UK economic stats vs. pay for play.

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UK economic stats vs. pay for play.

Post  MULECHOPS on Tue Jul 12, 2011 11:15 pm

Editor’s note: is taking a closer look this week at the possibility of paying college athletes. Can schools afford the pay for play option? Here's an overview of Kentucky’s financial situation.

How healthy is Kentucky's athletics budget? Healthy enough that this spring it decided to give John Calipari -- who has invigorated UK hoops with unprecedented recruiting -- a two-year contract extension that made Calipari's total deal worth $36.5 million over the next eight seasons. To many hoops programs, a $4.5 million budget (let alone a coach's salary!) would be a dream come true. At Kentucky, where hoops is the king of the Commonwealth, it's merely the cost of doing business.

Fortunately for UK, business is good. Not only is the fan-favorite Calipari winning, but his contract served as an indicator of just how robust UK's athletics budget was. In fiscal year 2011, Kentucky generated $79,380,000 in gross revenues, enough to pay for all of the school's non-revenue producing sports like golf, tennis, rifle (yes, rifle) and the rest. By the end of the year, Kentucky had a tidy $2 million left over, a sum it diverted to capital projects benefiting both the department and the University of Kentucky at large. And it did so while extracting a much smaller percentage of its revenues from student fees (less than 1 percent) than many Division I programs.

Kentucky football and basketball are the Big Blue Whales; financially, as at most BCS programs, the Olympic sports are tiny trout swimming in the big boys' wake. But could that arrangement still work if schools were required to increase scholarships to cover the cost of attendance across all sports? After some quick back-of-the-envelope math, the answer, basically, is yes.

Kentucky's enrollment site lists total cost of attendance for in-state undergraduate students at $22,300 (for out-of-state students the total is $31,900). The differences between that figure and the one Kentucky currently pays its athletes, according to a spokesman for the university, come down to $400 in supplies, $700 in travel, $40 in loan origination, and a $26 room and board difference from athletics room and board. That adds up to $2,666, which isn't too far off from many of the cost of attendance proposal discussions we've heard in recent weeks.

If Kentucky were to give all 442 of its non-revenue-producing student athletes an extra $2,666 per year, it would cost the university an additional $1,178,372 annually. When you count football players and basketball players, you add another 150 student-athletes and the total outlay rises to $1,444,972.

That's a chunk of change, to be sure, but it doesn't take an expert on algorithms to realize that $1.1 million or $1.4 million -- which, again, are merely estimates -- aren't going to cripple the Big Blue Nation anytime soon. In 2012, Kentucky's budget is projected to reach $83.6 million dollars. A million dollars is never a drop in the bucket. Even so, that's an awfully big bucket.

In other words, if your budget is big enough to give your coach $36.5 million over eight years, it's probably big enough to afford the outlays of any change to the scholarship structure. There's a reason BCS conferences like the Big Ten are pushing for the cost of attendance scholarships: Life in the big leagues has its perks.

What a full scholarship entails: (NCAA full scholarship – Tuition and fees, room, board, and required books)

Tuition: $9,260.00 in-state, $18,865.00 out-of-state
Room and board: $9,974.00 room and board
Books: $400.00 books

Full Cost of Attendance: In-State: $22,300.00 Out-of-State: $31,900.00

Cost of attendance includes (in addition to NCAA scholarship elements – tuition, fees, room, board, and books) $400 Supplies, $700 Travel, $1,500 Personal, and $40 loan origination, and $26 room and board difference from athletics room and board.

All numbers FY011:

School: Kentucky
Revenue: $79,380,000
Expenses: $77,394,500

Football (137 athletes) R: $29,440,000 / E: $9,048,732
Men's basketball (13 athletes) $16,035,000 / $10,165,526
Other sports -- Men's (8 sports / 215 athletes) $60,000 / $3,406,283
Other sports -- Women's (including basketball) (12 sports / 227 athletes) $225,000 / $6,639,665

Total: $1,985,500 (Total diverted to "capital projects" so total department net is zero)

Student fees: $15.50 per student per semester, $31.00 per academic year
Amount athletics receives from student fees: $750,000 Very Happy

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Favorite College team: : UK
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