Capital Costs Make Up Significant Share of Total Athletic Expenditures
May 5, 2005
The National Collegiate Athletic Association (NCAA) recently released a report that explores the annual capital costs at NCAA institutions. The report, “The Physical Capital Stock Used in Collegiate Athletics,” serves as a follow-up and supplemental report to a 2003 study, which looked at operating athletic expenditures. That study found that expenditures in the aggregate are a small portion of university budgets for Division I-A institutions. However, the authors of the study noted that to properly capture athletic spending, capital cost data would need to be collected.
Therefore, the 2005 NCAA follow-up study surveyed NCAA institutions regarding their capital cost data. Based on survey responses from 56 institutions, the study concludes that annual capital costs comprise a significant share of total athletic expenditures. The study indicates that there is modest evidence pointing to Division I-A colleges trying to outdo one another by building better and bigger stadiums, typically referred to as the “arm’s race.”
As part of NCAA’s efforts to acquire a more complete picture of physical capital at colleges, NCAA consulted NACUBO to create an annual financial survey. The newly released study was the second piece in strengthening the data findings offered in the 2003 study.
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