For the past two weekends and even the days in between, throngs of people across the country have dusted off and squeezed into their old college sweatshirts to root on their alma mater in the NCAA Basketball Tournament.
But according to the New York Fed's Quarterly Report on Household Debt and Credit, those alums are deeper in student loan debt than ever, as total student loan debt in the U.S. stood at $966 billion at the end of 2012, up 10.5 percent from $874 billion in 2011.
March Madness is one of the biggest phenomenons in all of sports, drawing nearly 43 million viewers to its championship game in 2012 and generating $705 million in television rights fees for the National Collegiate Athletic Association.
It seems fair to assume that the annual tournament would be a financial windfall for its participants. Not so, says Scott Minto, director of the master’s degree program in sports business administration at San Diego State University. “Everything about it is big: the money, the publicity, the media, the glamor of the event – it creates a certain perception,"Minto told Bloomberg News. "It's not exactly the payday that fans think it is.”
Universities generate revenue for its athletic prograns from a variety of sources, including from ticket and merchandising sales to television contracts. But those sources fall far short of expenses, forcing schools to lean heavily on other revenue streams. According to a Knight Commission report on the economics of college sports, virtually all athletics programs receive some form of subsidy.
Those subsidies often draw on student fees, mandatory payments on top of annual tuition, and those fees are soaring. According to a report from the American Institutes for Research, athletic subsidies per-athlete with top-tier football teams spiked 61 percent from 2005 to 2010, just as per-student academic spending rose just 23 percent.
Time magazine reported that Ohio University professor B. David Ridpath conducted a survey of 4,000 students at Mid-American Conference schools and found that 40 percent had no idea their fees funded sports. Many were outraged. Click here for their responses.
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