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May 29, 2003

“Revenue-producing” sports actually do

For the first time in years, Pitt can remove the quotation marks from around the words “revenue-producing” when describing its football and men’s basketball programs.

The two teams generated more money than they cost the University during the fiscal year that ended June 30, 2002, according to an in-house study required by the NCAA.

By operating in the black, Pitt’s football and men’s basketball programs fulfilled one of their ostensible missions: helping to subsidize traditionally non-revenue-producing NCAA sports here: baseball, women’s basketball, volleyball, swimming and wrestling, among others.

Even so, Pitt subsidized its intercollegiate athletics program by at least $7.4 million in FY ’02.

That was down from a subsidy of at least $10.5 million the year before, thanks mainly to increased revenue generated by the football team during fall 2002, the Panthers’ first season of playing home games at Heinz Field.

Tallying exactly how much money Pitt’s NCAA athletics program costs the University depends on how you keep score.

According to the report produced by Pitt’s Office of Budget and Controller, the Department of Athletics generated revenues totaling $20.2 million last year. Expenses totaled $27.6 million.

But among the revenue attributed to athletics was a $1.3 million student seating allocation. This money was transferred from the Office of Student Affairs to cover the difference between a full season ticket price and the discounted price paid by students for football and men’s basketball tickets.

This process is consistent with NCAA reporting guidelines. Even so, the $1.33 million came out of Pitt educational and general operating funds, noted Philip K. Wion, an English professor who serves on Pitt’s University Planning and Budgeting Committee (UPBC). Athletics department budget numbers were included in a recent UPBC study of revenues and cost attributions for Pitt units.

“The $1.33 million is not income generated by the athletics department, which is what you might assume when you see it listed as revenue,” Wion said.

In addition, Pitt’s report of athletics department expenses does not include depreciation expenses of $317,090 — an item that previous years’ reports did include.

“If you added in depreciation expenses and subtracted the amount of the student seating allocation, you would find that the athletics department actually cost about $1.64 million more than the [$7.4 million in] expenses attributed to it by the University’s report,” Wion said.

“But the bottom line remains that for the first time in recent memory, neither the football team nor men’s basketball required a significant subsidy from elsewhere in the University, which is good news.”

Wion pointed out that athletics revenues should increase in the attribution report for FY ’03, which will cover the men’s basketball team’s inaugural season of playing home games in the Petersen Events Center.

“The University does take satisfaction in the fact that we are improving in the area of the subsidy to the athletics department,” said Robert Hill, Pitt vice chancellor for Public Affairs. “We’re making progress.”

Hill said Pitt hopes to generate more athletics revenue through continued sell-out houses for men’s basketball games at the Petersen Center, by making women’s basketball a revenue-producing sport (last year, women’s basketball received the highest net subsidy of any Pitt sport, $1,643,135) and through Pitt’s new ticket-pricing plan for home football games at Heinz Field.

“We hope all of those together will help our efforts to produce more revenue and make the athletics department more self-sufficient,” Hill said.

—Bruce Steele

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