Department of Education's Equity in Athletics Report

[KipsBayEagle]

http://ope.ed.gov/athletics/#/institution/details

If you search for the data for Marquette, go to the revenues and expenses section, you will notice some interesting numbers.  The first thing you will notice is that the revenues and expenses are both the same number.  Either this is a incredibly rare mathematical coincidence or more likely the program is actually losing money and is adding subsidies to make up for budget deficits. 

The second interesting number is a 6,300,000 dollar expense in the total expenses by team section for teams not allocated by gender/sport.  If you look at the corresponding figure for the revenue those sports generate it is virtually non-existent.

It would seem that whomever created these figures dumped the overall athletics expenses loss into this category.  This would be incredibly idiotic from an accounting and p.r. perspective.  If you type in seton hall, while you see the same matching expenses and revenues feature, you will notice that all the corresponding expenses and revenues match up, thus hiding the true loss of the athletics program.  Marquette tried to out think themselves, and accidentally revealed a 6,000,000 annual loss.

It seems that by looking at these numbers Marquette Athletics is generating roughly 22,000,000 while operating at a cost a little over 28,000,000.  The remaining 6,000,000 is being paid for by subsidies.  I do not know whether that 6,000,000 is paid off in tuition fees, but it is certainly possible.

I don't know if this is the right way to read this data, but I think it may be a plausible one.  It also provides a relatively easy way to find out the private finances of a private institution (although not in great depth), which the government should maybe think about.

[GGGG]

The $6 million is an expense, not a revenue so it can't be a subsidy from students.  My guess is that $6 million is athletic department overhead.  So athletic administration, athletic academic support, and probably some depreciation on athletic facilities like the McGuire Center.  In fact, if I read this correctly, this is actually a very positive report.

You are correct that it is zeroed out on purpose.  Marquette likely has the athletic department cover as much of the $6 million as it can.  The rest is covered by the University and not reflected in this report.

[KipsBayEagle]

The $6 million is an expense, not a revenue so it can't be a subsidy from students.  My guess is that $6 million is athletic department overhead.  So athletic administration, athletic academic support, and probably some depreciation on athletic facilities like the McGuire Center.  In fact, if I read this correctly, this is actually a very positive report.

You are correct that it is zeroed out on purpose.  Marquette likely has the athletic department cover as much of the $6 million as it can.  The rest is covered by the University and not reflected in this report.

Subsidies are counted as revenue.  That is why if you look at a financial report for a state university, where the finances are disclosed, you will see along with revenues, expenses, subsidy, and subsidy % of revenue.  For instance, Uconn has a 72 million dollar revenue, 72 million dollar expense, 28 million dollar subsidy, with a 35 percent subsidy %.  Uconn is actually only generating 44 million in athletic revenue and is subsidizing the revenue with 28 million in subsidies.

Marquette posts a 6 million dollar expense in the non-team sport category to hide the losses in particular athletic programs, but applies the subsidized revenue wherever it wants, because subsidized revenue is just regular revenue that can be placed anywhere.  I think that demonstrates a 6 mill loss, and certainly isn't anything good.

[GGGG]

Subsidies are counted as revenue.  That is why if you look at a financial report for a state university, where the finances are disclosed, you will see along with revenues, expenses, subsidy, and subsidy % of revenue.  For instance, Uconn has a 72 million dollar revenue, 72 million dollar expense, 28 million dollar subsidy, with a 35 percent subsidy %.  Uconn is actually only generating 44 million in athletic revenue and is subsidizing the revenue with 28 million in subsidies.

Marquette posts a 6 million dollar expense in the non-team sport category to hide the losses in particular athletic programs, but applies the subsidized revenue wherever it wants, because subsidized revenue is just regular revenue that can be placed anywhere.  I think that demonstrates a 6 mill loss, and certainly isn't anything good.

I don't think that's the case at all.

Public universities account for their money much differently.  Usually tuition money goes for academic expenses.  Student fees go to support athletics, student activities, etc.  Marquette likely doesn't do this.  Tuition pays the full costs of the University, both academic and non-academic. 

What this shows is that the individual sports operate fairly profitably.  So men's basketball costs $9 million.  But revenue is $15 million.  Women's basketball, and the rest of the other sports, are pretty much break even.  So the $6 million profit that men's basketball makes is applied to the rest of the athletic department to cover its expenditures.  (I wonder how they account for the income of the Fox Sports contract.)

If that doesn't account for all of the other AD expenses, then yes, the students subsidize athletics through tuition.  Just like they subsidize all other non-academic parts of the University.

[KipsBayEagle]

I don't think that's the case at all.

Public universities account for their money much differently.  Usually tuition money goes for academic expenses.  Student fees go to support athletics, student activities, etc.  Marquette likely doesn't do this.  Tuition pays the full costs of the University, both academic and non-academic. 

What this shows is that the individual sports operate fairly profitably.  So men's basketball costs $9 million.  But revenue is $15 million.  Women's basketball, and the rest of the other sports, are pretty much break even.  So the $6 million profit that men's basketball makes is applied to the rest of the athletic department to cover its expenditures.  (I wonder how they account for the income of the Fox Sports contract.)

If that doesn't account for all of the other AD expenses, then yes, the students subsidize athletics through tuition.  Just like they subsidize all other non-academic parts of the University.

The income from fox sports would be revenue.  And that would be double counting the men's basketball proceeds because they are already being counted in revenue.  The 6 million is already being applied. 

It shouldn't come as a shock Marquette is losing money on its' athletics program.  Only 20 public universities do, and of those 20, only 5 are making it big with one really crushing it (a & m made 90 million last year).

The reason why I brought this up is because it seemed to give a Marquette alumnist or student a possible and realistic look at how self sufficient the athletics program is. 

I completely agree with your sentiment that Marquette as a private university has the right to use student tuition dollars to fund a athletic program.  I think what this information does show is that while you can substantially mitigate your losses by not having football (marquette=6,000,000  uconn= 23,000,000) it is still very difficult to actually turn a profit in college sports.

[GGGG]

Seriously why do you think they are losing $6 million?  That's not what it says at all.

The $6 million is an *expense* covered by the sports operating in the black.

[KipsBayEagle]

Seriously why do you think they are losing $6 million?  That's not what it says at all.

The $6 million is an *expense* covered by the sports operating in the black.

When you take money from a subsidy, and use it to pay a expense, it is placed into revenue.  I am saying that instead of marquette making 6 million on basketball, 6 million dollars of subsidized money was added to the revenue total of marquette basketball, to pay for a overall program loss of 6 million dollars.  Unless you think that Marquette's basketball revenue matched the exact total of expenses, which would be a rarity mathematically, Marquette either turned a profit (doubtful) or took a loss.  Under your scenario Marquette Basketball revenue exactly matched expenses.

[GGGG]

When you take money from a subsidy, and use it to pay a expense, it is placed into revenue.  I am saying that instead of marquette making 6 million on basketball, 6 million dollars of subsidized money was added to the revenue total of marquette basketball, to pay for a overall program loss of 6 million dollars.  Unless you think that Marquette's basketball revenue matched the exact total of expenses, which would be a rarity mathematically, Marquette either turned a profit (doubtful) or took a loss.  Under your scenario Marquette Basketball revenue exactly matched expenses.

That's not what it says at all.  It says Men's Basketball has expenses of $9,062,732.  And revenues of $15,335,107.

If you look at all the sports put together, they have expenses of $22,333,022 and revenue of $28,635,010.  So it looks like on an operational basis, Marquette athletics has a profit of just over $6 million.

Now that $6 million has to cover athletic department administration.  So items like that athletic department salary, academic advising, perhaps athletic training and depreciation on athletic facilities.  So that $6 million in "Not Allocated by Gender/Sport" is likely overhead that is covered by the profits generated by the individual sports.

Now yes, it is convenient that the overall expenses and income is equal.  I am sure that's because the actual overhead exceeds actual income, and that is where the subsidy comes in.  But there is no indication that they are losing much if anything.

[Dr. Blackheart]

One needs to consider the Blue & Gold revenue to cover student aid.  The majority of the $6 million I believe is coming from there.  Remembering Pilarz combined B&G under university advancement to grab the control of those funds.

[Juan Anderson's Mixtape]

Don't discount the goal to remain "nonprofitable" as motivation for this "mathematical coincidence."   This shutdown the argument to pay players, which would open up all sorts of issues regarding workers comp, insurance, Title IX, taxes, etc.

It is very easy for a place like Marquette to remain nonprofitable by simply spending all the profits.  Buy staff lunches, employee bonuses, capital expenses, etc.  Track revenues and expenses all year long, spend every penny of profit just before the year ends and voila! you're nonprofitable.

[Benny B]

That's not what it says at all.  It says Men's Basketball has expenses of $9,062,732.  And revenues of $15,335,107.

If you look at all the sports put together, they have expenses of $22,333,022 and revenue of $28,635,010.  So it looks like on an operational basis, Marquette athletics has a profit of just over $6 million.

Now that $6 million has to cover athletic department administration.  So items like that athletic department salary, academic advising, perhaps athletic training and depreciation on athletic facilities.  So that $6 million in "Not Allocated by Gender/Sport" is likely overhead that is covered by the profits generated by the individual sports.

Now yes, it is convenient that the overall expenses and income is equal.  I am sure that's because the actual overhead exceeds actual income, and that is where the subsidy comes in.  But there is no indication that they are losing much if anything.

I believe FASB requires a CPA to sign off on any accounting education that takes place on an online basketball forum.



Chick... JayBee... would either of you care to school the thread?

[forgetful]

That's not what it says at all.  It says Men's Basketball has expenses of $9,062,732.  And revenues of $15,335,107.

If you look at all the sports put together, they have expenses of $22,333,022 and revenue of $28,635,010.  So it looks like on an operational basis, Marquette athletics has a profit of just over $6 million.

Now that $6 million has to cover athletic department administration.  So items like that athletic department salary, academic advising, perhaps athletic training and depreciation on athletic facilities.  So that $6 million in "Not Allocated by Gender/Sport" is likely overhead that is covered by the profits generated by the individual sports.

Now yes, it is convenient that the overall expenses and income is equal.  I am sure that's because the actual overhead exceeds actual income, and that is where the subsidy comes in.  But there is no indication that they are losing much if anything.

You sir get a gold star for interpreting that report correctly.  The $6M "not allocated by Gender/Sport" is athletic department overhead. 

One can not interpret anything regarding profit/loss in these reports as one has no idea how the underlying accounting worked.  All Universities are going to post a $0 balance sheet.  The question is where did all the money come from.

[forgetful]

It shouldn't come as a shock Marquette is losing money on its' athletics program.  Only 20 public universities do, and of those 20, only 5 are making it big with one really crushing it (a & m made 90 million last year).

Careful there in how you interpret these numbers. A&M is not crushing it, those numbers mostly stem from donations needed for field renovations.  After taking out the expenses for the renovations, they only profited $7M last yer.  They also still owe the state/university around $15M for loans to bail them out when they were essentially bankrupt following the shift to the SEC. 

And remember, when they get around $100M in donations for athletics, the University can not ask those donors for money for new buildings/academic improvements. 

Now, they are indeed one of the teams making a profit, but barely.

[Herman Cain]

1. Marquette runs it athletic department efficiently. These reports demonstrate that.
2. Marquette does well overall as a University financially. The annual report demonstrates that.

Marquette needs to market itself better in order to create a larger endowment. I have posted on that extensively in the Super Bar.

[warriorchick]

1. Marquette runs it athletic department efficiently. These reports demonstrate that.
2. Marquette does well overall as a University financially. The annual report demonstrates that.

Marquette needs to market itself better in order to create a larger endowment. I have posted on that extensively in the Super Bar.

That's all well and good,  but how much have you contributed?   

[Herman Cain]

That's all well and good,  but how much have you contributed?   

Probably not as much as the two of You.

[Benny B]

Probably not as much as the two of You.

Why did you capitalize "You"?  Are glow and chick Glow and Chick now God or something?

[warriorchick]

Why did you capitalize "You"?  Are glow and chick Glow and Chick now God or something?

You have finally figured that out.

[Herman Cain]

Why did you capitalize "You"?  Are glow and chick Glow and Chick now God or something?

We need more MU people like the two of them, so I moved them to God like status.