Delaware athletics relies on 82 percent of budget being subsidized by university

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Courtesy of Delaware Athletics
The Delaware football program alone costs over seven million dollars to run every season. The university does not publicly reveal the amount of revenue generated by the team.

BY , INVESTIGATIVE EDITOR, , INVESTIGATIVE REPORTER AND, INVESTIGATIVE REPORTER

If you attended a Blue Hen football game last fall, cheered for the basketball teams this winter or rooted for any of the other 16 intercollegiate teams that compete under the University of Delaware’s banner, you have seen student tuition dollars being used in large amounts outside of the classroom.

The Delaware athletics department does not produce enough revenue to cover its own expenses. Of its $34 million budget, 82 percent is funded by subsidies from the overall university budget, which is derived from several sources, including tuition, state assistance and endowments. Although the university does not publicly disclose the details of the budget, tuition and fees accounted for 47 percent of all revenues in its most recent filing of the Form 990 with the Internal Revenue Service.

Even though the university is providing subsidies for the athletics department, students in engineering, business and nursing majors will be impacted by the recent tuition increase of thousands of dollars over the next several years.

The Athletic Budget

Delaware’s athletic budget during the 2015-16 academic year topped $34 million, according to data collected by USA Today. Of that, $28 million was reported as “school funds,” which USA Today defined as both direct and indirect financial support from the university. The USA Today data shows that internal athletic revenue streams such as ticket sales, contributions and licensing rights make up the remainder of the budget.

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USA TODAY
82 percent of the athletic department “revenues” are sourced to school funds that come from the overall university budget.

Department of Education data provides a closer look at the details of the athletic budget. The data is also available online with the Office of Equity in Athletics Data Analysis (EADA).

Budget 2
Ken Chang/THE REVIEW

The EADA data shows that the most expensive teams to operate are football and basketball. More than a third of the athletic budget is dedicated to running the football, men’s basketball and women’s basketball programs. In 2016-17, these three teams consumed $12.4 million, which includes athletics-related financial aid, recruiting expenses, operating expenses, salaries and “any other expenses attributable to intercollegiate athletic activities,” according to the EADA User Guide. The cost of operating these three programs has increased from $10.5 million four years ago.

During the 2015-16 academic year, the amount that was spent on just those three teams was $600,000 less than the cost of funding the 16 other sports teams at Delaware during that period. This completely outstrips the $6.3 million in non-subsidized revenues reported by USA Today from the same year.

The EADA data is self-reported by the university’s athletic department and is not audited. Scott Eatough, the associate athletics director for business operations who reported the EADA data, could not be reached for comment by phone or email.

This annual investment of millions of dollars has not translated into competitive success for these programs. The football team has not played in the National Collegiate Athletic Association’s (NCAA) Football Championship tournament since 2010-11. The women’s basketball team has not competed in the NCAA tournament since 2012-13, and men’s basketball last secured a berth in March Madness in 2014-15.

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Huffington Post and Chronicle of Higher Education
Universities that belong to the Big Ten athletic conference earned $980 million in revenues in 2013-14 without including institutional support.

Universities from the power five conferences — Big Ten, Big 12, Southeastern (SEC), Pacific-12 and the Atlantic Coast (ACC) — face far fewer financial difficulties in raising athletic revenues. Many athletic programs in these conferences such as the University of Texas, Penn State University and Louisiana State University are not subsidized by university funds at all. Instead, they bring in tens of millions of dollars from ticket sales, donor contributions and lucrative licensing contracts that result in their games being broadcast on major networks.

The seating capacity of a football stadium plays a large role in determining how many tickets are sold in a season. Penn State’s Beaver Stadium can hold 106,000 people compared to Delaware Stadium which can seat 22,000. Delaware can sell as many tickets in its five home games each season as Penn State can sell in a single home game.

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Jacob Orledge/THE REVIEW

Penn State reported over $35 million in ticket sales in 2015-16 for its entire athletic department. This revenue was earned from tickets sold at all sporting events, not just football. That is more than Delaware’s entire athletic budget for that year, which included $1.2 million in ticket sales across all sports.

The Colonial Athletic Association (CAA), the athletic conference that Delaware competes in, reported revenues from its member universities for a single year to be $122 million according to research done by the Huffington Post and the Chronicle of Higher Education. Institutional support from the university budgets accounted for 74 percent of that revenue. The Big Ten athletic conference reported a substantially higher amount in revenues with only 2 percent of that being subsides.

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Huffington Post and Chronicle of Higher Education
Universities that belong to the CAA earned $32 million in revenues, excluding institutional support.

Within the CAA, only James Madison University outspends Delaware, paying out $47 million in athletic expenses. Subsidies from James Madison University’s budget made up 80 percent of their athletic revenues, mostly through student fees specifically earmarked for athletics instead of drawing from general tuition revenues.

James Madison and Delaware spend the most on athletics in the country out of all the universities whose football teams compete in the Football Championship Subdivision (FCS), formerly known as Division 1-AA.

The Virginia Legislature cracked down on the use of student fees to pay for athletics at state universities in 2015, choosing to limit the percent of the athletic budget that could be funded in that method. Then Gov. Terry McAuliffe signed a bill in 2015 that now limits universities competing at the FCS level, such as James Madison and Norfolk State University, to paying 70 percent of their athletic budgets with student fees.

Delegate Kirk Cox, the Virginia legislator who sponsored the bill, believes that the athletic subsidies are a big driver of tuition increases at public universities in the state. At the time of its passing, Cox told the Virginian-Pilot that the bill was already having its desired effect.

“Colleges and universities sat up and took notice,” Cox told the Virginian-Pilot at the time. “They’re working on generating more revenue. The awareness the bill generated to the cost curve of attending college was important.”

Rather than any specific student fee earmarked for athletics, Delaware subsidizes the athletic department directly from the university budget.

Some members of the university community are not happy with the amount of university funds that are spent on athletics. Stuart Kaufman, a professor at the university, feels that it is time to reevaluate how we balance money spent on athletics and academics.

“The data nationwide is that football programs cost a lot more money than they bring in,” Kaufman said. “It is something to reconsider whether it is still worth it in this day and age to be plowing however much money we put into the football program given other needs.”

Kaufman would like to consider whether money could be better spent in order to benefit students academically.

“If we want to do things like increasing graduation rates I think we need to put more money into advising, more money into tutoring,” Kaufman said.

The university’s lack of financial expenditure and income transparency makes it difficult for observers outside the administration to come to an informed opinion on such decisions.

“There should be a lot more clarity about how this money is being spent,” Kaufman said.

Tuition is on the rise — but not for everyone

In addition to the university subsidizing a majority of the athletic budget, students in specific colleges were informed in February that their tuition will be raised by thousands of dollars.

Engineering, business and nursing students are facing a tuition increase of $1,000 beginning in the 2018-19 academic year. By 2020-21 it is expected engineering tuition will have risen $4,000, business tuition will have gone up $2,500 and nursing students will face an increase of $1,500 over current costs.

The tuition increases will affect current students as well as later classes of Blue Hens. Current students will receive a $500 credit on their bill to help offset the increased costs.

The Review reported on this topic at the time of the announcement.

The university has said the funds generated by the tuition increases will go toward hiring 500 more faculty as well as to continue to provide the state-of-the-art facilities that these academic disciplines require.

Delaware First and Athletics

The university announced in November 2017 that Delaware Stadium will be undergoing renovations and a new athletic facility would be constructed in the near future as part of the Delaware First fundraising campaign.

Athletic Director Chrissi Rawak said at the time of the announcement that she expects the projects will enable athletics to help showcase the rest of the university and give the program an edge in recruiting.

These new construction efforts will cost approximately $60 million. Delaware First aims to raise $35 million of this sum through fundraising efforts, and the university will contribute $25 million. The university has not publicly said where their $25 million to match donations will come from.

This $25 million will be used to match donations of $50,000 or more, dollar for dollar.

“We think they will hit that at the end of April,” Robin Wray, the Campaign Director for Delaware First, said in reference to the $60 million mark.

As of March 14, the campaign had raised $37 million.

The initiative to renovate the football stadium comes as the university is facing a $500 million backlog in deferred maintenance on existing campus buildings. Deferred maintenance refers to the buildings on campus that are in need of repairs, but are being pushed back to save money and use funding toward other things.

Even though the Delaware First campaign has a plan to use a portion of the money raised toward the backlog, they will definitely not raise the entire amount.

“We don’t expect donors to be able to pick all of that up,” Wray said. “Especially when it is a very unsexy concept.”

Athletics is the popular way for most universities to express their school spirit. There may be more of a personal connection to donate toward athletics because it shows that they are in support of the public opinion of the university.

Part of the donations toward athletics includes the $10 million donation by Ken and Liz Whitney, which will be used for the construction of the new Whitney Athletic Center. Additionally, prominent Delaware alumni who went on to be NFL quarterbacks such as Joe Flacco and Rich Gannon, have recently donated toward athletics as apart of the Delaware First campaign.

“We buy into the concept that society helps fund our future leaders, not just [the students],” Wray said.

Quinn Ludwicki contributed to this report.

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