Question

What are the general differences between revenues at a Division I program and a Division III program?

Answer 1

What is NCAA?

• The NCAA is the National Collegiate Athletic Association. It's the major governing body for intercollegiate athletics. More than 1200 colleges and universities are members of the NCAA. It's a "non-profit" organization that brings in roughly one billion dollars in revenue each year.
• Division I offers the highest level of competition and Division I schools' athletic departments have the biggest budgets.
• Division III is the lowest level of competition in the NCAA, and Division III schools also tend to have the smallest athletic department budgets

Division I:

• Division I schools have the biggest student bodies, the largest athletic budgets, and the most athletic scholarships. More than 350 schools that field more than 6,000 teams providing opportunities to more than 170,000 student-athletes are members of NCAA Division I.
• All of the major sports conferences, including the SEC, Big 10, Pac 12, and ACC are composed of Division I schools.
• The 20 Division I FBS programs whose revenues exceeded their expenses reported median net revenue of $8.45 million. Those schools represent 16 percent of FBS.
• Football Championship Subdivision schools did not follow the trend in FBS. With their generated revenue increases outpacing the jump in expenses. Generated revenues have jumped by 10.1 percent since 2012, while expenses increased by only 8 percent over the same timeframe.
• Median total expenses at institutions in the five highest-resource FBS conferences (ACC, Big Ten, Big 12, Pac-12 and SEC) was $81.7 million. The median at FBS schools outside those five conferences was $28.8 million.
• Schools in the five highest-resource conferences rely on generated revenue much more heavily than their other FBS counterparts. Of $83.6 million in median total revenues at the highest-resource schools, 89 percent ($74.8 million) was generated by the athletic department. At other FBS schools, athletics generated only 40 percent ($11.6 million) of total revenues.
• Since 2004, median generated revenues have increased at all FBS schools by 83.2 percent. At FCS schools, they have jumped 82.5 percent and schools without football have seen revenues climb by 62.5 percent. Over the same decade, expenses at FBS schools have climbed 114.6 percent. They jumped 88.4 percent at FCS schools and 95.5 percent at schools without football. In each instance, the increase in expenses has outpaced the growth of generated revenue, a gap that has accelerated with time.

Division III:

• Division III is the largest of all of the NCAA divisions. In Division III, there are 444 institutions and more than 170,000 student-athletes.
• A key difference in Division III is that there are no athletic scholarships. However, a majority of the athletes are on some form of academic or need-based aid. Also, there are shorter practice hours and less travel for games in D III.
• In Division III, student-athletes represent 20 percent of the overall student body, yet athletics account for only 4 percent of institutional expenditures.
• Given Division III’s large size – more than 400 institutions – and the diversity of school size within the division, there were large ranges of both revenues and expenses. Total revenues at schools with football ranged from $275,000 to $14.1 million and from $232,000 to $9.6 million at schools without football. The same disparities held true for total expenses, ranging from $785,000 to $14.1 million at football schools and $422,000 to $9.2 million at non-football schools.
• The overall athletic expense per student-athlete at Division III institutions is $7,100.
• Since 2004, the median expense per student-athlete has increased by 80% for football schools (to $6,300) and 114.8% for non-football (to $5,800).

Major differences:

• Generally, the biggest disparities between divisions are in the traditional revenue generating sports of football and men's basketball. While the average attendance of a home football game at an FBS school is over 44,000, the average attendance of a home football game at a Division III school is less than 2,000. Many FBS head coaches receive multi-million dollar salaries. Meanwhile, many Division III head football coaches also have teaching positions at their colleges to supplement their incomes.