College Football Teams Are Risky and Expensive—and Schools Keep Adding Them

Universities still think the sport’s benefits outweigh the costs.

The business model of college football, long a financial boon to universities, is breaking down. A weeklong look at the pressures of rising costs, falling revenue and what, if anything, universities can do about it. Read the rest of the series here.

At many schools, the costs of football are starting to challenge the benefits. It’s expensive, it doesn’t always make money, many academic faculty resent it, and the ongoing debate over health risks and players’ labor rights put universities in an awkward position.

Taken together, football could look like the kind of hassle a university president might try to avoid.

Yet few do. In the past eight years, 57 colleges and universities have started an NCAA football program. The University of Alabama, at Birmingham, restored its team to the Football Bowl Subdivision. Another 11 joined the Football Championship Subdivision (formerly known as Division I-AA), and the rest are competing at lower levels—Divisions II or III. For all but UAB, there’s little money to be made from TV or ticket sales.

In the past decade, annual football expenses at a typical FCS school have increased from less than $2 million to $3.5 million. In the same period, revenue has expanded from $430,000 to $1 million. Middle-of-the-road FCS programs—a division that includes University of Maine, Colgate, Portland State—are losing millions on football altogether.

In spite of all this, East Tennessee State University still decided to add football in 2015. The team costs about $4 million to field, one-quarter of the overall department budget. Encouraged by the school’s president, students approved a $125 fee that would cover $2.8 million of the football team’s costs. “That was the only way we could do it,” said Richard Sander, originally a consultant on the football revival and later hired as the school’s athletic director.

ETSU, like most schools, sees advantages to football that may not show up on the balance sheet. Football is thought to drive alumni donations and raise a school’s profile beyond its immediate regional footprint, creating a better pool of prospective students. University officials also say it’s a point of community pride and juices local businesses through such events as pep rallies and homecoming.

Of course, a focus on football isn’t the only way to achieve those goals. According to the Council for Aid to Education, only three of the 10 schools that raised at least $500 million from alumni in 2015 have FBS football teams. The rest of the list is largely composed of academically excellent universities such as Harvard, Princeton, and Johns Hopkins.

The same is true of the schools with the highest rates of alumni giving. Only two—Princeton University and Davidson College—compete in NCAA Division I. The rest are smaller, top-flight liberal arts colleges such as Williams, Wellesley, and Carleton.

Other schools hitch their athletic wagon to another sport: men’s basketball. With smaller rosters and less equipment, it’s cheaper to field and more competitive. The attention is also significant. Schools such as Gonzaga, Marquette, and Xavier owe their national reputations at least in part to the success of their basketball teams.

And insofar as anyone outside of Appalachia has heard of ETSU, it may be because of basketball. The Buccaneers regularly contend for a conference title and have gone to the NCAA tournament four times in the past 15 years.

ETSU has relied heavily on basketball. When Sander arrived in Johnson City, the Bucs were playing five or six “guarantee games” every year, getting paid for road games at basketball giants. That earned about $600,000 a year, but it also hobbled the team with a losing record early, turning off fans and demoralizing the athletes. ETSU was damaging its most important sport just to support the others.

Football won’t fully solve that problem. What it could do is take some of the pressure off basketball and raise overall morale around Buccaneers athletics. “The university decided it was better for quality of life, better for branding, better for enrollment, and the expectation here in town is to have football,” Sander said. “It’s much more than trying to create revenue, because it’s not going to do it. There’s no doubt about that.”

He’s also clear that ETSU is entering into a precarious financial bargain with its new football program. The school had a football team for decades until, in 2003, it disbanded because the team was financially unsustainable. An effort to bring it back in 2007 failed when students voted down a $50 fee increase to fund the program. All signs suggest that football is back to stay, but at what cost?

“Enrollment nationwide is trending down, so tuition gets raised, and that hits us by reducing student support and raising the cost of scholarships,” Sander said. “Throw in the rising cost of coaching salaries, health care, other things. Eventually you get to a point of, how can I survive? It makes me real nervous.”