Six days from now, 66,000 maroon-and-orange-clad Hokie fans will fill Lane Stadium.
Metallica’s “Enter Sandman” will blare through the speakers, and Frank Beamer, Virginia Tech’s $2 million-a-year head coach, will lead 85 athletes whose scholarships average $30,000 per player per year onto the field.
And as the team runs and tackles its way toward glory, the cash registers will sing a joyous victory song.
College sports are a $300 million a year business in Virginia. During fiscal 2010-11, $40 million of that came from Virginia Tech football.
Hokie football is the envy of the state: turning a $15 million profit on football in 2010-11, according to data reported to the NCAA, with money coming in from tickets, TV revenue, donations and apparel sales. It was the largest profit Tech football had made since at least 2000, when football brought in a $6.5 million profit. The University of Virginia, meanwhile, brought in less than $50,000 in profit for the same season. William and Mary perennially loses money on football. At that school, known more for academics than gridiron prowess, students pay more than $1,000 per person to support the athletic department.
At Tech, it’s not just the legions of Hokie fans who keep an eye on football. The tennis, wrestling and softball programs have a vested interest in how much the Hokies bring in on the gridiron.
The athletic department’s bills aren’t paid on a sport-by-sport basis, said Lisa Rudd, Virginia Tech’s assistant athletic director for financial affairs. All athletic department revenue goes into one pot and is used to cover expenses.
In 2010-11, football made up about 60 percent of the department’s revenue stream, so a full Lane Stadium is good news for the indoor track team.
“I bring in enough football ticket revenue and ACC conference revenue that, between that and the basketball revenue and multimedia revenue, it supports all the sports,” Rudd said.
But not all programs are in the black, and when a team or an athletic department doesn’t reach profitability, it must increasingly rely on student fees and donations.
At Virginia Tech, if football revenue were to fall off, cuts would have to be made. And because of its revenue producing potential, Rudd said football would likely stay off the chopping block. Instead, non-revenue-generating sports such as swimming and diving would have to absorb the cuts.
Amy Perko, executive director for the Knight Commission, a college sports watchdog group, said heavy investment in football and basketball is a nationwide trend. But when these two sports can no longer carry the non-revenue sports, schools make cuts in Olympic sports to bail out the higher profile programs.
“With millions of dollars coming into TV contracts in Division I, the emphasis is placed on winning and the elite athlete more so than providing a broader range of opportunities,” she said. “Unsustainable spending trends have resulted in some teams being cut, so opportunities have been reduced among the schools that have the larger budgets.”
Just look north to the University of Maryland. After sinking about $175 million into stadium projects over the past decade, the Terrapin football and basketball programs saw revenue plummet. In July, Maryland cut seven varsity sports to bring expenses back in line with revenue. Clemson, Rutgers, UCLA and Washington have also dropped sports in the past decade, with swim teams a common casualty.
In Virginia, Tech has put more than $100 million into its athletics facilities over the past 12 years. The school is looking at a debt commitment of about $90 million over 18 years.
And the Hokies aren’t the only team in the state on a spending spree. The University of Virginia added a $130 million basketball arena and expanded its football stadium in the past decade.
BizSense analyzed three Virginia public schools — Virginia Tech, the University of Virginia and William and Mary — as they look to improve their performance on the field and court, often spending more and more to do so. As with any business, the programs run the risk of becoming overloaded with expenses and debt. When that happens, like any business, they have to cut.