Tag Archives: swac

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 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.

The Economics Of Playing HBCU Championships At Pro Stadiums – When Winners Still Lose


Essentially, economics is the science of determining whether the interests of human beings are harmonious or antagonistic. – Claude-Frédéric Bastiat

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This past November, I attended the 2013 SWAC championship game with my father despite our family school, Prairie View A&M not being present. My father felt it was important to go out and support the SWAC. Our family annually attends the SWAC’s Labor Day Classic between Prairie View A&M University and Texas Southern University, which was eventually put out of Reliant it is rumored from poor attendance. A very sad indictment since Prairie View and Texas Southern are located 45 minutes and 15 minutes from the stadium, respectively. My father and I discussed why HBCUs have such a difficult time with attendance overall, save for a few select schools that travel really well. Even more importantly to me was whether the economics of playing the SWAC football championship in football at Reliant Stadium and the SWAC basketball championship at Toyota Center made dollars and sense. My father noted as he bought our tickets that the median ticket price was $35 that night and if the attendance came in well that the SWAC and both schools should do well. However, my question was could they do better?

The reported attendance at the game was 38 985 according to HBCU Digest. Calculated with the stated median price from above it equals out to approximately $1.37 million. Not a bad days haul on its first examination. Unfortunately, the SWAC does not own Reliant and therefore having a game there is not free. Based on the financial terms that were given for the UH-SMU game at Reliant, we can start to see just perhaps what that final figure might look like. There is a $75 000 license fee per game. Then there is the facility expense of $85 000 for 30 000 to attend plus $2 for every attendee over 30 000, bringing the total expense for the SWAC game to $177 970. All parking and concession revenue go to Reliant and 20 percent of merchandise sales also go to Reliant. Using a ratio of four people to a car, then the SWAC championship car attendance was 9 746 with parking cost at $10 or revenue of approximately $98 000. The median soda/beer cost at Reliant is $6.13 and a regular nacho (easily the most popular item at the SWAC championship – probably because it was the cheapest) was $7.00. Assuming that half of attendees will purchase at a minimum a drink and nacho that is worth approximately $256 000 based on the game’s attendance. This means that HBCUs are potentially only taking home 61 percent of the potential revenue (not including merchandise) when they play at professional stadiums if this is a standard deal. In the SWAC’s case a loss of revenue equal to $532 000 (not including merchandise) just for the football game.

My father’s argument was that if the game had not been played at the Reliant, then most fans would not come nor do most HBCU stadiums have the capacity for 40 000 fans. Prairie View’s stadium at best holds 5 000 comfortably. He argues that fans want to be in a nice venue, especially if you plan to get the fan who has no rooting interest to come to the game. There is some validity to this since the attendance for the SWAC championship when it was in Birmingham struggled mightily with attendance, even when Alabama A&M or Alabama State were in the game. There is also the issue of lodging, which for rural HBCUs tend to be lacking. That being said, I am not totally convinced.

I believe if the game was located in the central most urban geographic location to both schools playing in the championship, then an opportunity to collect a vast more of the pie could be accomplished. Could I be wrong in this? Absolutely. However, that we have not explored alternatives is an issue that we can ill afford. Given that conferences tend to share the revenues of these games throughout the conferencem it is worth an economic examination. Just as classics should be re-examined and the very questionable deal that HBCUs have with ESPN and the Disney SWAC/MEAC classic where attendance has consistently been less than stellar.

It often feels as if there is a lack of creativity to HBCU athletic departments. HBCU athletics will never be profitable because demographics simply do not allow for it. However, they can be less of a loss leader than they currently exhibit. Already underfunded, instead of trying out of the box scenarios that could draw larger crowds to generate higher revenues, we seem content to just mimic our counterparts who have vast resources and seven and eight figure boosters. Do we believe we can just walk by a penny on the ground? If we do, then we are in real denial about our financial crisis.

Student Debt Profile By Conference (School By School) – The SWAC


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Alabama A&M University

Average debt of graduates, 2011 – $33 038

Proportion of graduates with debt, 2011 – 95%

Nonfederal debt, % of total debt of graduates, 2011 – 16%

2010-11 Pell Grant recipients – 66%

Alabama State University

Average debt of graduates, 2011 – $29 975

Proportion of graduates with debt, 2011 – 79%

Nonfederal debt, % of total debt of graduates, 2011 – 0%

2010-11 Pell Grant recipients – 71%

Alcorn State University

Average debt of graduates, 2011 – $28 786

Proportion of graduates with debt, 2011 – 90%

Nonfederal debt, % of total debt of graduates, 2011 – 2%

2010-11 Pell Grant recipients – 80%

University of Arkansas at Pine-Bluff

Average debt of graduates, 2011 – N/A

Proportion of graduates with debt, 2011 – N/A

Nonfederal debt, % of total debt of graduates, 2011 – N/A

2010-11 Pell Grant recipients – 70%

Grambling State University

Average debt of graduates, 2011 – N/A

Proportion of graduates with debt, 2011 – N/A

Nonfederal debt, % of total debt of graduates, 2011 – N/A

2010-11 Pell Grant recipients – 69%

Jackson State University

Average debt of graduates, 2011 – N/A

Proportion of graduates with debt, 2011 – N/A

Nonfederal debt, % of total debt of graduates, 2011 – N/A

2010-11 Pell Grant recipients – 75%

Mississippi Valley State University

Average debt of graduates, 2011 – N/A

Proportion of graduates with debt, 2011 – N/A

Nonfederal debt, % of total debt of graduates, 2011 – N/A

2010-11 Pell Grant recipients – 81%

Prairie View A&M University

Average debt of graduates, 2011 – N/A

Proportion of graduates with debt, 2011 – 69%

Nonfederal debt, % of total debt of graduates, 2011 – N/A

2010-11 Pell Grant recipients – 64%

Southern University-Baton Rouge

Average debt of graduates, 2011 – N/A

Proportion of graduates with debt, 2011 – N/A

Nonfederal debt, % of total debt of graduates, 2011 – N/A

2010-11 Pell Grant recipients – N/A

Texas Southern University

Average debt of graduates, 2011 – $36 296

Proportion of graduates with debt, 2011 – 84%

Nonfederal debt, % of total debt of graduates, 2011 – 2%

2010-11 Pell Grant recipients – 71%

Source: The Project on Student Debt