Playing in the red zone
Written by Walter Hickey|
September 9, 2011
By Walter Hickey
The William and Mary football team’s 40-3 loss to Virginia Saturday night may have been a harrowing defeat, but the College’s Athletic Department is no stranger to losses. The entire department has been losing money for years, and the losses incurred by intercollegiate athletics have been largely covered through the use of student fees.
From a strictly financial standpoint, the Athletic Department is not profitable. The school has not broken even for any of the 23 intercollegiate sports offered in the six years (Fiscal Years 2004-2010) where financial data has been made publicly available. This is not unusual; there are very few profitable college football programs, and those that do make money are usually teams with lucrative television contracts and a presence in a BCS conference. For programs at the College’s level, losing money is just part of playing the game.
Most of the school’s athletic teams don’t charge admission fees, which means to remain viable, these sports rely on the support of private donors as well as the student athletics fee, which in 2011 is $742 per semester, or $1,484 for the year. Of the $6,566 the College charges each semester for in-state tuition and fees, just over 11 percent of that is earmarked for intercollegiate athletics.
Athletic Director Terry Driscoll said that the three sources of revenue for an FCS-level school such as the College are typically the student athletic fee, operating revenue like tickets or advertising contracts, and private support, the latter of which comes mostly from annual fund-raising and athletic endowment funding such as the Tribe Club.
The amount of money the student body must pay to subsidize the Athletic Department is a matter of debate. English professor Terry Meyers has been an outspoken opponent of the amount students are paying in athletics fees.
“I think we have a first-rate and admirable athletics program run by good people with the right values,” Meyers said. “My single objection is the way it is financed, on the backs of students, with what strikes me as a very expensive fee.”
The fee of $742 per semester is included in the College’s general fee, which is added on top of tuition payments. The general fee supports extracurricular activities and supplies funds to the Student Assembly, clubs and groups and externalities such as the Recreation and Student Health centers. The general fee is $1,845 per semester this year, with intercollegiate athletics comprising just over 40 percent.
Driscoll defended the fee amount. Compared to other Virginia CAA programs, he said, the College’s athletics program sponsors the largest number of sports, 23, and raises the largest amount of private funds taken as a percentage of revenue. The student athletics fee at the College comprises a smaller percentage of total revenue than at the other programs, he said.
For the 2009-2010 school year, the College Athletic Department raised 26 percent of its funds from external private sources, while 55 percent of its funds were from the student fee, according to documents Driscoll provided. That figure stands in stark contrast with those at Old Dominion University, where 73 percent of the departmental revenue is derived from student fees, and James Madison University, where that figure is 84 percent. Virginia Commonwealth University and George Mason, which do not have football programs, raise 79 percent and 83 percent of their funds through student fees, respectively.
For the Athletic Department, Driscoll said, it is a priority to generate as much income externally as possible.
“[William and Mary] athletics’ annual objective is to provide 50 percent of the revenue to cover its expenses each year,” he said.
Moreover, Driscoll said he is “not aware of any other Virginia FCS institutions having a similar objective.”
However, some of the figures could come as a surprise to members of the College community. The Flat Hat analyzed audits of the Athletic Department published annually for the NCAA, which cover the six fiscal years between June 30, 2004 and June 30, 2010. Over the course of the six years, the 23 sports had net losses of more than $30 million, which were then subsidized by the athletics fee.
The football and men’s and women’s basketball programs were individually reported, while the other 20 sports are calculated collectively. Over those six years, women’s basketball reported the highest losses, at $3.7 million. Football reported cumulative losses of $2.7 million, and men’s basketball reported losses of $1.15 million. The remaining $22.5 million in cumulative losses comes from the 20 other sports, with the combined other sports posting losses of at least $3.6 million each fiscal year.
Over the six years analyzed, student fees accounted for between 48 and 52 percent of revenue that the Athletic Department took in. This is, as Driscoll indicated, a significantly smaller percentage than at each of the other Virginia CAA schools.
The fee, however, is too much for Meyers, who said he “will be proposing to the Faculty University Priorities Committee a motion to step down the fee $100 a year for five years.”
Such a measure would reduce the portion of the general fee that goes to athletics to $1384 per student per year.
This would impact the Athletic Department’s bottom line. The College cannot use any state funds toward athletics, according to state legislation, and Tribe Athletics is required to be budget neutral or generate a surplus each year. In 2005, the only school in Virginia to earn a profit from its intercollegiate athletic department was Virginia Tech, which is a member of the FBS and has television contracts.
“It is rare that an institution at the FCS level would generate a surplus” without student fees, Driscoll said.
The fees have been steadily increasing, as the number of scholarships made available to athletes grows and as operation costs — which Driscoll said rise year after year — go up.