Munich Personal RePEc Archive

NCAA Athletic Departments: An Empirical Investigation of the Effects of Revenue and Conference Changes

Pincin, Jared and Hoffer, Adam (2013): NCAA Athletic Departments: An Empirical Investigation of the Effects of Revenue and Conference Changes.

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Abstract

The paper uses a panel of athletic department revenue and expenditure data of 227 public colleges and universities to empirically investigate the behavior of NCAA Division I athletic departments over the period 2006 – 2011. Four primary hypotheses were tested: (1) the effect of revenue changes on individual expenditure categories, (2) how individual revenue streams influence total expenditures, (3) whether changes in individual revenue categories change the size of the athletic department’s subsidy, and (4) how total revenue and expenditures change when a school switches conference affiliation. The empirical results show that when a school receives additional athletic revenue, expenditures for coaches can be as high as 10 times more than direct expenditures for athletes. For every one dollar increase in ticket sale revenue, total expenditures can rise by $0.83 and reduce a school’s athletic subsidy by $0.19. Lastly, changing conferences can increase total revenue and total expenditures by millions of dollars.

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