Division II

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Publish date: Sep 11, 2013

Division II athletics spending keeping pace 
with institutional budget increases

By Brian Burnsed

While athletics expenses have risen significantly among Division II institutions over the past decade, the spending hike is congruent with institutional spending increases and has not significantly impacted school-wide budgets, according to data collected by the NCAA.

Data from the most recent report on athletics revenue and expenses in Division II shows that in the nine-year period from 2004-2012 the median deficit  for athletics departments that sponsored football programs rose by 91.6 percent, from roughly $2.4 million to $4.5 million, annually. That means that expenses at these programs exceeded generated revenues (e.g. ticket sales, concessions, NCAA and conference distribution) by about $2.4 million in 2004 and that disparity rose to $4.5 million last year.

The institutions themselves cover that gap through student activity fees and institutional distributions to the athletics department. However, while the demand for institutional funding has nearly doubled over the past decade, athletics spending at schools with football programs has only risen from about 5 percent of overall institutional spending to 7 percent over the same period.  

“Though athletic expenses exceed revenues on every Division II campus, the reality is that Division II’s partial-scholarship model is an attractive investment for many institutions in today’s economic climate,” said West Texas A&M President J. Patrick O’Brien, chair of the Division II Presidents Council. “Athletics actually serve as a driver of institutional revenue, through enrollment, for many Division II colleges and universities. It is an extension of the educational process that normally takes place in the classroom – providing a learning environment for student-athletes to master the soft skills of leadership, time management, teamwork, to name a few.

“Not only does the Division II model offer competitive athletic and championship opportunities for student-athletes, it also promotes an environment that connects students, alumni and community leaders with our campuses.”

Those trends are not limited to Division II programs with football. The median loss at athletic programs that don’t sponsor football rose from $2 million to $3.6 million – an 82.7 percent increase – over the same time span. However, that spike only caused median athletic spending to jump from 4 percent to 5.5 percent of overall institutional budgets.  

It is notable, however, that the increase in athletics expenses over the last decade at schools that sponsor football has outpaced the growth in revenue generated by athletics programs. While generated revenue has risen by 62.5 percent for schools with football, athletics expenses at those schools have risen by 82.9 percent. At non-football schools, the generated revenues and athletics expenses have risen at roughly the same rate.

Part of the reason that the spike in athletics spending hasn’t significantly impacted overall institutional spending is because athletics programs are bringing in more student-athletes, which helps generate more revenue for the institution as a whole through tuition and fees.

The average number of student-athletes at Division II schools that sponsor football has risen by 12 percent – from 376 to 421 – since 2004. Non-football schools have seen a 30 percent spike in student-athletes, from 204 to 264, in the same timeframe. Though some of these athletes are adding more athletics expense via scholarships, they’ve generated revenue for the institutions, which has helped ensure that increased institutional spending on athletics doesn’t significantly outpace school-wide budget growth.  

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