College Athletics, Big Business: High Pressure for Athletic Directors

College athletics fall under the large umbrella of education due to their affiliation with universities and colleges. College athletics are also big business. Thanks in large part to the explosion of college football, the value of their television rights along with the donations that the programs are able to generate benefit the university as a whole. According to the NCAA report released in April, the 39 postseason FBS games distributed $505.9m to participants. This is an increase of almost $200m from the $309.9m generated during the 2013-14 bowl games under the Bowl Championship Series. Not all athletic departments sponsor football. It’s tough to understand the funding the financing that athletic departments report because there is no standard and different accounting standards are applied to their financial reports.

Private universities keep their financials private, but public university must honor open-records requests and open their financial books. USA Today does a great job of compiling these findings in to an interactive table. The most interesting thing that can be gleaned from this table is the total subsidy the athletic departments receive from their respective universities. Out of the 230 public universities that reported their financial records, only 7 schools reported not accepting any subsidies during the 2013-14 fiscal year. Subsidies at schools that are in the highly competitive football offering SEC, Big Ten and Big 12 typically received lower subsidies due to high valued media rights deals. Schools from the Group of Five (Mountain West, MAC, C-USA, AAC and Sun Belt) had average subsidies of between $15-25m per school.

The top of the athletic departments on college campuses are typically the athletic director. Athletic directors may be “in charge” but they are not usually the highest paid figures on campus, typically trailing high profile college basketball and college football coaches. The average salary for a FBS D1 athletic director in 2013 was $515,000 per year, a 14 percent increase from 2011. These high profile, often underpaid administrators manage the multi-million dollar media rights deals, conference affiliations, head coaches, budgets, capital expenditures fundraising and athletic department employees. Often held accountable for the on-field progress of individual programs, the position is difficult to compare to anything. To get a better idea of the roles of the modern day athletic director, check out Jason Belzer’s piece for Forbes.com

Recently, Street & Smith’s SportsBusinessJournal conducted a study looking at Division I athletic directors. I’d like to highlight a few of my key takeaways from this study, that I found intriguing considering all the facts presented in this post. Only 10 Division I Ads have been on the job for at least 22 years. They’ve served at Wagner College, Utah, Saint Joseph’s (Pa.), Lehigh, UNC-Charlotte, Bethune-Cookman, Florida, Wake Forest, Purdue and Siena College. Four of the ten are currently in the Power Five Conferences. At the time of the student 17 schools including Syracuse and Michigan were operating with interim athletic directors, an alarming high number considering the study looked at all 351 Division I Athletic Departments.

Athletic Directors had a number of common experiences in their past, including similar schools or past work experiences. I thought that it was interesting that the most common former employers for athletic directors were collegiate conference offices, government or municipalities and NFL teams which speak to the fact that college athletics are big business. The tenure of these top dogs at major universities also seems to be impacted by the conference that the school belongs too. The Power Five schools all have average AD tenures between 6.8 and 7.2 years long. Since the study was conducted, two athletic directors in the BIG EAST will have their tenure ended. While conferences that do not sponsor football including the MAAC, Big East, West Coast Conference, Atlantic 10 all have tenures over 8 years in length.

At some point in the future, I will do another post discussing the scarcity of female and minority administrators in collegiate athletics, but at the DI level this is even a larger problem. There are 26 out of 334 are females, while 39 are a minority male. Only three of the 65 athletic directors in the Power Five conferences are female.

The final takeaway from their study was the overwhelming amount of DI college athletic directors that have experience as a former student-athlete or coach. 201 of current athletic directors were student-athletes prior to their appointment, while 122 served as coaches. 258 ADs have at least one master’s degree while 13 have at least two master’s degrees. 48 of these degrees were in education while 38 were in business administration, the majority by far. 48 ADs have at least one PhD, 27 of which were focused on education.

While college athletics are definitely big business dealing with potentially billions of dollars, it definitely comes full circle back to the importance of education. Having a deep understanding of how the education industry works, and being able to juggle the multitude of responsibilities associated with the position. For all those interested in college athletics, or with any aspirations to become a college athletic director or to understand the underlying of college athletics, I suggest subscribing to Street & Smith’s SportsBusinessJournal for access to their report along with their insight and breaking of big stories directly relating to the industry.

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