In the fourth HBCU Money report on the SWAC/MEAC’s athletic finances, there has been one trend that is consistent – an acute amount of red on the balance sheet of each respective HBCU as it pertains to their athletic departments and it continues to grow redder and redder. Since HBCU Money first began reporting the SWAC/MEAC Athletic Financial Review, there have been losses of $128.6 million (2014-2015), $147.1 million (2016-2017), $150.7 million (2017-2018), and this year they continue their trend of the athletic black hole with losses over $161 million through athletics with no correction in sight. Not exactly the cash generating juggernauts that HBCU alumni have in mind when it comes to how deeply many believe that athletics can be the financial savior to HBCU financial prosperity. Instead, athletics seems to be potentially at the crux of many HBCU financial woes. Almost unfathomable is that many in the SWAC/MEAC have athletic budgets higher than their research budgets.
The harsh reality is that even with all the popularity buzz generated by Jackson State University’s head football coach, Deion Sanders, the factors working against HBCU athletics ever achieving real profitability remains a pipe dream at best. To land a major television contract, which is the only reason on mass that the SEC and Big 10 are the profitable athletic programs they are requires something that HBCU alumni bases severely lack. Large fan bases that have high incomes and an affluence. The harsh reality that HBCUs have small alumni bases, a reality that has been exacerbated post-desegregation where now HBCUs only get 9 percent of African Americans in college, combined with African America having both the lowest median income and wealth do not make for a recipe for advertisers to pay top dollar to television stations who would then healthily compensate HBCU institutions. HBCU athletics can be profitable, but it requires a completely different business model than our PWI counterparts. See, “The 5 Steps To HBCU Athletic Profitability”.
HBCU athletic revenues went down while expenses and subsidies went up in 2019-2020. That is usually a trend all would prefer be flipped. Students continue to bear the brunt of generating HBCU athletic revenues. This year’s review shows that approximately 73 percent of HBCU athletic revenues are generated through subsidies, up from 70 percent the year prior. Something to consider when 90 percent of HBCU students graduate with student loan debt.
REVENUES (in millions)
Total: $200.4 (down 1.2% from 2017-2018)
Median: $10.3 (down 4.6% from 2017-2018)
Average: $10.6 (up 5.0% from 2017-2018)
Highest revenue: Prairie View A&M University $18.7 million
Lowest revenue: Coppin State University $2.8 million
EXPENSES (in millions)
Total: $213.0 (up 0.5% from 2017-2018)
Median: $12.5 (up 15.7% from 2017-2018)
Average: $11.2 (up 5.7% from 2017-2018)
Highest expenses: Prairie View A&M University $18.7 million
Lowest expenses: Mississippi Valley State University $3.9 million
SUBSIDY
Total: $148.4 (up 4.9% from 2017-2018)
Median: $6.4 (down 18.4% from 2017-2018)
Average: $7.1 (unchanged from 2017-2018)
Highest subsidy: Prairie View A&M University $15.5 million
Lowest subsidy: Coppin State University $1.7 million
Highest % of revenues: Delaware State University: 92.0%
Lowest % of revenues: Florida A&M University: 37.0%
PROFIT/LOSS (W/ SUBSIDY)
Total: $-12.7 million (down 40.0% from 2017-2018)
Median: $0 (up 100.0% from 2017-2018)
Average: $-666,295 (down 46.3% from 2017-2018)
Highest profit/loss: North Carolina A&T State University $615,094
Lowest profit/loss: North Carolina Central University $-6,264,082
PROFIT/LOSS (W/O SUBSIDY)
Total: $-161.0 million (down 6.8% from 2017-2018)
Median: $-9.8 million (down 40.0% from 2017-2018)
Average: $-8.5 million (down 13.3% from 2017-2018)
Highest profit/loss: Mississippi Valley State University $-2,177,123
Lowest profit/loss: Prairie View A&M University $-15,417,471
CONCLUSION: At current, it would take an approximately $4.3 billion endowment dedicated to athletics to ween the SWAC/MEAC off of these subsidies onto a sustainable path. A sum greater than all HBCU endowments combined. Perhaps through merchandise sales, Jackson State could see its way to profitability without subsidies. Perhaps, but as former HBCU alumnus and NFL Hall of Famer Shannon Sharpe recently said, “There is only one Deion Sanders”. One thing is for certain, HBCUs have not done a proper cost-benefit analysis for the money they spend and subsidize to their athletic departments nor have they explored potential alternative models.
Editor’s Note: Howard and Bethune-Cookman are excluded in this report because they are private institutions and their athletic finances were not included in this report.
Source: USA Today
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