Covid-19 Impact on NCAA Finances

The NCAA has been highly publicized for their extremely high revenue, large scale TV deals, and sponsorship deals during the time in which the student athletes were unable to profit individually. As the scale continues to grow on the financial side of collegiate athletics, there has been one moment in recent history that has drastically impacted the steady incline in revenue in the past 15 years. The COVID-19 pandemic completely altered the entire sports world for almost two entire athletic seasons. As some programs are still feeling the financial impacts of COVID, this report will be looking deeper into the entire expense reports of the NCAA and looking at the trends among where money was coming from, and where it was going during the years leading up to 2020, and the recent years following.

The first step was to import customized data sets featuring all expenses from Power 5 conferences, Group of 5 Conferences, and the overall FBS from Knight-Newhouse.

library(readxl)
library(tidyverse)
options(scipen = 100000)
library(ggthemes)
library(ggplot2)
library(readxl)
Academic_Debt <- read_excel("~/Desktop/Academic:Debt.xls")
library(readxl)
All_Spending <- read_excel("~/Desktop/All Spending.xls")

Total Revenue and Expenses

To begin diving into the finances of college football, it is important to note the trends of the financial situation as a whole. To do this, the median expenses and the median revenue for college football programs were charted, beginning with the year 2005 until current day.

As expected, near 2020, there was a drastic drop in revenue for these schools with FBS football teams. There was a more significant drop in revenue for the larger conference schools as noted in the red line on the chart.

Revenue Streams

Expanding on the loss of revenue, it was important to look into exactly which areas of revenue were lost. This led to the study of the sponsorship revenue, the media rights, and donor contributions as the main revenue streams for FBS football teams.

As seen on the charts, with the uncertainty around the pandemic, corporate sponsors and donors had much less contribution towards the revenue. This was leaving programs with a much smaller budget going forward than they are used to working with.

Game Day Expenses

Diving deeper in which areas in particular were most impacted by this change in revenue, areas such as game day experience expenses, along with student athlete medical costs were graphed with the assumption that COVID-19 would impact these areas the most direct manner.

As expected, each one of these areas experienced significant changes in 2020. The median ticket sales for a power 5 team was over $20,000,000 and dropped below $4,000,000 instantly. Additionally, the athlete medical costs also saw a significant increase due to players going in and out of COVID-19 protocols. However, due to many programs switching towards a shorter and conference only schedule in the year following the pandemic, the travel costs saw a large dip, saving universities money in this area.

Salaries and Compensation

The next set of data to look at was for the team personnel. The goal was to see the trends of how individual people were impacted in the change in revenue over time. To look at this, coaches compensation, salaries, recruiting expenses, and athletic student aid were charted to see if they match up with the overall trends we have seen so far.

All of these areas saw a decrease in value with the pandemic, but the recruiting costs dropped at a much higher rate than the others. As shown in the coaches compensation chart, coaches have been receiving much higher bonuses year by year since 2005. The drop in compensation in 2020 was more reflective of fewer games played than universities trying to save back some money. As the overall salaries saw a small dip, the money saved for athletic scholarships saw a similar drop as well.

University Impact

The last step of this study is to chart the larger impacts of athletic support on the universities as a whole. To do this, government support, total university-wide spending, athletic department debt, and facility costs were studied.

These trends have shown that the small schools had been receiving more government support than the power 5, however both saw this government support taper off at the start of the pandemic. Another area of note in this study, university spending had been on a steady incline, but has not yet reported enough data following the pandemic to show an accurate trend of how COVID-19 impacted the wider university budgets. Athletic departments are often known for functioning in some form of debt. There was a rise in athletic department debt until very recently when school started to turn that around. With larger schools pushing for play through the pandemic, they saw an increase in debt post 2020, while the smaller schools had much less teams competing and saw their debt decrease. Lastly, the facility maintenance, rent, leases, and other dues saw a change in direction as the facilities were used in a much different capacity than pre-pandemic.

Conclusion and Findings

Overall, the pandemic was one of the most influential moments in NCAA history. After years of steady growth, 2022 drastically changed the financial situations for many schools around the country. College athletics was no different. A billion dollar industry that relies heavily on large groups of people coming together in unity for their team, was hit with an impossible challenge of meeting COVID-19 protocols while trying to still sell out stadiums. The data has shown that increased medical costs, decreased ticket sales, sponsorship deals, donor contributions overpowered the money saved on recruiting costs and facility management to leave athletic departments in a larger debt than they were prior to the pandemic.