10 colleges say sports are in black

Arkansas Business, March 22, 2004 by Mark Friedman

IN THE FINANCIAL WORLD OF Arkansas college sports, the University of Arkansas at Fayetteville is the undisputed champion.

For the 2002-03 school year, the university's athletic department posted a net income of $12.3 million on revenue of $46.7 million, according to the latest figures available from the U.S. Department of Education.

The UA's athletic department made more money and generated more revenue than the combined total of 18 other college athletic departments in the state. The total net income for the other schools was a loss of $3.61 million, while their revenue was $35.3 million.

While the University of Arkansas is the only major Division 1 school in the state, it was one of 10 college athletic departments in Arkansas that reported positive net income for the 2002-03 school year.

Nine schools' athletic departments lost money. And Williams Baptist College of Walnut Ridge and Arkansas Baptist College of Little Rock reported the same revenue figures as their expenses, leaving the true financial picture unclear. The schools did not return a call to provide more financial information.

To compile the list on Page 12 of Arkansas universities and colleges' athletic departments based on net income, Arkansas Business used the unaudited figures the schools reported to the U.S. Department of Education.

In the few cases where the school reported the same figures for both revenue and expenses, Arkansas Business used revenue figures the schools submitted to the Arkansas Department of Higher Education.

While the big financial winner was the UA, Arkansas State University at Jonesboro lost the most money on its athletic department. Although its revenue was the second highest in the state at $6.9 million, its net loss was $2.4 million.

The U.S. Department of Education first started collecting the financial information on colleges in late 2001 to comply with the 1998 amendments to the Higher Education Equity in Athletics Disclosure Act. The information first appeared on the department's Web site, www.ope.ed.gov/athletics, in 2002.

The purpose of the information is to help prospective students and their parents research "athletic opportunities" at each school, the department said. The department doesn't offer guidelines as to how each student should use the information to make a decision, though.

UA

Even UA officials agree that their school is too large to be ranked on the same list for net income as the smaller schools across the state.

"We play in the Southeastern Conference," said Tom Dorre, associate athletic director for the UA. "It is one of the premier conferences in America."

Dorre also said the UA Athletic Department is the only one in the state, and only one of a handful in the nation, to be totally self-supporting.

He said any net income the athletic department generates stays in the athletic department "because one year we may not have a profit," he said.

The UA also spent the most on sports, $34.3 million. The other schools spent a combined $39.72 million for expenses in 2002-03.

Football

Of the 10 college football programs in Arkansas, three schools reported a net income.

Those three were:

* UA, with a net income of $17.3 million;

* Ouachita Baptist University at Arkadelphia, with net income of $532,493; and

* the University of Arkansas at Pine Bluff with a net income of $462,137.

However, the numbers UAPB reported to the U.S. Department of Education were sharply different than the numbers it reported to the NCAA for its Gender Equity Survey for the 2002-03 school Year.

In the NCAA report, UAPB reported football revenue of $507,184, leaving it with a loss of nearly $666,000. Overall, its athletic department had a net income of $120,978, according to the NCAA report.

Betty Hayes, senior woman administrator at UAPB who is listed as the contact person on the NCAA report, did not return several phone calls seeking clarification.

The U.S. Department of Education said a discrepancy with the NCAA numbers could mean a mistake was made on the NCAA report and then corrected for its filing, which is due by Oct. 15.

ASU lost the most for its football team--$125 million. ASU officials did not return calls to comment.

Harding University at Searcy's football team lost $688,588 for the 2002-03 school year Greg Harden, director of athletics for Harding, said that while he wasn't sure about the financial figures, he would expect most athletic departments to lose money.

"If you're trying to live off of your gate (receipts), which is mainly basketball and football, it's impossible to break even," he said. "You just can't do it."

Still, the athletic department is valuable because of the publicity it brings the school, which helps boost enrollment.

Nearly 20 years ago the school considered canceling its football team. But a number of students said they wouldn't attend the school without one.

Mainly the school provides athletics so students may participate in them, not to generate income, he said.

Recruitment

The lifeblood of any sports program is its ability to recruit high school athletes.