Earlier this week, USA Today released financial numbers for athletic departments across the country. I thought it would be interesting to take a look at Virginia Tech’s numbers as compared to other ACC schools, and major programs across the country.
Note that Randy Jones will be doing a VT finance TSL Pass article again this year, and this isn’t meant to overlap Randy’s work. It’s simply a different way of looking at things.
Remember that this is about accounting. Some schools might choose to count revenue differently than others. I’ll admit I’m a novice when it comes to accounting, but you accountants out there know what I’m talking about.
The National Championship: A Rich School’s Game
Let’s take a look at all the teams that have played for a National Championship in the BCS era and see how they stack up in the national rankings in terms of 2012 revenue (2011-12 academic year).
#1 Texas: $163,295,115
#2 Ohio State: $142,043,057
#4 Alabama: $124,899,945
#5 Florida: $120,772,106
#7 LSU: $114,787,786
#9 Oklahoma: $106,456,616
#10 Auburn: $105,951,251
#12 Tennessee: $102,884,286
#13 FSU: $100,049,444
#16 Oregon: $94,635,829
#26 Nebraska: $81,631,252
#34 Virginia Tech: $70,723,748
Note that schools like Southern Cal and Miami are private schools, so they don’t have to report athletic department finances. I’d imagine that Miami’s isn’t particularly high, though their location helps them make up for that in terms of recruiting.
Every one of those schools except for Oregon, Nebraska and Virginia Tech has won a National Championship during the BCS era, and obviously those three schools are the lowest ranked in terms of 2012 revenue of all programs that have played for a National Championship.
It’s important to note that every single program that has won a National Championship in the BCS era brought in at least $100 million in revenue in 2012. That shows that teams with bigger fan bases who can fill 80,000+ seat stadiums are capable of generating a lot more revenue, and that those fan bases, stadiums and facilities are important for attracting the recruits needed to win a National Championship.
You can probably put an asterisk next to Oregon. They don’t have a huge stadium or a huge fan base, but they’re funded by Nike founder Phil Knight, so quite a bit of Nike money goes into that program.
That tells me that Virginia Tech needs to continue to try and build their fan base and donation support. They need to try to get younger alums involved in the Hokie Club to raise more donation money. They need to find different ways to generate revenue for the athletic department. (As a side note, the ability to use credit cards to purchase concessions in Lane Stadium and Cassell Coliseum would be a start. I don’t know how much food I haven’t bought over the years because I never carry cash on me, but it probably runs into the hundreds of dollars. And I know I’m not the only one.)
I think it’s important to remember that Virginia Tech hasn’t been a big state institution for very long, at least not when compared to the other schools on that list. For over half of Virginia Tech’s existence, it has been a small military school. As a university, Virginia Tech is still growing. I think it’s pretty impressive what the Hokies have been able to do, considering how they stack up financially to those other athletic departments.
Of course, being in the $100 million club doesn’t guarantee you a National Championship.
#3 Michigan: $140,131,187
#6 Texas A&M: $119,702,222
#8 Penn State: $108,252,281
#11 Wisconsin: $103,803,040
None of those schools have played for a National Championship since the BCS era began. Michigan did manage to split the title in 1997, the year before the BCS began. Each one of those programs has the potential to win the National Championship with the right coaching staff, simply because they all have very strong financial foundations. Penn State might be down right now, but the potential will always be there because of their huge fan base, their 100,000+ seat stadium, and their incredible amount of money.
The long-term solution for Virginia Tech is sustaining growth and finding new revenue streams, just like every other business (come on Swofford, get with the program on an ACC Network!). The short-term solution is finding and signing the next Michael Vick. That’s tough, because these days the Hokies would have to beat out schools with a much higher prestige than Syracuse to land a guy like Vick.
Florida State is the only athletic department in the ACC that surpassed $100 million in revenue, and the Noles barely make it above that mark. Here’s how the league’s schools stack up, and remember that private schools don’t report.
NC State: $59,757,911
Virginia Tech ranks in the middle of the pack in the ACC, with Duke, Wake, Notre Dame, Syracuse and Miami not reporting in because of their private school status. Pitt’s numbers aren’t available either, despite their status as a public school.
The Hokies are 5th out of those nine schools, and they are actually closer to 8th place Georgia Tech than they are 4th place UVA. That doesn’t necessarily mean anything when it comes to football, as schools like UVA and UNC spend more on their Olympic sports than Virginia Tech. Tech’s football program funds the Olympic sports, but in general I think the Hokies do a good job in keeping things football-centric, which is the correct decision. It is the sport that pays the bills, after all.
Louisville’s numbers are particularly impressive. They’ve been playing in the Big East, which has a much smaller television contract than the ACC. Once they join the ACC, look for their revenue to take a big jump. At some point they could potentially join Florida State in that $100 million club.
I had no idea that Louisville had so much money until recently, when they were admitted to the ACC. That’s going to be a great move for the conference, and for Louisville. The ACC just grabbed a team that destroyed Florida in the Sugar Bowl, while Florida State won the Orange Bowl. I think the future of the league looks better with Louisville and without Maryland. Check that .. I don’t think that, I know that.
Related: Florida State Leads ACC in Revenue Generated — InsideTheACC.com