WSJ Article on Lax and Net Revenue per School

WSJ Article on Lax and Net Revenue per School

New postby Mr T on Fri Oct 23, 2009 12:37 pm

Wall Street Journal sports page has an article today about the median cost of specific college sports. Only football ($1,950,000) and basketball ($518,000) make money. No surprise there. But lax was at #3 for highest losses at $640,000, behind baseball at $709,000 and track & field at $657,000. I recall reading that lax was an attractive option as a new sport because it was relatively inexpensive. Perhaps not. $640,000 is a significant drain on resources.

http://online.wsj.com/article/SB1000142 ... 54084.html
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Re: WSJ Article on Lax and Net Revenue per School

New postby jhu7276 on Sat Oct 24, 2009 10:09 am

haha...fencing HAS to lose money...only fans that show up are parents and friends of the fencers...hehe...probably even at Olympic level also...hehe

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Re: WSJ Article on Lax and Net Revenue per School

New postby gennylax on Mon Oct 26, 2009 9:13 am

Interesting that hockey loses less than lacrosse...I would have thought the cost of having an ice rink alone would cause a loss in hockey, not to mention the gear and Canadian scholarships....is this because they tend to draw larger crowds than lax?...Also, does anyone know what the equipment costs are for D1 lax programs?..if a team is sponsored, do they get everything for free, or just at a steep discount? It seems like the amount of "free" stuff they give out to some teams could be a large expense
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Re: WSJ Article on Lax and Net Revenue per School

New postby jhuck-80 on Mon Oct 26, 2009 10:21 am

That might have been the most meaningless and un-insightful article I have ever read. It may be true that football and basketball make money, and everything else loses money. It might also be true that lacrosse is one of the most money-losing enterprises in D1 sports. But based on this article, how the heck do we know? The article doesn't say anything other than a list of figures, along with some very broad speculation.

The gains and losses are based on what? What went into this study, and what was left out?

Also, the revenue sports made money and the non-revenue sports lost money. In a follow up, the sun is expected to rise in the east, it will be cold in the winter, and a bear was observed relieving itself in the woods.

Big surprise that the sports that require somewhat specialized facilities (track, lacrosse, hockey, soccer, swimming) cost more than those that can be played in a multi-use gym facility (say, volleyball) or don't need facilities at all other than a locker room (say, cross country).

Another big surprise: the NC$$ produces a report that shows that the money-making sports make a lot of money, and the also rans are a financial drain. Does the report give any consideration in the figures for the multiple uses (or non-uses) of costly facilities? Does it discuss how the entire university and the surrounding community benefits from the presence of a pool or a track or an athletic field (unlike the fields and courts for the revenue sports, which are generally off-limits to anyone without God's permission to walk on the hallowed grounds or hardwood). Does it mention, for example, that pools are used by the entire student body, the water polo team, and frequently are also rented out to club swim programs for use when the swim team is not practicing? Or that schools will make their athletic facilities available for all sorts of high school and youth sports events and tournaments? I would be shocked to find out that local youth basketball tournaments are held on the varsity court at Rupp Arena, or that a youth football championship was played within view of Touchdown Jesus. How are those factors considered?

The article states, "you name it, and colleges lose money on it." Leave it to the NC$$ and the WSJ to imply that collegiate athletic programs exist for profits, not for the competition and other things that sports programs bring. "Thank you for watching our 30 second spot about athletes that do not go pro. We will now return to our 24 hour coverage of ex-jocks shilling for big-name football and basketball programs that exist almost solely for producing your next generation of NFL and NBA players, interspersed with endless Bud Lite and 'Built Ford Tough' truck commercials."

For that matter, we might as well list how much of a financial "drain" that troublesome Political Science department is, or how much money is wasted on buying materials for that stupid library.

Finally, how obscene is it that the University of Florida made $50 Million on football and basketball last year? Where, exactly, did that money go, and what was the "cost" to the university to turn that sort of a profit?
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Re: WSJ Article on Lax and Net Revenue per School

New postby hoohee on Mon Oct 26, 2009 11:55 am

Good points and questions, jhuck. You should submit that as a letter to the editor at the wsj.

Another point: Something that doesn't get considered is the number of students who attend a college and pay tuition because they can continue to play their sport there. I saw an article -was it here on laxpower?- about the growth of D3 football because schools know that kids want to keep playing so they offer the sport and then collect tuition from the kids, which turns the sport into a money-maker for the school. I suspect that the growth of lacrosse has been spurred at least in part by the same considerations. If lax loses $600K but 40 kids attend the school and pay $30k/ea. in tuition, the bottom line is that lax brought the school $600K in extra revenue, it didn't cost the school a penny.
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Re: WSJ Article on Lax and Net Revenue per School

New postby ggait on Mon Oct 26, 2009 12:09 pm

This is exactly why you don't see D1 mens lacrosse teams breaking out at places like Michigan, Florida State, BYU, etc. In fact, the costs of adding a D1 mens team are actually much higher than this article suggests, because you typically have to add two money-losing womens varsity teams for Title IX.

Schools are adding D3 mens teams, however, to make money. D3 costs are less than D1, and lax helps the schools attract two things they need more of (i) additional male students and (ii) students who are willing/able to pay full freight tuition.

I don't think anything is going to cause growth in D1 mens lax. But here are a few ideas that would at least lower the cost of keeping a team around:

1. Reduce or eliminate D1 lax scholarships. The 12 permitted schollies don't really make that much impact on college affordability once they are split up among 45 players, but they do raise team costs. Just get by with merit and financial aid like the Ivy and Patriot Leagues do.

2. Set a roster size limit of 30 players. You really don't need 45 to 50 kids on the squad. This would cut the direct costs of the mens team and would also reduce the cost of balancing a mens lax team out for title IX.

3. Except money-making sports from the Title IX calculations. Mens hoops and football generate the cash that pays for all the non-revenue sports. Just require the schools spend that net revenue equally on mens and womens non-revenue sports.
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Re: WSJ Article on Lax and Net Revenue per School

New postby hoohee on Mon Oct 26, 2009 12:22 pm

ggait wrote:3. Except money-making sports from the Title IX calculations. Mens hoops and football generate the cash that pays for all the non-revenue sports. Just require the schools spend that net revenue equally on mens and womens non-revenue sports.


That's a really good idea that I hadn't heard before. Makes perfect sense.
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Re: WSJ Article on Lax and Net Revenue per School

New postby cnylax on Mon Oct 26, 2009 1:01 pm

Or, as Bill Tierney once stated(paraphrasing), "....Title IX is a good rule but it is being misapplied. Football skews the number of male athletes given the size of the roster. Because football funds most other sport teams, then football should not be part of the Title IX equation." I agree wholeheartedly.
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Re: WSJ Article on Lax and Net Revenue per School

New postby laxflea on Mon Oct 26, 2009 1:14 pm

Has anyone actually read the report? It is available for download on the NCAA site. An interesting read. Some of the tidbits I found in Football Bowl subdivision breakout:

Men's Lax is fourth overall in revenue production @ $372,000 (correct me if I'm wrong but doesn't the NCAA gooble up most revenue from final 4 weekend?) behind men's football, men's basketball and men's ice hockey. Can anyone say, "too many feb. and early march games" ;-)

Contrary to gist of the article and at risk of riling title niner's out there, if you list both men's AND women's sports (which are broken out in the report) Men's lax goes from 3rd most expense to like 13th behind the following:
Women's: basketball,crew, field hockey, gymnastics, ice hockey, soccer, softball, track and field, and volleyball.
Men's : baseball, track and field

Some numbers are staggering... women's basketball loses roughly twice what men's lacrosse loses. Biggest problem on the women's side is even the bigger sports cannot generate revenue.

Oh, and when you look at the break-outs of football championship schools (non-bowl) as opposed to Bowl schools ALL sports lose money and men's football leads the way followed by men's and women's basketball, and men's and women's ice hockey.
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Re: WSJ Article on Lax and Net Revenue per School

New postby sore+old on Mon Oct 26, 2009 1:59 pm

1. Reduce or eliminate D1 lax scholarships. The 12 permitted schollies don't really make that much impact on college affordability once they are split up among 45 players, but they do raise team costs. Just get by with merit and financial aid like the Ivy and Patriot Leagues do
.

Some of your other ideas are good. On this one you speak as a man who doesn't work pay check to pay check. As an example, a kid goes to a SUNY D-I school, is a pretty good player and gets tuition paid for or close. Each team has a number of guys in this situation. If my kid lives at home and commutes I'm paying for transportation and books. Even if they live there it might cost an additional 12K. I'm sure you can see how that opens the door for many guys who come from families barely getting by. Even at the private colleges, a guy gets 5K per year say. That's 20K over 4 years. That's a lot of money to most people . Also, these student athletes are unable to work which means college in the end will cost them that much more. Kids get monetary considerations for all sorts of talent like band. theatre, singing, etc... Heck, even the organist who plays at Sunday Service on campus gets a 1/4 scholarship at my daughter's school.
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Re: WSJ Article on Lax and Net Revenue per School

New postby ggait on Mon Oct 26, 2009 2:11 pm

Interesting report. Here is the deal on college sports. Except for D1 football and D1 mens hoops at the BCS schools, EVERY sport loses money. All of them. Mens sports lose money. All womens sports lose money. D1 football loses money outside of D1 BCS. D1 mens basketball loses money outside of the BCS schools.

Mens D1 lax and womens D1 lax teams both lose money, although a mens team loses a little more than a womens team on average. Despite that, though, D1 womens lax is growing but D1 mens lacrosse is not. Many BCS schools have D1 womens lax teams (Florida, Oregon, Cal, Stanford, Northwestern, BC, Va Tech, etc.) but not mens D1. Why?

Because the BCS schools use womens lax (and other womens sports like crew, equestrian) to title IX offset the high number of male football roster spots.

In this environment, therefore, about the last thing a college AD wants to do is add a non-revenue male sport with a high number of roster spots (i.e. mens lax). Especially if that college already has another existing sport like that (i.e. baseball). That AD is more likely to want to cut existing sports (both mens and womens), but T IX makes it more attractive to cut mens teams.
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Re: WSJ Article on Lax and Net Revenue per School

New postby ggait on Mon Oct 26, 2009 2:49 pm

[Even at the private colleges, a guy gets 5K per year say. That's 20K over 4 years. That's a lot of money to most people.[/quote]

D+O -- $20k is a lot of money to me too. But not so much when four years of private college costs over $200k. And you wouldn't even get that $20k in the Ivy League, or in the Patriot League, or at the many D1 schools that don't provide the full number of permitted schollies. And then consider that a decent portion of the lax schollie dollars go to kids who graduate from high schools like Georgetown Prep, Delbarton, Gilman or Chaminade -- so those dollars are probably not critical to whether those kids can/cannot afford college.

I'm just saying that the portion of college that gets funded by lax schollies is quite small (although not zero) as compared to the portion financed by in-state tuition breaks, merit aid and need based aid. Personally, I'm pushing my high schooler to play club lax at our home state university, which will save us way more than any lax schollie would.
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Re: WSJ Article on Lax and Net Revenue per School

New postby thatsmell on Mon Oct 26, 2009 3:00 pm

We had this argument at a school that I coached at.
Thankfully, those in charge had the keen sense to be aware that non-revenue generating sports (and activities..like theatre/music/clubs etc...) provide a ton of non-revenue based benefit to the school and it's students:

-Physical health
-Opportunities for diversity in the student body
-Increasing applications
-A broader range of experiences and learning opportunities for students
-Another common experience for alumni (donors) to harken back on
-Free advertising-- How much would the college be spending to advertise for the space/time dedicated to a box-score, news report, student-athlete profile, evening news segment etc etc?
-Goodwill- many college teams have partnerships/fundraisers etc with local non-profits/charities/rec. leagues etc.

:D

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Re: WSJ Article on Lax and Net Revenue per School

New postby jhuck-80 on Mon Oct 26, 2009 3:54 pm

We've got to stop talking about programs that "lose" money. They cost money, just like everything else at school, and that money is spent for the sort of reasons listed above.

It's the big time football and basketball programs that are the anomalies, not everything else that is out there.
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Re: WSJ Article on Lax and Net Revenue per School

New postby cnylax on Mon Oct 26, 2009 3:57 pm

sore+old wrote:
1. Reduce or eliminate D1 lax scholarships. The 12 permitted schollies don't really make that much impact on college affordability once they are split up among 45 players, but they do raise team costs. Just get by with merit and financial aid like the Ivy and Patriot Leagues do
.

Some of your other ideas are good. On this one you speak as a man who doesn't work pay check to pay check. As an example, a kid goes to a SUNY D-I school, is a pretty good player and gets tuition paid for or close. Each team has a number of guys in this situation. If my kid lives at home and commutes I'm paying for transportation and books. Even if they live there it might cost an additional 12K. I'm sure you can see how that opens the door for many guys who come from families barely getting by. Even at the private colleges, a guy gets 5K per year say. That's 20K over 4 years. That's a lot of money to most people .


If families are "barely getting by" financial aid will be the way to go, not athletic aid.
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Re: WSJ Article on Lax and Net Revenue per School

New postby HowieT3 on Mon Oct 26, 2009 10:38 pm

I wonder if any of the former D-3 schools like Albany and most of the MAAC will have to give serious consideration to going back if the incoming revenue stream keeps geting smaller in comparison to outlays. Most of them only moved up to get a piece of the D-1 b-ball TV contract money. They play 1-AA football (or whatever it's calling itself this week) but it will be a long time, if ever, before an Albany or Stony Brook or Robert Morris can play football consistently at the level of Delaware, Richmond, or the other Colonials that are seriously pursuing the championship. They have a "D-1" football, soccer, MLax, WLax, etc., team only because the rules say they have to if they want the b-ball money. They're all going to have to make a serious philosophical change before they're competitive in any D-1 sport and stop being 1st round cannon fodder. They may catch lightning in a bottle a la Mason, but it has to get tiring to the kids to get beat up all the time.
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Re: WSJ Article on Lax and Net Revenue per School

New postby jhu6569 on Tue Oct 27, 2009 12:10 am

Nice post - thatsmell! We here on Laxpower, and certainly other sports related Internet venues, too often lose sight of the real collegiate grail. Educate the entire person and student body. Athletics is certainly often a MAJOR impact player in the total scenario - and many times deservedly so, I think - BUT sports per se should never be the only important issue of concern.
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Re: WSJ Article on Lax and Net Revenue per School

New postby gobigred on Tue Oct 27, 2009 6:58 am

Mr T wrote:Wall Street Journal sports page has an article today about the median cost of specific college sports. Only football ($1,950,000) and basketball ($518,000) make money.

According to this study, football doesn't make money for many: http://www.washingtonpost.com/wp-dyn/co ... newsletter

"According to data available to the [Knight Commission on Intercollegiate Athletics study], 25 of the highest-tier football schools produced average revenues of $3.9 million in 2008; the other 94 ran deficits averaging $9.9 million."

I'm guessing the author meant to write "surplus" and not "revenues," otherwise the numbers cited seem inconsistent,"
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Re: WSJ Article on Lax and Net Revenue per School

New postby ggait on Tue Oct 27, 2009 11:53 am

I agree with J-Huck's comment above that the way to look at it is that college sports COST money to operate. Colleges spend dollars to operate sports (as well as other kinds of student activities), as Thatsmell points out, for reasons other than to make money. That even goes for football, which actually costs money to operate at most schools.

According to the report on the NCAA website, in D1 FBS 68 football programs had revenues exceeding costs while 51 had costs exceeding revenues. The median D1 FBS football program had a surplus of only $3.6 million. While football generates the most revenue, it also consumes a lot of revenue. In D1AA FCS, only one school in 115 had a surplus from football.

All these football facts really double/triple whammy mens D1 college lacrosse. Mens lacrosse costs at D1 are high (very very high when you include the Title IX tab) with little off-setting revenue. Fewer or no athletic scholarships, smaller rosters and a re-jiggered Title IX would help reduce those costs, which would make it easier for a college AD to consider adding a mens lax team for the qualitative reasons Thatsmell points out.
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Re: WSJ Article on Lax and Net Revenue per School

New postby Regularjesus on Tue Oct 27, 2009 9:23 pm

ggait wrote:3. Except money-making sports from the Title IX calculations. Mens hoops and football generate the cash that pays for all the non-revenue sports. Just require the schools spend that net revenue equally on mens and womens non-revenue sports.
ggait - Title IX is not a law that is specific to sports. It is a law that covers all educational opportunities for any institution that accepts Federal funds - including student financial aid.

Therefore, if there is an exemption for football or men's basketball, to allow extra scholarships for men, an exemption could be created for just about any other educational opportunity. For example, if the Medical School generates revenue (through patient dollars, research grants, etc) it could only give medical tuition scholarships to men. Or another form of discrimination - only to Vietnamese immigrant males. Or only to Sephardic women over 50.

You see where I'm going with this?

ok, let's say there is an exemption for football and men's basketball - what happens in the years when football and/or men's basketball do not make enough revenue to cover their costs? Does the exemption get discarded? Most football and men's basketball programs do NOT make money, they rely on tuition money to cover their costs. So should they get an exemption? how do the accounting rules work? There is a big difference between net income and net revenue. I would expect the WSJ reporter to understand the difference, but maybe not on this forum, or in an athletic department.

We all know programs that 'fudge' their costs, or 'blur' them. If a practice field is shared by men's lacrosse and women's field hockey, how are the costs and depreciation accounted for? what about parking revenues when the school is hosting both an outdoor lacrosse and an indoor men's basketball game on the same day / time? How do you account for alumni donations made to the general athletic department?
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