You Agreed to What? Implications of Past Agreements Between Donors and Athletic Support Groups

Todd Koesters
Matthew T. Brown
and John Grady

There is very little argument today that college athletics as a whole is big business, with the NCAA generating almost $1 billion annually in revenues (Alesia, 2014). More than 80% of this revenue is generated by the men’s championship basketball tournament alone. NCAA Division I-FBS football, which operates under its new playoff system utilizing the current bowl system, generates even more money for the “Power 5” conferences. As a result, the 15 highest grossing athletic departments combined to generate revenues in excess of $1 billion (Morgan, n.d.). These revenues have led to a dramatic rise in new construction projects on college campuses with regard to athletic facilities. According to Street & Smith’s SportsBusiness Journal,$738 million was allocated for college stadium construction projects that were either completed, approved, or under construction in 2014 (“2014 by the numbers,” 2014). As revenues have risen, so too has the intense competition at the highest levels for each university to grab its portion of new wealth. Not only has there been an increase in building and refurbishing athletic facilities (the so called “arms race”) as seen above, but in recent years there has also been “realignment among athletic conferences….; a bidding war for prominent coaches; and escalating expenses across the board” (Knight Commission, 2010, p. 3). As a result of these changes in operating costs, athletic departments are constantly seeking new ways to generate revenues.