College sports come at a cost to Kentucky taxpayers

Kentucky's public universities reallocate almost $50 Million to subsidize athletics

lblackford@herald-leader.comApril 1, 2012 

As the frenzy over the NCAA Final Four proves, many Kentuckians love college athletics. What they might not know is that taxpayers are picking up a large part of the tab.

The state's eight public universities subsidize their sports programs with a total of almost $50 million a year from their schools' general fund budgets, which largely rely on state tax money and students' tuition and fees.

The largest subsidies, based on a percentage of the athletics budgets, go to the programs at regional universities; the two NCAA Final Four teams, the University of Kentucky and the University of Louisville, have the lowest subsidy percentages.

Spending on athletics has remained strong despite nearly a decade of cutbacks in state funding, which have pushed much more of the financial burden of attending college onto students. Since 2006, state lawmakers have cut spending on public higher education by $105 million, and an additional decrease of $62 million is expected over the next two years.

With that financial picture, one state legislator thinks Kentucky universities should be looking in an obvious place to cut spending.

"The various universities and their boards need to contemplate that which is the most important challenge ahead of them, and they have to put athletics in their proper perspective," said Rep. Arnold Simpson, D-Covington, who chairs the House budget subcommittee on higher education.

Simpson presided over a series of meetings with the presidents of all eight universities during this legislative session, and said he never heard one of them talk about trimming the millions of dollars that keep sports afloat.

"I understand the argument that athletics prominence justifies expenditure of public funds, maybe, but I have not seen any evidence," Simpson said. "I'm mindful of the fact they have money to allocate to athletics, compared to some of the things they're not funding. I think our obligation is to develop young minds first and foremost."

Only UK and U of L come close to having self-sustaining athletics departments.

According to 2010 data from the Council on Postsecondary Education, UK collects $700,000 in student fees annually for athletics, which allows students to attend most college sporting events and to enter a lottery for men's basketball tickets. But UK's $82 million athletics budget is otherwise supported by revenue from football and men's basketball.

UK athletics also gives an annual donation to UK. Last year, it was about $1.7 million for academic scholarships. Some of the athletics department's other budget items included $9.8 million for athletic scholarships; $7.35 million for utilities, maintenance, parking and security for athletics facilities; and $1.8 million for administrative overhead, such as accounting services.

UK spokesman Jay Blanton said the athletics department would have to undergo a budgetary review similar to that of all units at UK as the school braces for a $20 million cut from the state.

"Athletics plays an important role in student recruitment, something prospective students repeatedly tell us during the enrollment process," Blanton said.

In 2010, U of L transferred $3.2 million from its general fund budget to its $52 million athletics budget, about 6 percent of the athletics budget. In contrast, at Eastern Kentucky University, the general fund and tuition provided 90 percent of the school's $10 million athletics budget.

Nationally, most universities subsidize athletics because their teams don't make enough money to support a wide range of sports. USA Today, which has written extensively on the topic, estimated that at least half of Division I schools used general fund money and student fees to make up a quarter of their athletics budgets. Athletics budgets are growing nationwide, partly to accommodate higher salaries for coaches.

The NCAA has compiled a list of 22 Division I schools that are self-sustaining. UK is not on the list, which includes some of its football and basketball rivals, including Indiana, Alabama and Georgia.

"If it's worth having, it's worth paying for," said Daniel Fulks, a Transylvania University professor who works on finance issues for the NCAA.

For example, Western Kentucky University has decided that athletics can raise the school's national profile. WKU's general fund provided $14 million of its $19 million athletics budget in 2010, as sports have taken a larger role in Western's overall growth. The football team joined Division I in 2009.

Spokesman Bob Skipper said the enhanced athletics program has brought new attention to Western.

"WKU's appearance in the 2012 NCAA men's basketball tournament and WKU's football success last season has brought national exposure to the university that cannot be purchased," he said. "The exposure has resulted in increased interest by prospective students, instilled a renewed sense of pride in the university, and has elevated general awareness of WKU at the state and national level."

In addition, Skipper said, athletics has seen its share of cuts, including the last round, in which the men's soccer program was dissolved.

EKU uses its general fund to pay for all but $1 million of its $10 million athletics budget. Provost Janna Vice said everything was under review during the current budget process, including athletics.

"We do a very good job at keeping the balance between student and athlete," she said.

Student athletes at Eastern graduate at a rate that's 28 percent higher than the general population, and the athletic programs help the school's diversity as well, Vice said.

As for pressure to do more, she thinks most EKU supporters "understand the appropriate role for athletics at EKU. We are not an SEC school, we are a mid-major school in athletics."

EKU's athletics' costs are about 5 percent of its total budget. At Northern Kentucky University, traditionally more of a commuter school, athletics make up 2.6 percent of the total budget. At Western, it's about 5.4 percent.

Simpson, the lawmaker, said he plans to keep a close eye on athletics revenue, which might put additional pressure on schools to raise more money privately rather than using state funds or tuition.

"For most of these schools, there is no chance to make money," said Fulks, the Transy professor. "So you have to ask, what are the intrinsic values and how much do we value them?"

Levels of Support

Kentucky's eight public universities support their athletics programs with some combination of general fund dollars, tuition and student activity fees.
athletics budget
Amount supported
with student activity
fees, general fund and
tuition revenue
University of Kentucky$72,648,500 $700,000 1
University of Louisville$52,400,000 $3,274,867 6
Western Kentucky University$18,950,938 $13,945,938 74
Murray State University$8,915,614 $6,655,540 75
Northern Kentucky University$5,319,100 $4,153,600 78
Morehead State University$$5,755,794 $5,045,653 88
Eastern Kentucky University$10,176,001 $9,111,251 90
Kentucky State University$3,048,752 $3,048,752 100
Source: Council on Postsecondary Education

Linda Blackford: (859) 231-1359. Twitter: @lbblackford.

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