USA Today released their annual report listing out the finances for Division 1 athletics departments and it’s more or less the same story for Cincinnati. Before we dive into the Bearcats, I’ll level set you on the report.
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Firstly, this is only public universities so the Notre Dames and Boston Colleges are notably absent from the list of 230. Secondly, this is from the 2013-14 fiscal year so you’ll notice certain conference realignment cash bumps (Louisville to the ACC, Rutgers to the Big Ten) haven’t been accounted for. It also doesn’t consider other new revenue streams like renovated stadiums (Houston).
Finally, Washington State subsidized $10 million of their athletic department’s revenue, still found themselves $12 million in the red, and it’s hilarious.
But to UC, they’re again among the biggest revenue generators (59th) in the Group of 5. In fact the Bearcats are second in both the AAC and Group of 5 in earnings right behind UConn, who have been riding the men’s and women’s basketball money trains for years now. That’s good news for Cincinnati. On top of that the Bearcats are seeing revenues exceeding Utah and Washington State. Also good news.
What will turn your smile into a frown, though, is when you peer to the rightmost column, university subsidies. That’s what’s killing Cincinnati and the Group of 5 in general.
UC is supporting its athletic department to the tune of 46% of “revenue”, almost $27 million. You can thank the Varsity Village project for that but when you consider that it was the catalyst for the Bearcats to make the jump to the Big East and all the excellent things that followed, I’d say it was worth it. Still, it’s been a massive drain on Cincinnati’s athletic department over the last decade and a primary reason why they attempt to limit costs as much as possible. It’s why Mick Cronin has to raise his own funds for new locker rooms.
It exemplifies the Bearcats need to be invited to the Big 12 or ACC. Most Power 5 schools are plenty rich with funds, mainly due to the tens of millions of dollars from television contracts and major bowl games. Therefore most of them have hardly a subsidy to speak of and can spend their money as they please, primarily more revenue generating projects to further pull away from the pack.
Meanwhile most Group of 5 schools, with TV revenues not even a quarter of what Power 5 schools are earning, are subsidizing their athletic departments to the tune of 25% or more and upwards of 80% for Florida International. It’s indicative of an arms race in college athletics that most schools in lower tier conferences can’t afford. With New Nippert expected to pump $17 – $20 million into the coffers, Cincinnati might be the exception to the rule. Still, it remains to be seen if they can keep themselves afloat.
It’s an expensive gamble but one that can pay off in a big way should the Big 12 or ACC come knocking. Again, we’re talking tens of millions of dollars in extra cash for Mike Bohn to work with. But if they don’t, the Bearcats will have sunk nearly $100 million into a football stadium and probably about the same into a basketball arena while their athletic department siphons funds from the university.
That’s a financial model no CFO would endorse.
As usual I’m hopeful that the conference realignment carousel will kick off again with Cincinnati finally getting the call they’ve been waiting on for years. But this USA Today report hints at the dark days ahead should UC be stranded in the Group of 5 long term.