Without Subsidies, FCS Public HBCU Athletics Losing $130 Million Annually


Humility is a virtue all preach, none practice, and yet everybody is content to hear.  — John Selden

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I needed a word to describe this internal report. The word I ended up settling on was hypovolemic. Healthline.com defines the condition as “Hypovolemic shock, also called hemorrhagic shock, is a life-threatening condition that results when you lose more than 20 percent (one-fifth) of your body’s blood or fluid supply. This severe fluid loss makes it impossible for the heart to pump sufficient blood to your body. Hypovolemic shock can cause many of your organs to fail. The condition requires immediate emergency medical attention in order to survive.” There might not be a better description of the findings of our internal HBCU Money study using NCAA provided data, we were able to get a startling and disturbing look at the athletic departments of public HBCUs athletic departments and their dependency on subsidies. Subsidies reported are a mixture of institutional support, government support, and student fees. Hopefully, this will spark some real conversation and give new light to the debate about whether or not HBCUs as a whole have the means to be athletically competitive long-term or is this a case of poor use of resources that is impairing the overall health of these universities and its students financial health long after they have left their hallowed grounds.

BREAKDOWN BY THE NUMBERS*:

REVENUES

Total: $177.0 million

Median: $7.9 million

Average: $8.0 million

EXPENSES

Total: $178.7 million

Median: $7.9 million

Average: $8.1 million

PROFIT/LOSS

Total: $-1.9 million

Median: $0

Average: $-79 827

SUBSIDY

Total: $126.9 million

Median: $5.5 million

Average: $5.8 million

WITHOUT SUBSIDY PROFIT/LOSS

Total: $-128.6 million

Median:$-5.8 million

Average: $-5.8 million

SUBSIDY % OF REVENUE

Total: 71.7%

Median: 75.0%

Average: 70.9%

*Chicago State University was included in our report of FCS public HBCUs. Considered an HBCU by HBCU Endowment Foundation, the school is a member of WAC, but athletic budget in line with its HBCU brethren.

According to USA Today, “Just 23 of 228 athletics departments at NCAA Division I public schools generated enough money on their own to cover their expenses in 2012. All 23 of the self-sufficient schools are from conferences whose champions automatically qualify for the Bowl Championship Series, which makes sense because that’s where the money is.” That is where the money is. Again, that is where the money is. The FCS public HBCU doing the “best” without a subsidy is Mississippi Valley State University, with a deficit of $2.4 million. In last place, Delaware State University with an egregious $10.5 million deficit without subsidies. With subsidies the most profitable team is Morgan State University at almost $475 000 in the profit column. Florida A&M, as has been reported recently, even with subsidies still manages to run an almost $1.1 million deficit. The report shows that in order for FCS public HBCUs to be able to operate without a subsidy and still produce the $177 million in revenue annually, they would need to set up an endowment of $3 billion. Greater than the sum all HBCUs, public and private, have in their endowment coffers combined. If alumni wanted a number that it would take to make HBCUs athletically competitive this would be it. However, remember this is only for public FCS HBCUs.

I continue to question the strategic investment many HBCUs on this list are currently putting into athletics and not research development or general scholarship. It is not hard to imagine that had FCS private HBCUs been included in the report, these numbers are even more frightening. The FCS public HBCU athletic budgets to research budget ratio approaches 80 percent. Essentially, we are spending $0.80 on athletics for every $1.00 we spend on research. This is unfortunate since all HBCUs do not even breach $500 million combined annually in research. For perspective since we always love to say “well the HWCUs are doing it”, we took a basket of 9 flagship HWCUs in their state and compared their ratio. The schools were University of Alabama, Florida, Georgia, Maryland, Michigan, Mississippi, Texas, LSU, and Ohio State. Combined their athletic budgets are $963.2 million, but their research budgets are a combined $6.8 billion or athletics gets $0.14 for every $1.00 research gets.

Too often HBCU alum and students are being sold a fairy tale of the investment in athletics without actually ever seeing numbers and data to support it. We are asked to just have “faith” that our leadership is doing the right thing. This while schools like Jackson State University and Prairie View A&M University are pining to spend $200 million and $60 million, respectively, on athletic complexes. I have been impressed with Paul Quinn and Spelman College’s decision making to use the athletic funds more strategically, which in the long run will have a major benefit on their institutions health. I love athletics as much as the next HBCUer, but I do not love seeing 90 percent of HBCU graduates finishing with debt to subsidize programs that are nowhere near capable of sustaining themselves. Especially when African Americans are struggling to close the wealth gap. If HBCUs believe they are part of the African American ecosystem and not independent of it, then there will be stronger considerations of how we use resources to maximize our ability to close gaps. Remember, the blood loss from hypovolemic shock eventually will cause ALL organs to fail.

 

 

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5 responses to “Without Subsidies, FCS Public HBCU Athletics Losing $130 Million Annually

  1. How are PWI counterparts on the FCS level doing financially? How are they doing with and/or without subsidies? Is it a HBCUs issue or wider college athletics issue?

  2. How are the counterparts on the FCS level doing financially? What is the percentage rate of dependance of subsidisies of the PWI on that level? Is this a HBCU issue or wider college athletics issue?

  3. I wish people would stop comparing HBCU’S to SEC schools and others mentioned in the article. Almost every school white or black that is not affiliated with the power 5 rarely profits off of athletics. JSU investment in a $200 million Arena was geared more toward a investment for the city. If you where aware of Jackson inability to create economic growth, JSU arena would help bring money to both city and school. There PINING of $200 million was not just something they wanted to do soley for the school. That’s why the administration sold the project as a community effort. You have white schools thy apart of the cusa, sun belt etc that are in similar situations financially as HBCU’S. Stop comparing HBCU’S to power 5 conferences.

  4. This comparing needs to stop. There are just as many PWI schools in dire financial straits. Yes, you WOULD be able to commit more towards research if you had the ability to do it, especially if you received black athletes that keep the money rolling into your institution. That is all carefully designed. Don’t act like slavery doesn’t take on different forms. More effort needs to be spent recruiting top athletic talent to HBC’s to generate revenue. Only then will the quality of improve when revenue is increased. All schools started off as a one room shack or building serving a specific population or need (be it religious or other) so it’s only natural as they’ve thrived and flourished, supported by their donors and alumni, our universities shrank.
    Everything is calculated and there is no solution to fix truly what is designed. Yes there are action steps we could do to bring our schools in better shape but the bigger topic is that these steps would require actual unity and self love- rather than self hatred to bring it together.

  5. Pingback: The 2015 SWAC/MEAC Athletic Financial Review |

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