March 26, 2017

College Baseball Economics

July 18, 2012 by · 3 Comments 

During August-September of 2012, a New York company named Springer will publish College Sports Inc.: How Commercialism Influences Intercollegiate Athletics. Produced and distributed as a ‘SpringerBrief,’ the book contains seven chapters and includes a Foreword and Acknowledgements, and an Appendix, Bibliography, and Index. Besides the Introduction in Chapter 1 and Conclusion in Chapter 7, the other chapters have contents that focus on Intercollegiate Athletics, Sports Finance, Department of Athletics, Student Athletes Environment, and Sports Events and Facilities. In addition, tables with business, economic, and sports-specific data reveal periods and types of athletic programs in schools of higher education.[1]

Regarding baseball, College Sports Inc. shows how financial support from local, regional, and national businesses and such groups as corporate foundations, cultural and social enterprises, and alumni make a difference in the quality and quantity of schools’ baseball programs as a member of Division I, II or III of the National Collegiate Athletic Association (NCAA). Furthermore, it examines cost and revenue streams of these programs and denotes why trends in commercialization will continue to change and impact the operation, popularity, and future of college/university sports. The following is an overview of topics, primarily in baseball, as discussed in Chapters 2-6 of the book.

Intercollegiate Athletics. During the spring 2012 college/university sports season, 927 schools in NCAA Division I, II, and III sponsored programs in baseball. In fact, there were 294 teams in Division I, 263 in Division II, and 370 in Division III. Historically, the number of schools that sponsored baseball increased from 607 in 1971 to 642 in 1981, and then to 692 in 1991 and 859 in 2001. Based on data from the NCAA for 1981 and 2012, the number of schools with baseball expanded by 45 or 18 percent in Division I, 109 or 71 percent in Division II, and 127 or 52 percent in Division III. Consequently, baseball became more popular on college campuses since the early 1980s but so did other spring sports such as men’s golf and outdoor track and field, and women’s softball and tennis.

In different ways, businesses and other organizations in communities have contributed to intercollegiate athletics including college/university baseball programs. Such groups as alumni, boosters, and private enterprises donated money and resources to schools, in part, for them to build sports stadiums, recruit ballplayers, and hire baseball coaches. Furthermore, regional radio stations and national television channels, especially the Entertainment Sports Programming Network (ESPN), broadcast some baseball games and tournaments of schools on weekends. In short, there was support from various entities for baseball events played by competitive athletes of college/university teams across America.

Sports Finance.  The NCAA reported that a typical baseball program in Fiscal Year 2010 generated median revenue of $338,000 in Division I-A and $71,000 in Division I-AA. Although baseball ranked fourth in revenue among the former group of schools, its median amount exceeded each woman team sport. In other words, football games and then those in men’s basketball, ice hockey, and lacrosse provided more money from ticket sales, their conferences, and other outside sources than did baseball.

In amount of net revenue, which is generated revenue less expenses, baseball teams in Division I-A had the highest median loss among men sports at ($605,000), second highest in Division I-AA at ($137,000), and fifth highest in Division II at ($7,000). As a result, schools had to subsidize their baseball programs although football in Division I-A and men’s ice hockey and lacrosse, and women’s crew, ice hockey, and volleyball in Division II each had net revenue greater than $0.

This data indicates that athletic departments need resources and thousands of dollars from their school in order to operate their baseball programs each Academic Year. Because of relatively large differences in amounts of revenue and expenses for the sport, baseball coaches and their teams should participate in local fundraising campaigns while schools’ media relations publish news about ballplayers, games, and tournaments. Other than universities with successful programs as California State Fullerton, South Carolina and Texas, baseball teams do not generate enough revenue to be financially independent.

Department of Athletics. Besides information about college/university athletic directors and their departments, College Sports Inc. includes tables that list the median amounts of compensation of men and women who coached team sports in NCAA Division I, II, and III for various Fiscal Years. In baseball, for example, the median amounts of coaches’ total compensation (salaries and benefits) were $361,000 in Division I-AA, $149,000 in Division I-AA, $62,000 in Division II, and $51,000 in Division III. For the median amounts paid to only head baseball coaches, these were $189,000 in Division I-AA, $83,000 in Division I-AA, $46,000 in Division II, and $36,000 in Division III.

In comparison to what coaches earned in other team sports across these NCAA divisions, baseball coaches had lower median salaries and benefits than those in football, men’s basketball and ice hockey, and women’s basketball. Interestingly, women who coached ice hockey in schools of Division I-AA, II, and III also received more compensation than did baseball coaches. Because baseball provides little, if any, revenue as a sports program at most schools, its coaches earn salaries and benefits that reflect their economic value to their respective athletic department and institution.

Student Athletes Environment. After football, baseball uses the largest number of student athletes (SAs) who play team sports in colleges/universities. Between 1990 and 2010, the number of SAs in baseball increased by 11 percent in Division I, 98 percent in Division II, and 75 percent in Division III. These percentage growths in the participation of SAs occurred because schools expanded their athletic departments and added baseball programs during the 1990s and 2000s. In addition, the sport became more popular among high school athletes who chose to play it. As a result, some of them accepted baseball scholarships and/or financial aid from colleges and universities.

According to NCAA data on SAs’ race for the spring season of 2011, more than 80 percent of baseball players in each division were white. The remaining portion of SAs who performed on college/university teams in the sport were Hispanic and then black, Asian, and such different races as American Indian/Alaskan Native, Native Hawaiian/Pacific Islander, two or more races, and nonresident alien. Since American schools recruit few baseball players from other nations and black athletes excel in high school football and basketball, white SAs dominate the sport as pitchers, catchers, infielders, and outfielders.

Although 25 to 30 percent of Major League Baseball (MLB) players are Hispanic (Latinos) and natives of Central and South American countries, less than 10 percent of all big leaguers are African Americans. In college sports, however, many Hispanic male and female SAs perform on cross county, soccer, and track teams while Asians participate in those sports and golf, swimming, and tennis. Given these distributions by division and race, the most talented SAs in college baseball must deal with the challenges of commercialization when they sign contracts with MLB clubs and become professionals.

Sports Events and Facilities. Organized by prominent baseball coaches during the late 1940s, the College World Series (CWS) is a popular, lucrative, and successful amateur baseball tournament currently held in Nebraska’s largest city. Formed in 1967, a nonprofit organization named CWS of Omaha Inc. operates the event by scheduling and promoting games in a stadium each June between baseball teams of schools that had won a super regional playoff. According to economic studies, the annual CWS attracts thousands of tourists and other visitors, creates hundreds of jobs, and generates millions in business and consumer expenditures. Indeed, it increases investments, spending, and the economy of the Omaha Metropolitan Area.

Despite expensive payments for labor and other resources, athletic departments of colleges/universities expect to provide optimal facilities for games of their sports teams. This strategy includes the construction and/or renovation of ballparks on or adjacent to their campuses. To finance and then operate its ballpark, a school might issue bonds and other types of debt securities, campaign for money from individuals, businesses, and other organizations in their community, and/or request donations from local public enterprises. According to athletic directors and coaches, a modern ballpark with amenities is a way for schools to recruit high school ballplayers with the potential to play for a team in the American or National League.



1. For the website and other information about the publication of College Sports Inc., see http://www.springer.com/economics/labor/book/978-1-614-4968-3.

Frank P. Jozsa Jr. was a professor of economics and business administration at Pfeiffer University from 1991 to 2007. He is the author of ten books on professional team sports. 

Comments

3 Responses to “College Baseball Economics”
  1. Al Flowers says:

    I would like to see an update to this article as I noticed an increasing larger attendance at college baseball programs – especially the SEC teams and some BIG 12 teams like Texas.

  2. Al Figone says:

    College baseball including the junior colleges presents a high level of baseball competition, expert coaching, and is relatively inexpensive in comparison to the professionals.

  3. Steve says:

    In conclusion , baseball programs eat up the most subsidies to keep their programs afloat. Except for women’s basketball which is only around to counter balance the money pouring into men’s basketball.

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