what former NCAA President Myles Brand wanted to see in terms of keeping the growth rate of athletics spending to the same level as that of the total institution’s budget.

“I believe we are approaching that goal, without dropping the number of sports offered or reducing the number of student-athletes benefitting from the experience of varsity athletics,” Fulks said. “I question whether there is any other segment in our colleges and universities in which the cost per capita is as impressive.”