Maryland ranks 111th among the 120 top-tier college football teams in passing efficiency. Its rushing defense is worse, ranked 114th. But there’s another way in which the Terrapins lag behind their peers: revenue.
While Maryland football brings in more money than it spends, its profit has plunged nearly 50 percent in the past five years, from just more than $3.5 million in fiscal year 2006 to $1.8 million in fiscal 2010. Its profit pales in comparison to the surplus that most of its rivals generate. According to NCAA data, 69 of 120 Football Bowl Subdivision programs — including Maryland — turned a profit in 2009-10. The median profit of those schools was $9.1 million.
That gap, in large part, explains why the University of Maryland’s athletic department is in such financial trouble, facing a $4 million annual deficit that is projected to more than triple by 2017. And it’s a chief reason why university President Wallace D. Loh is weighing a recommendation to drop at least eight of the school’s 27 varsity teams.
“If you want to have a broad-based athletic program, it’s going to be expensive, and you have to figure out how to pay for it,” said John Cheslock, associate professor of higher education at Penn State who has studied the economics of intercollegiate athletics. “It’s easier said than done. How are you going to generate all this [profit]? You need to have fervent fan support for football. And Maryland does not naturally have the level of fervent support that some traditional football powers do. They can have a good year and go up. But it’s hard to sustain.”
Maryland football’s struggles are hardly the only reason why the athletics department can’t pay its bills.
Men’s basketball also isn’t turning the profit it once did, according to the 27-page report of the 17-member commission Loh appointed to look into the department’s finances that was released Monday. Athletic fundraising has dropped 40 percent in four years — from $15.3 million in 2008 to $9.1 million in the fiscal year that ended in June.
But football drives the train in big-time college sports. And that train is off the rails in College Park, prompting the proposal to slash nearly one-third of Maryland’s varsity sports — all three men’s track teams, men’s tennis, men’s and women’s swimming, water polo and acrobatics/tumbling — to help balance the budget.
Assuming Loh endorses the cuts, as well as other proposed cost-saving measures, Maryland athletics could balance its budget by 2015 and begin repaying the $1.2 million it borrowed from the university to pay last year’s bills, according to the report. But that is predicated on the assumption that Maryland football and men’s basketball will become nationally competitive in the next few years.
Asked whether he felt responsible for generating sufficient profit to help pay for the Terps’ “non-revenue” sports, Maryland football Coach Randy Edsall, whose team is 2-8, said: “I don’t feel any added pressure. I am going to get up each and every day and come to work and do the best that I can to help this university achieve the goals that it wants to achieve. And I am responsible for football, and all I want to be able to do is achieve for my kids to be the best they can in the classroom, to be the best that they can on the field and to be the best they can as people.”
The problem in football isn’t simply that game-day attendance is poor — the team averaged 39,168 fans per game at home last year, ninth among 12 in the ACC. Postseason bowl revenue also is drying up.
Byrd Stadium, which was expanded in the 1990s and outfitted with 64 luxury suites as part of a $50.8 million expansion project launched in 2007, has proved a drain on the athletics department. That’s because the money to upgrade the stadium was borrowed on the assumption attendance growth would more than pay for the debt. Instead, attendance has plummeted, and demand for the suites has been nominal.
According to NCAA documents, Maryland spends $6.5 million annually (more than 10 percent of its entire athletic department budget) servicing debt on athletic facilities. (The total debt on athletic facilities is $63.9 million). Of that $6.5 million debt-service payment, football facilities account for roughly $3 million.
If Loh decides to drop the eight teams recommended, Maryland would be following a national trend that is largely counterintuitive. That is: The schools that are making the most money in sports — those that belong to the six major conferences in the FBS — are the ones cutting teams to funnel more money into football.
That’s the model the Southeastern Conference has long followed. By offering far fewer sports than teams in the Pacific-12 or ACC traditionally do, rooted in the tradition that a broad-based offering of 20 or more sports best serves college students, SEC schools devote most of their expenditures to football — the team that drives the revenue train in college sports.
“Maryland is in a really difficult position because it has a model for college sports that is 100 years old, but they’re trying to deal with the economic reality of 2011,” said Welch Suggs, a professor of journalism at Georgia who has written extensively about the values, ethics and economics of college sports. “They’re in a very crowded media market. It’s always going to be challenging to try to support and compete against what the ACC is becoming when you have an Ivy League model [supporting a broad array of varsity sports] for a college program today.”