Unit 4: Team /School Financials Economics of Sports Unit 4: Team /School Financials

Table 4-1 Operating Expenses for the Seattle Mariners 1993 to 1998 ($Thousands) (slide 1 of 2) 1994 1995 1996 1997 1998 Baseball Operations Player Compensation $32,612 $20,918 $29,732 $39,313 $43,815 $52,392 Team Operations $5,200 $3,825 $5,219 $4,530 $5,353 $6,281 Scouting/Player Development $6,458 $5,205 $6,030 $6,375 $7,017 $7,606 Other Operating Expenses Kingdome Operations $1,898 $1,388 $1,864 $2,777 $3,383 $3,888 Marketing, Publicity, Ticket operations $3,186 $2,663 $2,819 $4,239 $4,859 $5,990 General and Administrative $5,501 $4,798 $5,385 $6,765 $7,395 $7,430 Net Int. and Other Expenses $411 $178 $1,324 $1,274 $1,197 $1,230 King County Settlement* -$4,204 ML Revenue Sharing Agreement** $613 $3,364 $3,417 Total Operating Expenses $55,266 $34,771 $52,373 $65,886 $76,383 $88,234

Table 4-1 Operating Expenses for the Seattle Mariners 1993 to 1998 ($Thousands) (slide 2 of 2) Other Expenses Signing Bonuses $4,540 $2,049 $5,019 $5,164 $5,025 $3,572 Depreciation and Amortization*** $9,237 $6,176 Total Expenses $59,806 $36,820 $57,392 $71,050 $90,645 $97,982 *One-time settlement in a political agreement between the team and King County. **The so-called “luxury tax” that shares revenues among MLB owners ***Only reported for 1997 and 1998.

Table 4-2 Fixed and Variable Costs for the Seattle Mariners 1993 to 1998 ($Thousands) (slide 1 of 2) 1994 1995 1996 1997 1998 Short-Run Fixed Costs Player Compensation $32,612 $20,918 $29,732 $39,313 $43,815 $52,392 Signing Bonuses $4,540 $2,049 $5,019 $5,164 $5,025 $3,572 Revenue Sharing Agreement* $613 $3,364 $3,417 Net Int. and Other Expenses $411 $178 $1,324 $1,274 $1,197 $1,230 Depreciation and Amortization** $9,237 $6,176 Short-Run Fixed Costs Total $37,563 $23,145 $36,075 $46,364 $62,638 $66,787 Short-Run Variable Costs Marketing, Publicity, Ticket operations $3,186 $2,663 $2,819 $4,239 $4,859 $5,990 Scouting/Player Development $6,458 $5,205 $6,030 $6,375 $7,017 $7,606 Team Operations $5,200 $3,825 $5,219 $4,530 $5,353 $6,281 Kingdome Operations $1,898 $1,388 $1,864 $2,777 $3,383 $3,888 Short-Run Variable Costs Total $16,742 $13,081 $15,932 $17,921 $20,612 $23,765

Table 4-2 Fixed and Variable Costs for the Seattle Mariners 1993 to 1998 ($Thousands) (slide 2 of 2) Mixed Category General and Administrative $5,501 $4,798 $5,385 $6,765 $7,395 $7,430 Short-Run Total Costs $59,806 $41,024 $57,392 $71,050 $90,645 $97,982 *Pooled sharing began in 1996. **Only reported in 1997 and 1998. Source: Adapted from Table 4-1

Table 4-8 Seattle Supersonics Annual Operations Statements, 2000-01 through 2004-05 ($2009) (slide 1 of 3) Revenues 2000-01 2001-02 2002-03 2003-04 2004-05 Ticket Revenue $6,322,893 $32,734,483 $32,642,784 $30,688,944 $31,744,548 Playoff Revenue $0 $2,518,973 $134,833 $9,039,957 National Broadcast Revenue $4,192,764 $32,940,139 $27,953,885 $27,983,980 $27,665,711 Local Broadcast and Sponsor Revenue $3,353,843 $20,480,897 $19,646,688 $18,915,958 $20,234,546 Suite Revenue $1,013,643 $2,107,358 $1,861,992 $2,023,807 $1,489,960 Equity in Earnings of NBA Parnerships $683,694 $2,290,352 $2,816,976 $1,532,441 $2,691,844 Luxury Tax Revenue $10,428,860 $9,739,090 NBA League-Wide Revenue Share $625,147 $772,806 $2,119,732 $14,500,657 $1,911,906 Merchandise Sale $268,374 $1,287,688 $1,421,044 $1,484,932 $2,435,027 Concession Revenue $804,520 $1,144,605 $1,597,964 $2,016,136 Other Revenue $210,523 $121,771 $703,805 $653,811 $514,283 Total $16,670,881 $96,058,987 $100,740,372 $109,256,415 $99,743,918

Table 4-8 Seattle Supersonics Annual Operations Statements, 2000-01 through 2004-05 ($2009) (slide 2 of 3) Costs and Expenses Team and Game Expenses, Net $17,722,927 $68,529,341 $78,267,947 $77,547,645 $81,241,211 Depreciation and Amortization $29,041,833 $48,330,013 $25,933,716 $17,882,653 $12,293,206 General and Administrative $7,740,733 $17,639,447 $18,920,022 $16,541,795 $14,269,289 Local Broadcast and Sponsor Expenses $2,792,008 $12,029,261 $12,055,111 $12,441,237 $4,722,828 Ticket Sales and Operating Expenses $1,169,141 $3,796,714 $4,857,162 $5,168,755 $6,737,187 Arena Expenses $841,111 $1,422,170 $1,440,009 $1,468,050 $1,483,463 Community and Public Relations $588,580 $1,407,985 $1,223,913 $971,472 $1,372,566 Playoff Expenses $0 $1,582,423 $26,442 $193,665 $6,330,722 Cost of Merchandise Sales $547,183 $640,763 $768,251 $886,096 $1,291,849 Other Expenses $871,679 $418,300 $515,970 $425,653 $560,146 Total $61,315,195 $155,796,416 $144,008,543 $133,527,020 $130,302,465

Table 4-8 Seattle Supersonics Annual Operations Statements, 2000-01 through 2004-05 ($2009) (slide 3 of 3) Loss from Operations -$44,644,314 -$59,737,429 -$43,268,170 -$24,270,605 -$30,558,547 Gain (Loss) On Sale of Asset $0 -$785 -$6,960 $17,018 Gain on Interest Rate Swap $301,298 $769,773 Interest Expense, Net -$2,855,613 -$3,368,758 -$3,346,491 -$3,655,314 -$3,292,466 Net Loss -$47,499,927 -$63,106,187 -$46,615,446 -$27,631,580 -$33,064,223 Notes: Schultz took formal financial control of the team on December 15, 2000. The purchase price as $200 million. The team fiscal year reportedly ended on September 30.

College Sports 2011 College Athletic Depts P&L

Table 13-1 Revenues and Expenses of FBS Athletic Departments (2009 dollars) (slide 1 of 2) Year Average Total Revenue a Average Total Expenditures Average Net Percent Showing Profit Maximum Total Revenue Total Revenue RatioB Maximum Total Expenditures Total Expenditures RatioC With institutional support 1985 $13,804,000 $14,007,000 N/A 42% $36,134,000 2.6 $33,495,000 2.4 1989 $17,248,000 $17,072,000 80% $39,952,000 2.3 $38,896,000 1993 $20,536,000 $19,630,000 -$302,000 69% $45,602,000 2.2 $42,280,000 1995 $22,165,000 $20,449,000 -$286,000 65% $56,199,000 2.5 $46,046,000 1997 $24,208,000 $23,528,000 -$1,088,000 71% $64,736,000 2.7 $64,872,000 2.8 1999 $28,689,000 $26,200,000 $0 67% $95,652,270 3.3 $83,437,830 3.2 2001 $30,873,000 $28,536,000 -$738,000 $97,908,000 $64,083,000 2003 $34,986,000 $32,368,000 -$714,000 66% $104,482,000 3.0 $79,849,000 2004 $32,728,240 $33,629,560 $121,800 $120,490,360 3.7 $104,502,080 3.1 2005 $36,790,880 $34,863,360 $135,520 $100,465,120 $100,329,600 2.9

Table 13-1 Revenues and Expenses of FBS Athletic Departments (2009 dollars) (slide 2 of 2) Without institutional support $19,328,000 $19,630,000 -$302,000 51% $20,163,000 $20,449,000 -$286,000 46% $22,440,000 $23,528,000 -$1,088,000 43% $26,200,000 $0 $27,798,000 $28,536,000 -$738,000 35% $31,654,000 $32,368,000 -$714,000 40% AAverages were reported to 2001. After that medians were reported. BTotal Revenue Ratio = Maximum Total Revenue/Average Total Revenue. CTotal Expenditures Ratio = Maximum Total Expenditures/Average Total Expenditures. Note: The source lists data for 2006 that are not shown here due a suspected error in the report.Source: Author’s calculations from tables in Fulks (2003, 2008).

Average Total Expenditures Men's Women's Year Average Total Revenue Average Total Expenditures Average Net 1993 14,194,000 10,570,000 3,775,000 755,000 2,718,000 -1,963,000 1995 14,014,000 10,582,000 3,432,000 858,000 3,289,000 -2,431,000 1997 15,776,000 11,288,000 4,488,000 1,224,000 4,216,000 -3,128,000 1999 17,685,000 12,445,000 5,240,000 1,965,000 5,109,000 -3,144,000 2001 19,434,000 13,407,000 6,027,000 1,722,000 5,658,000 -3,936,000 2003 22,134,000 14,875,000 7,259,000 2,142,000 6,426,000 -4,284,000 2004 17,317,640 15,257,480 1,758,560 1,796,840 6,085,360 -3,857,000 2005 19,233,760 14,940,800 2,142,560 1,820,000 6,478,080 -4,021,920 2006 20,329,920 16,411,680 1,305,720 1,838,160 6,634,440 -4,355,640 Table 13.2 Revenue and Expenses of Men’s and Women’s Programs in FBS Athletic Departments ($2009) (slide 1 of 2)

Figure 13.2 Non-BCS and BCS Average Payouts, 1981-82 to 2008-09 (2009 dollars). Legend: At the average, BCS bowl payouts have always dwarfed non-BCS bowl payouts. In addition, while non-BCS average payouts have been steady over time, average BCS bowl payouts have grown in leaps and bounds, although they have fallen a bit in the last few years.

Figure 13-3 The University and the Athletic Department Legend: All major elements of the university, inside the triangle, produce outputs (Research, Teaching and Service) that generate money and political support for the university. The university supports those elements best that provide money and political support the best.

Table 13-4 Naming Rights in College Sports Facility College Total Paid ($Millions) Duration of Rights (in Years) End Year Save Mart Center Fresno State 40 23 2022 Comcast Center University of Maryland 20 25 2026 Jones Stadium Texas Tech 2019 United Spirit Center 10 2016 Value City Arena Ohio State 12.5 Indefinite Cox Arena San Diego State 12 Bank of America Washington 5.1 2008 Colonial Center Arena University of South Carolina 5.5 Cox Pavilion University of Nevada Las Vegas 5 2009 Wells Fargo Arena Arizona State Papa John’s Cardinal Stadium Louisville 15 2012 Movie Gallery Veterans Stadium Troy State University Coors Events Center Colorado Carrier Dome Syracuse 2.75 Alltel Arena Virginia Commonwealth University 2 Cessna Stadium Wichita State 0.3

Figure 13-4 The Athletic Department Org Chart Legend: At the bottom, individual team coaches are responsible to their Athletic Director (the equivalent of the Dean for academic departments). The line of responsibility and oversight moves upward through the President (typically, not the Provost as in academic departments), the Board of Regents and, ultimately, to the Governor.

Table 13-8 Budgets at Washington State University (slide 1 of 2) Revenues 1996-97 1997-98 Difference Booster Club Scholarship Contributions/Endowment $1,968,286 $2,451,854 $483,568 Corporate Support $314,476 $302,739 -$11,737 Football Away Guarantees $1,102,150 $1,344,020 $241,870 Football Tickets $928,230 $1,502,620 $574,390 Men’s Basketball $898,643 $1,312,020 $413,377 NCAA & Conference $349,224 $447,081 $97,857 Other $361,144 $432,316 $71,172 Radio/Sports Video $539,105 $472,114 -$66,991 Student Fees and Tickets $1,408,431 $1,557,302 $148,871 TV- Football Conference $2,589,232 $3,178,349 $589,117 University Support/Tuition Waivers $3,042,047 $2,941,530 -$100,517 Royalties $490,000 Concessions/Merchandise $277,810 Carry Forward $419,269 $111,197 -$308,072 Total Revenue $13,920,237 $16,820,952 $2,900,715

Table 13-8 Budgets at Washington State University (slide 2 of 2) Expenses Capitalized Equipment $234,795 $733,373 $498,578 Employee Benefits $551,972 $1,054,600 $502,628 Goods and Services $2,799,511 $3,814,930 $1,015,419 Recruiting/Professional Development $617,401 $586,998 -$30,403 Salaries $4,140,899 $4,067,257 -$73,642 Scholarships $3,192,773 $2,425,524 -$767,249 Student and Other Wages $629,740 $1,118,885 $489,145 Team Travel $1,310,911 $2,328,934 $1,018,023 University Overhead $437,505 $563,375 $125,870 Total Expenses $13,915,507 $16,693,876 $2,778,369 Net Operating income $4,730 $127,076 $122,346

Table 13-9 Operating Revenues and Expenses, Washington State University and the University of Washington, 2003-2004 (slide 1 of 2) WSU Revenues Men's Teams Women's Teams Ratio Total Basketball $2,148,239 $316,975 6.8 $2,465,214 Football $12,630,209 Other sports $418,866 $1,422,675 0.3 $1,841,541 Not allocated by gender $13,538,665 Grand total $15,197,314 $1,739,650 8.7 $30,475,629 Expenses $1,653,650 $1,253,920 1.3 $2,907,570 $7,668,687 $1,710,020 $4,275,601 0.4 $5,985,621 $12,951,738 $11,032,357 $5,529,521 2.0 $29,513,616 Net before amortization $962,013

Table 13-9 Operating Revenues and Expenses, Washington State University and the University of Washington, 2003-2004 (slide 2 of 2) UW Revenues Men's Teams Women's Teams Total Basketball $4,235,886 $1,083,993 3.9 $5,319,879 Football $28,569,263 Other sports $675,941 $1,811,108 0.4 $2,487,049 Not allocated by gender $6,175,329 Grand total $33,481,090 $2,895,101 11.6 $42,551,520 Expenses $2,492,670 $1,661,035 1.5 $4,153,705 $12,640,090 $3,970,979 $5,875,726 0.7 $9,846,705 $14,749,393 $19,103,739 $7,536,761 2.5 $41,389,893 Net before amortization $1,161,627