Ann Marie Adams writes for the Martin Center about student subsidies of college sports in Kentucky.
The specific problem is that successful revenue-producing sports programs are categorized differently from non-successful sports programs. When NCAA athletic programs are highly profitable, as they are at the University of Kentucky and the University of Louisville, they are classified as auxiliary and expected to break even or generate significant revenue. In such situations, the public can clearly tally costs as well as gains and determine what the programs do (or do not) give back to their host institutions.
When they are not profitable, though, they are classified as non-auxiliary, and hence listed as a general expense to be paid out of operational funds. In Kentucky’s regional public colleges, spending on athletics is mixed in with funds intended for academics. Kentucky’s new performance funding model shows how this spending obfuscation happens. …
… Kentucky’s regional universities, like the other 90 percent of schools in NCAA Division I that fail to turn a profit, designate their athletic programs as non-auxiliary. This makes their deficits factor positively into performance funding calculations as money spent on the direct cost of educating students. Money-losing athletic programs are made to look like a benefit for students.
Letting sports deficits blend in with teaching and research expenses hides just how much an athletics program costs and how much, if anything, it brings in.