Dave Hendrickson wrote:
>
> One thing may have changed significantly since the 1986 (or so) study
> that claimed only five football programs made money.  The TV packages
> have exploded over the last ten years or so, as evidenced by the multitude
> of games on the tube.  To ignore this enormous increase in revenue and
> assume that the previous study still holds (assuming it once did) doesn't
> make sense.
 
Wrong. Wrong, wrong, wrong, wrong.  Supply has so outstripped demand in
all of sports that, except for the Crown Jewels (which in college
football is about 2-3 bowl games), TV revenues have *dropped* since
1986.  Every conference wants to get its games on the tube and they keep
underbidding each other.  A lot of the games that you see are in fact
produced in house by the conferences, which try to sell the ad time
themselves.  Some of these self-production efforts actually lose money.
 
> Frankly, the revenue/expense numbers from the USA Today site are SO lopsided
> that the only way you could get to anything close to only five or ten
> football teams making a profit would be to invoke the kind of Hollywood
> accounting practices that still show movies like E.T. still in the red.
 
I think that these numbers are so laundered that you can't even use them
as a starting point.  Most schools do not include capital and facilities
costs in these reports.  That may be the single largest expense item
they have.  I don't trust that the revenue numbers aren't equally
doctored, though it isn't as easy to be creative.  Your assessment is
widely off the mark; it's the athletic departments that are engaging in
Fantasyland accounting in order to make their books look good.
 
J. Michael Neal
 
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