Congratulations are in order for Indianapolis Star reporter Mark Alesia, who was honored this week by the Society of Professional Journalists with its 2006-07 Investigative Reporting Award for the empirical study (Part I, Part II) he conducted in April 2006 on the extent to which schools and the NCAA profit from star players, how university general funds and students contribute to athletic departments, and the interplay of those contributions with the NCAA's tax exempt status as a non-profit entity. From the study, he built the NCAA Financial Reports Database, which is the most detailed, publicly available database of college athletic department financial information ever assembled.Among Alesia's findings is that fewer than 1% of NCAA athletes generate more than 90% of the NCAA's money, which confirms the incredible economic value of basketball and football stars to colleges and universities. For instance, he found that 43 public schools in the 2005 March Madness tournament paid out a combined $12 million in expenses relating to the basketball players (including scholarships and tuition and other expenses), which proved to be a very good investment, as those same players generated $267 million in revenue for those schools. Where did the $255 million difference go? "The rest was used to pay for coaches, administrators and money-losing sports -- basically, all others except football."
Alesia also found that athletic departments at taxpayer-funded universities nationwide receive more than $1 billion in student fees and general school funds and services, and that without such outside funding, fewer than 10% of athletic departments would be able to support themselves with ticket sales, television contracts and other revenue-generating sports sourc
es. In fact, most would lose millions of dollars.The award committee at the Society of Professional Journalists praised other noteworthy aspects of Alesia's study:
What he uncovered is this: Taxpayers indirectly subsidize athletic departments because college sports are exempt from federal taxes, based on their tie to education. The exemption particularly benefits big schools, which receive up to 40 percent of their athletic revenue from donations, most of which are tax deductible. Critics believe college sports have largely become a business of mass entertainment and should no longer receive an education-based tax exemption, especially in an era of rising tuition and stagnant state support for higher education.Congrats again to Mark, whose work will undoubtedly assist those of us at the newly-formed College Sport Research Institute.Judges praised Alesia for challenging “how college teams are funded. In so doing, it effectively attacks institutional support and student fees subsidizing college sports. Database work incomparable … brave work with compelling results.”
James Duderstadt, former president of the University of Michigan and now a member of the U.S. Secretary of Education’s Commission on the Future of Higher Education, said this coverage is “the most thorough analysis of the financing of intercollegiate athletics I’ve seen since we asked the Big Ten chief financial officers to do an independent audit of our athletics departments during the 1990s. … You folks have done a great service to higher education!”
