Tag Archives: student fees

The 2017-2018 SWAC/MEAC Athletic Financial Review


In the third report over the past five years since HBCU Money first began reporting the SWAC/MEAC Athletic Financial Review, there have been losses of $130 million, then $147 million, this year they continue their trend of the athletic black hole of almost $151 million loss through athletics with no correction in sight. Almost unfathomable is that nine of the twenty-one schools* in the SWAC/MEAC have athletic budgets higher than their research budgets. It is disheartening at best that these two HBCU conferences can justify their member institutions athletic spending increasing at a faster rate than college inflation for tuition is in America.

If there is a canary in the coal mine, it is that the amount of subsidies put on the back of students this year overall, median, and average decreased for the first time, albeit by a negligible amount. But that canary is barely seen when no matter how you cut it, students are bearing the brunt of generating HBCU athletic revenues. This year’s review shows that approximately 70 percent of HBCU athletic revenues are generated through subsidies. Something to consider when 90 percent of HBCU students graduate with student loan debt.

REVENUES (in millions)

Total: $202.9 (up 7.1% from 2015-2016)

Median: $10.8 (up 6.1% from 2015-2016)

Average: $10.1  (up 6.8% from 2015-2016)

Highest revenue: Prairie View A&M University  $18.6 million

Lowest revenue: Coppin State University  $3.6 million

EXPENSES (in millions)

Total: $212.0 (up 9.2% from 2015-2016)

Median: $10.8 (up 7.1% from 2015-2016)

Average: $10.6 (up 9.3% from 2015-2016)

Highest expenses: Prairie View A&M University  $18.6 million

Lowest expenses: Mississippi Valley State University  $4.1 million

SUBSIDY

Total: $141.5 (unchanged from 2015-2016)

Median: $6.4 (down 18.4% from 2015-2016)

Average: $7.1 (unchanged from 2015-2016)

Highest subsidy: Prairie View A&M University $15.5 million

Lowest subsidy: Mississippi Valley State University $2.0 million

Highest % of revenues: Prairie View A&M University: 83.7%

Lowest % of revenues: Florida A&M University: 34.2%

PROFIT/LOSS (W/ SUBSIDY)

Total: $-9.1 million (down 97.9% from 2015-2016)

Median: $-26,890 (down 1,244.5% from 2015-2016)

Average: $-455,318 (down 97.9% from 2015-2016)

Highest profit/loss: North Carolina A&T State University  $573,062

Lowest profit/loss: South Carolina State University  $-3,560,974

PROFIT/LOSS (W/O SUBSIDY)

Total: $-150.7 million (down 2.4% from 2015-2016)

Median: $-7.0 million (up 10.0% from 2015-2016)

Average: $-7.5 million (down 1.8% from 2015-2016)

Highest profit/loss: Mississippi Valley State University  $-2,041,761

Lowest profit/loss: Prairie View A&M University  $-15,586,904

CONCLUSION: Older alumni’s desire for athletic glory without assessing the cost to obtain it is going to set younger alumni back decades from becoming contributing alumni – if they are ever able to. This shortsighted vision may have ripple effects far beyond the athletic realm. At current, it would take approximately a $3 billion endowment dedicated to athletics to ween the SWAC/MEAC off of these subsidies onto a sustainable path. Steph Curry’s adoption of Howard’s golf team is clearly a step in the right direction of trying to solve this puzzle without burdening students of today and tomorrow. In fact, the top 10 paid NBA players salary for 2019 is a combined $372 million or $160 million above what all of the SWAC/MEAC expenses are combined. Of course these players by no means can or should fund all of HBCU athletics, but it does show that if we can begin to think outside of the box about how to solve this crisis we must do so before it spirals beyond our reach.

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 or the 2015-2016 review.

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The 5 Steps To HBCU Athletic Profitability


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“Growth and profit are a product of how people work together.” – Ricardo Semler

HBCU presidents, athletic directors, athletic commissioners, and stakeholders gather around the camp fire. We are going to tell you a story of problem solving using critical thinking. Do not worry, this is not a scary story like the one you are telling your students and alumni currently. Many of you want athletics to be your legacy and are willing to mortgage every current student and burgeoning alumni’s future in order to see it come to fruition. Many of you think so far inside the box that Carter G. Woodson would probably blush at just how far you have taken his quote of controlling a man’s mind and how that control will make a man build a back door if one is not present. We even lie to ourselves that the door we have been relegated too looks like our neighbors front door just to suffice our ego. Refusing to even use the assets at your disposal like HBCU business schools, computer science departments, etc. to solve some of our institutions most basic problems.

You know what is not a basic problem? The $147 million that the SWAC and MEAC conferences are hemorrhaging were it not for the $142.5 million in subsidies that come primarily on the backs of their students. Even with those subsidies, the two conferences still managed a $4.6 million loss in the 2014-15 school year. Yet, the same playbook is rolled out every year to makeup for shortfalls. The infamous money games that alumni argue over every year as good or bad for their programs. Ultimately, athletic departments have made them part of their funding model usually in an exchange for treatment that would make Ike Turner blush. However, there is no plan and has been no plan seemingly offered by these HBCU athletic departments that would strategically some day let the money games be icing on the cake if they chose to play them instead of a vital necessity. There is always this talk of the players on the team wanting to test themselves against the “best’. The reality is they have no choice. Players do not schedule these games nor are they consulted. These games are scheduled by those that know if they do not play them, then there may not be an athletic department next year. There are five steps though that can allow HBCU athletics to actually make every program profitable: 

  1. Form the HBCU Athletic Association. Also known as the HBCU version of the NCAA. This is about ownership and leverage. Advertisers pay for schools or conferences that have large alumni bases, strong geographic footprint, and affluent alumni. Although HBCUs lack the latter, the former two is strong leverage when you approach corporate sponsors who are looking to get their brand in front of as many potential consumers as possible. There are 100 HBCUs that comprise geography in the Midwest, Southeast, and even Northeast if you included schools like Roxbury Community College in Boston and Medgar Evers in New York. The NCAA is able to make over $1 billion per year from the March Madness Tournament because it owns the tournament. Again, ownership matters. Having the HAA gives it a powerful economic scale that could go in and do something like buy the old Morris Brown stadium and convert it to a stadium, arena, hotel, and conference center that could host all of the major HBCU sporting events. Now, instead of getting almost nothing of the pie, HBCUs would have an opportunity to share in the parking, ticket, concession, and entertainment revenue pies that ownership over these facilities brings. Again, ownership matters.
  2. Drones. Okay, not just drones, but drones, cameras affixed to athletic facilities, and a website and app that you can purchase a monthly subscription for $10 per month just like Netflix that gives access to every HBCU sporting event for your alma mater and a special up charge for Classics. All of the computer science and communication majors that HBCUs have this seems almost like spiking a beach ball for a score. Put a camera in every corner of the stadium, arena, and field so that it can be remotely operated during a game to show every team’s games. Use drones, they are $99 or build your own, to highlight special views during the games or matches. Get a website and app built that allows people to view it anywhere at anytime. For sports like football, there is an additional charge for professional scouts, which can be a whole other package – a more expensive package.
  3. Conference Endowments. This could be done tomorrow and the fact that it has not been done is sad, really. HBCUs are stronger together than apart. A lesson that Florida A&M University learned the hard way when they tried to make the jump out of the MEAC to FBS. Wherever we go we must go together. With that said, it would make so much more sense if an athletic endowment was set up for each conference that could be equitably split among all the schools. Instead of each department trying to raise money independently, they share the common expense of doing so in hopes of reaching a larger audience. Conservatively, the MEAC and SWAC need an athletic endowment of $3 billion to produce the amount needed to ween themselves off of subsidies from their student population. All those golf tournaments by HBCU boosters that each school puts on could certainly assist in the greater good more so than the robbing Peter to pay Paul model our athletic departments currently exist on. It also provides a real vision – like the church building fund – that there is a goal and this is the result of that goal.
  4. HBCU football and basketball playoffs. This ties back into number one and ownership. HBCUs are forever trying to be the Cinderella story. Moments like North Carolina A&T beating Kent State, Grambling almost beating Arizona, or Norfolk State’s run in the NCAA tournament in 2012 where they reached the Sweet 16. You know what is better than being Cinderella though, getting paid and being profitable. An HBCU football playoff and basketball tournament is an opportunity to have a postseason, hold recruitment and marketing of high school students in cities, and again, own more if not all of the revenue. An eight team playoff from the four major HBCU conferences (SIAC, CIAA, SWAC, & MEAC) that starts the week after Thanksgiving and conclude on New Year’s Day at the HAA owned Morris Brown Stadium, hotel, and conference center. The playoff games themselves could be held in major cities that are geographically and expense friendly to the conferences, but also allow for exposure and recruitment. This is true for the basketball tournament as well. A 16 team (or 32 if you want to invite HBCUs not in HBCU conferences) basketball tournament held in cities like Chicago, New York, and other major basketball hotbeds that give exposure to our schools for future recruitment and a chance to create events we own around them that generate revenue only helps the bottom line. This is not limited to just football and basketball, but every sport. Events bring us money and using HBCU playoffs extends our seasons and extends the ability for them to generate revenue from the populations the events are held in.
  5. Black Owned Company Sponsors. When one hears how much HBCUs get paid by non-black owned corporate sponsors or in their money games it is utterly insulting. How someone treats you is a clear sign of how they feel about you and it is clear that the companies we receive sponsorship from currently think very little of our alumni as potential customers. Have you ever heard of Aliko Dangonte? He is the wealthiest man in Nigeria and owner of the Dangonte Group, which has interest in cement, sugar, and flour. Ventures Africa reports, “In Zimbabwe, Strive Masiyiwa, the founder of telecommunications giant, Econet Wireless, spent a reported $6.4 million setting up a trust for African students at Morehouse College, a historically black institution in the United States.” A sign that HBCUs are on these African entrepreneurs map. Why not approach them and their companies? The Dangonte Stadium, Arena, or Athletic Complex has a nice ring to it. It gives them an opportunity to expand their brand globally and to expand into the holy grail that is America.

Athletics is certainly an important part of the social experience of college and HBCUs, but it is not worth the burden to a people who are already trying to close a wealth gap that is sixteen times greater than their counterparts and are graduating with higher student debt loads despite HBCUs being cheaper on average. Instead of eliminating sports though or just subsidizing ourselves to death, there has to be the question of how do we make them an asset. Not just socially, but financially. There has been talk that the Power 5 conferences will eventually break away from the NCAA and super conferences come up every year in conversation. HBCUs have the opportunity to be ahead of the change curve, lead the change curve, and shift the paradigm instead of being reactive to it or simply mimicking our counterparts behavior after the fact. If we are going to be in a box, at least let it be a box we own and control.

The 2015 SWAC/MEAC Athletic Financial Review


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Two years later, students continue to bear a heavy burden for the pursuit of athletics. Our report is a follow up to the 2014 article where the SWAC and MEAC, without student subsidies were losing $130 million annually in athletics in 2013. It is unfortunate to report that the situation has not improved and has in fact gotten worse. HBCUs, especially the SWAC and MEAC, do not have the luxury of boosters like oil tycoon T. Boone Pickens, Nike’s owner Phil Knight, or even Under Armour’s owner Kevin Plank who give millions annually. In the case of Phil Knight, he and his wife have plowed over $300 million into the University of Oregon’s athletic program to bring it to national prominence. An amount that would cover the student fee contributions by SWAC and MEAC students – twice.

Each year the SWAC and MEAC meet for the SWAC/MEAC Challenge sponsored by Disney and this year will meet in the second annual Celebration Bowl, a post-season game to determine the HBCU “national” champion. Sports are an integral part of the college experience this can not be argued, but at what cost? HBCU students, despite HBCUs in general being cheaper than their PWI counterparts, graduate with higher student debt loads. This often delays and/or prevents all together them from becoming future donors back to their schools or boosters to athletics. The lack of African American wealth, both in households and institutions, no doubt plays a huge role. However, the question remains are we sacrificing too much today and forever burdening ourselves tomorrow?

REVENUES (in millions)

Total: $189.5 (up 7.1% from 2013)

Median: $10.2 (up 29.1% from 2013)

Average: $9.5  (up 18.8% from 2013)

Highest revenue: Norfolk State University  $16.1 million

Lowest revenue: Coppin State University  $3.4 million

EXPENSES (in millions)

Total: $194.1 (up 8.6% from 2013)

Median: $10.1 (up 27.8% from 2013)

Average: $9.7 (up 19.8% from 2013)

Highest expenses: Norfolk State University  $16.1 million

Lowest expenses: Coppin State University  $3.9 million

SUBSIDY

Total: $142.5 (up 12.3% from 2013)

Median: $7.9 (up 43.6% from 2013)

Average: $7.1 (up 22.4% from 2013)

Highest subsidy: Norfolk State University $13.5 million

Lowest subsidy: Mississippi Valley State University $2.3 million

PROFIT/LOSS (W/ SUBSIDY)

Total: $-4.6 million (down 142% from 2013)

Median: $-2 000 (in 2013 median was zero)

Average: $-230 071 (down 188% from 2013)

Highest profit/loss: Alabama A&M University  $215 207

Lowest profit/loss: Grambling State University  $-2 044 323

PROFIT/LOSS (W/O SUBSIDY)

Total: $-147.1 million (down 14.4% from 2013)

Median: $-7.8 million (down 34.5% from 2013)

Average: $-7.4 million (down 27.6% from 2013)

CONCLUSION: The SWAC and MEAC have a challenge, but its not on the fields or hardwoods. It is, however, on the income statements and balance sheets of their athletic departments. HBCU b-schools need to be desperately tasked with the assignment of scribing a new business model for HBCU athletics that takes into account alumni wealth (or lack thereof), minuscule payouts by corporations (Celebration Bowl provides roughly $87 000 to each school), and other factors unique to HBCU sports if they are going to lessen the burden on their students who are currently providing 75 percent of the revenues. At current student loan interest rates and traditional investment return rates, the debt burden for just these athletic fees is $1.1 billion over the next 30 years and an investment loss of $4.5 billion over the same period, respectively. These have long-term consequences to families, HBCU endowments, HBCU athletics, ultimately could become cancerous to the very survival of the institutions themselves.

Editor’s Note: Howard and Hampton are excluded in this report because they are private institutions and their athletic finances were not included in this report or the 2013 report. Chicago State, which was included in the 2013 report was excluded in this report.