Expanding budgets getting critics' attention

ATHENS – In four days, SEC commissioner Mike Slive will kick off the conference's annual football media days with a pep talk.

He'll talk about championships, of which there were many last year; he'll talk about attendance, of which there is plenty every year, and he'll talk about academics, of which they are some high points.

Money will get a mention but probably not a big one, and that's not exactly fair to the almighty dollar because none of the rest of it would be possible without the huge financial infrastructure that now props up college sports at the elite level.

Consider this: Last year alone, Georgia fans "donated" $21.5 million for the right to buy football tickets and then spent another $13 million for the tickets themselves.

"I have to stop and pinch myself periodically about some of the numbers we have to deal with, but I would remind you that most newspapers have a section on sports every day and not any of them have a section on physics," said Michael Adams, president of the University of Georgia and chairman of the NCAA's executive committee. "This is something that strikes an emotional cord with the population at large. We are a population that loves sports, and we seem to particularly love intercollegiate sports."

Few people love it more than those in the Southeast. The SEC is the country's second-richest conference based on revenues reported to the Department of Education in 2006. In that year, the conference's athletic departments pulled in $687 million.

Even taking into account the fact that Mississippi State has the smallest athletic budget among BCS conference schools at $25.8 million, SEC schools have an average budget of $57.25 million. The Big Ten, which is powered by the country's richest school (Ohio State, $104.7 million), tops the list with an average of $64.3 million.

Florida ($82.4 million), Georgia ($79.2 million) and Tennessee ($69.9 million) each ranked in the nation's top 10 in budget size in 2006.

So everything is wonderful, right?

Wrong, say many observers, most notably the Drake Group, whose mission is to "help faculty and staff defend academic integrity in the face of the burgeoning college sport industry," according to its Web site.

"The real danger of what's going on with the expanding budgets is the athletic departments are really more and more separate from the institution," said David Ridpath, the director of the Drake Group and an assistant professor of sports administration at Ohio University.

While athletic department budgets still are a small percentage of overall university spending, they are on the move. Athletic spending rose more than twice as much as university spending from 1995 to 2001, according to a report by Cornell economics professor Robert Frank, which was prepared for the Knight Commission.

What's worse, says Ridpath, is that even considering the staggering sums of money that come into the organization, fewer than 20, and maybe as few as 10, athletic departments in the country have a true budgetary surplus at the end of any given year.

"It is a business, but it's a poorly run business," he said. "They are making a ton of money, but unlike you and I who are watching our checkbooks pretty good, they are spending money they don't have."

The accounting of college athletics is a murky world, with multiple ways to manipulate the figures, which is why very few athletic departments ever publicly acknowledge losing money. In fact, according to figures provided to the Department of Education, every SEC school at least broke even in fiscal year 2006. However, a review of more complete budgets provided to The Telegraph disproves that.

South Carolina, for instance, reported to the Department of Education that it broke even in 2006, but its complete budget reveals it lost more than $1 million that year.

"You can easily, for lack of a better phrase, cook the books on where a lot of this money is going," Ridpath said.

A report made in May by NCAA research director Todd Petr to the Knight Commission revealed that the 117 Division I-A schools in 2005 would have lost an average of $6.67 million if not for the average $7.69 million paid to those departments through student fees and institutional and government support.

Also, most athletic departments, which are designated as not-for-profit and have some tax-exempt status, don't count debts into their annual budget.

Even Georgia, w hich is one of the few actually making money and ended 2006 with a surplus ofmore than $20 million, would wind up deep in the red if all its debt were taken into account. The Bulldogs currently owe more than $100 million in loans taken out to complete facilities projects.

"The Atlanta Falcons could not operate like we operate," acknowledged Adams.

Financial prudence is the one of the top three concerns facing college athletics today, said Adams, but NCAA president Miles Brand and SEC commissioner Mike Slive have both said that mandating finances is not the place of governing bodies.

"It's neither a road to riches nor a road to ruin at current levels of spending," said Jonathan Orszag, an economist who helped prepare a report for the NCAA. "If the rapid rate of growth continues one should be concerned and focused on the impact of that increased spending on the student environment. At some point that higher level of spending could cause more harm than good. I don't think we've reached that point, but it's certainly something that folks should be focused on and continue to watch aggressively."

All numbers based on figures provided by schools to the United States Department of Education for fiscal year 2006

The Southeastern Conference
Alabama $68.6 million
Arkansas $47.9 million
Auburn $68.3 million
Florida $82.4 million
Georgia $72.9 million
Kentucky $57.1 million
LSU $64.9 milllion
Ole Miss $29.4 million
Mississippi State $25.8 million
South Carolina $53.1 million
Tennessee $69.9 million
Vanderbilt $40.4 million The Top Ten

Three SEC schools, led by Florida, are in the nation's top 10 based on the size of their athletic department budget

1. Ohio State $104.7 million
2. Texas $97.8 million
3. Virginia $92.7 million
4. Michigan $85.4 million
5. Florida $82.4 million
6. Georgia $79.2 million
7. Wisconsin $78.9 million
8. Notre Dame $78.1 million
9. Texas A&M $70.9 million
10. Tennessee $69.9 million Conference Breakdown

The Big Ten, led by Ohio State's $104.7 million budget is the richest conference in the nation. The SEC comes in second despite seeing its average hurt by the two Mississippi schools, who each have a budget of less than $30 million. Only three other BCS schools have a budget of less than $30 million (Cincinnati, South Florida and Washington State). Below is the average budget for each of the BCS conferences

1. Big Ten $64.3 million
2. SEC $57.25 million
3. Big 12 $ 55.9 million
4. ACC $49.3 million
5. Pac-10 $48.5 million
6. Big East $40.6 million

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