How much money does the OSU football program generate?

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How much money does the OSU football program generate?

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In 1961, Ohio State University waxed rival Michigan 50-20 in the season’s final football game and was poised to accept an invitation to the Rose Bowl, where OSU was favored to win and clinch a national number one ranking.

But Ohio State faculty voted 28-25 to decline the invitation, arguing that it would conflict with the school’s educational mission. Police had to be summoned to quell the disturbances that erupted on campus over the faculty vote.

As the Buckeyes play for another national championship Monday, it is almost inconceivable that anyone today would question the value of Ohio State football.

The Buckeye football team is such a dominant part of the university’s culture — and the state’s collective mindset — that Gov. John Kasich, OSU Class of 1974, will have televisions available tomorrow night so that attendees at his inaugural ball can watch the game.

Season after season, the Buckeyes win on the gridiron. But the school’s financial dominance over its opponents is every bit as impressive.

Everything associated with the football program is big, including the salary for its wildly popular coach Urban Meyer. But the revenues are big too. Fueled by all those sellouts at Ohio Stadium and other income generated by the hugely successful football program, the OSU Athletics Department is one of just seven in the nation that are completely self-sustaining, meaning no student fees or tuition dollars are used to subsidize the sports programs, according to data tracked by USA Today.

This year’s first-ever Division I college football playoff has cast a spotlight on the money made and spent on college football. But it has also illustrated the huge gulf that exists between big-money schools and those that spend more modestly on football.

Ohio State spends more per scholarship football player — $399,536 — than any other program in the country, according to the Knight Commission on Intercollegiate Athletics, a non-profit that tracks spending in college athletics. The number two team? Alabama, the school Ohio State beat in the semifinal round.

“They have huge, huge budgets and they make huge amounts of money, but there aren’t many of them like that,” said Howard Nixon II describing the upper-most echelon of college sports programs including Ohio State.

Big money

Ohio State is very successful in a number of sports, including both men’s and women’s basketball, but football dominates Buckeye Nation, and nowhere is that more clear than on the accounting books.

Of the $139.6 million in annual revenue generated by all the athletic programs combined, nearly half — or $68 million — comes from football. For the 2012-13 season, football ticket sales totaled $46.3 million, conference revenue hit $12.7 million, parking and concession sales totaled $4.1 million and TV and radio contracts generated $1.3 million, according to OSU’s report to the NCAA.

The national championship game is expected to give OSU prime time exposure to tens of millions of spectators across the nation. Just how much of a financial boost it will provide, though, is not entirely clear.

“It’s not going to generate any additional revenue,” said Pete Hagan, OSU associate athletic director and chief financial officer. “Does it help with (football) recruiting? Absolutely. Does it help recruiting for the university? Absolutely. Does it help for university (fundraising)? Absolutely.”

It also will provide no small boost for the retailers that feast on the strength of the Buckeye brand. As for OSU, Hagan said the school might see an uptick in applicants and trademark and licensing revenues as a result of the national championship game.

The debate that occurred in 1961 — was the football program detracting from academics? — has not entirely gone away. Cardale Jones was just a third-string quarterback more than a year ago when he sent a tweet that went viral.

“Why should we have to go to class if we came here to play FOOTBALL, we ain’t come to play SCHOOL, classes are POINTLESS,” the tweet said.

After Jones surprised the sports world this season with back-to-back wins that propelled the Buckeyes into Monday’s big game, Jones’ tweet made the rounds again.

The athlete has said he’s matured since then, but Nixon said there was a certain truth in what Jones wrote.

“Playing sports at any level is fun, challenging and it has its benefits,” Nixon said. “But big-time sports is not about academics.”

Nixon, author of “The Athletic Trap: How College Sports Corrupted the Academy,” said a championship football team may give a brief bump to student applications. But he cautioned against making assumptions that the new applicants will elevate the institution’s academic standing.

“We do see some short-term effects, apparently. But you have to ask: Who is applying because a team has won football games?” he said. “Are they the best students? I’m not sure the average GPA of students goes up. Are we getting better students or are we just getting more bodies?”

Changing spending model

OSU athletics, and particularly football, gets the lion’s share of the media attention devoted to the university, even though it accounts for just 3 percent of the Ohio State’s $5 billion a year budget.

But the spending model is changing, with costs ramping up dramatically for football, the Knight data shows.

Academic spending per full-time student at OSU was $18,042 in 2012, up 18.9 percent over the $15,169 spent in 2005, according to the Knight Commission. Meanwhile, OSU football spending per scholarship player increased 33.6 percent during the same time period, according to the commission data.

“Looking at the trends: academic spending at institutions in the FBS (Football Bowl Subdivision) grew just 6 percent per capita (from 2005-2012) after adjusting for inflation while football spending per football player grew 76 percent,” said Amy Perko, executive director of the commission. “And that’s even without considering spending on athletic scholarships. When you look at the 24 programs with the largest athletics budgets, the spending disparity was even wider.

“In particular, if you look at football coaching salaries on a per football player basis, those salaries grew 60 percent” while academic spending per student decreased by 2 percent, Perko said.

The old saying that you have to spend money to make money seems to be hardwired into every check written by the OSU Athletics Department.

The football program annual expenses average $37.3 million, including $11.7 million for Urban Meyer and his nine assistant coaches. Other big categories of expenses: $3.6 million for facilities, $3.2 million in scholarship aid, $3.15 million for game day items such as security, $2.56 million for support staff, $1.44 million for team travel and $564,152 for recruiting, according to OSU’s 2013 report to the NCAA.

Ohio State football coaches and related staff are in line for roughly $1 million in bonus pay for the team’s appearance in the national championship game on Monday. That’s on top of another $1 million in bonus pay for winning the Big 10 division and conference and going to the Sugar Bowl.

Meyer makes $4.1 million in base pay and will earn at least $550,000 in performance bonuses this season. The head coach, who joined OSU in 2012, also received $450,000 in longevity pay in January 2014, according to Meyer’s 36-page employment contract with OSU.

Spending big money on high profile coaches, top-notch facilities and aggressive recruiting seems to pay off. Schools with the highest paid coaches and biggest football budgets frequently are ranked in the top 25 each season, and often are in the hunt for a national championship.

New era

The conference reshuffling over the past five years and the new college football playoff system is expected to bring even bigger bucks to the 65 teams in the five resource-richest conferences: the Big 10, Big 12, Pac 12, SEC and ACC.

In 2004, Bowl Championship Series and media revenues shared by those five conferences totaled $390 million. This year, revenues are expected to hit $1.5 billion, and by 2020 it’s projected to hit $2 billion, Perko said.

“There is no question we are witnessing today an entirely new era of college football that is very different than what we witnessed even just five years ago,” Perko said. “When you look at the ratings success of the college football playoffs semifinals, it is only a precursor to this huge success that everyone believes this new event will be.

“The success could mean a lot of different things for college sports, and if the revenues aren’t managed properly, it could continue to take college sports down a path that is not a good path for preserving all that is good in college sports.”

‘Arms race’

At Ohio State, not a single dime of student fees, tax money or tuition dollars are used to subsidize the school’s 36 varsity sports. But that is by no means typical.

Outside the big name programs in the five so-called BCS conferences, college athletics can be an added burden to students already struggling to pay for their educations. Even most BCS schools have to supplement their athletic programs with student fees and other revenue.

At Miami University in Oxford, the $28.7 million annual athletics budget is propped up by $19.4 million in student fees and school funds, according to USA Today’s college sports spending data.

Raising athletic fees on students is troubling at a time when tuition is increasingly hard to afford, Nixon said.

“The vast majority of athletic programs do not generate a surplus,” he said. “We are all concerned about the affordability of a college education.” Yet students are paying up to $1,000 a year for athletic fees “and that seems inappropriate.”

Nixon describes himself as a sports fan “in proportion” who sat on the Senate’s Intercollegiate Athletics Committee at Towson University in Maryland. But he is concerned that university presidents and boards of trustees are letting athletic boosters and business interests — including the NCAA — dictate an “arms race” to the top of college football.

“All those forces together really shape the direction and push college sports and it’s really almost too much for presidents and boards to deal with,” he said. “Almost insidiously, but steadily and surely, the commercial influence plays out and affects how universities are run and decisions are made.”

The flood of publicity Ohio State has received over its run to the title game shows how much the tables have turned since 1961, when a group of faculty succeeding in cancelling the school’s trip to the Rose Bowl out of concern that football had gotten too big.

“The reality is athletics get you in the news before some great academic success,” Nixon said. “People pay more attention to winning big football games than they do to even the most recent Nobel Prize winner.”

‘Business as usual’

Plenty of Ohioans scoff at the idea of athletic success detracting from academic excellence.

One of them is Ben Givens, who teaches psychology at Ohio State and is a member of the school’s athletic council.

Givens said the national championship game “helps in our overall image and brand and basically getting the university’s name out in the world. It is a very positive thing that these students have worked so hard to develop their skills as a football team and are displaying that for the world to see.”

Football, said Givens, doesn’t overshadow academics, even in a week when perspective can be hard to find.

“The expectation is that everybody is going to be in class,” he said. “I would say the immediate impact is it’s business as usual within the university.”

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