The University of Alabama-Birmingham drew national attention — and a great deal of anger locally — last fall when it announced it was dropping its football program due to cost concerns. A new report released this week, however, questions that decision, asserting that the sport did make money for the university and would continue to increase in value.
The school cited the growing cost of attendance, bolstered by the NCAA’s revised regulations related to student scholarships and benefits, in their decision to end the program. The rifle and bowling programs were also eliminated.
“We find that the three sports in question did not cost the university anywhere near the $3.75 million indicated on UAB’s accounting statements,” wrote Dan Rascher and Andy Schwarz, partners of the independent consulting firm OSKR. “Instead, after making the sort of adjustments suggested by the economics literature, we conclude that the three sports were effectively break-even to slightly positive. Football and bowling showed a modest positive return for 2013-14, the last year for which complete data was available. Rifle showed a deficit, but the three-sport balance was positive to the tune of $75,000.”
The firm was originally hired in March to prepare a report for UAB athletics, but the contract was canceled a week later. The firm continued its study anyway, releasing a full 156-page report on Thursday.
The two consultants, Rascher and Schwarz, have previously challenged the NCAA’s accounting methods. They used an alternative method to conclude that UAB was overstating expenses and understating revenues. The report stated that athletic scholarships cost the university 65 percent less than reported, and that the media revenues generated as a Conference USA partner produce greater return than an affiliation with a non-football conference.
"We conclude that going forward, anticipated improvement in ticket sales from 2013-14 levels and new College Football Playoff revenues will outpace new expenses from Cost of Attendance stipends and unlimited food allowances," they wrote. "Once these new revenues and expenses kick in, we anticipate the aggregate annual surplus from football, bowling, and rifle would exceed $500,000, even without including the anticipated but hard-to-quantify benefits to admissions and enrollment, donations, and media exposure."
