Most of us had operated under the notion that successful athletic programs at NCAA schools operate within their means, using money generated from football and basketball to help pay for other sports.

A new study released by the NCAA indicates that this may not be happening.

The NCAA released a study compiling revenue data from 327 of the 330 NCAA Division I teams. This report was unique in that it was the first time that a distinction was made between money generated by the programs and allocated to the programs by the schools themselves.

From CHRONICLE.COM (via SPORTS LAW BLOG):

While athletics expenses had a median growth rate of 23 percent for the top tier of Division I programs between 2004 and 2006, revenues saw a median growth rate of 16 percent. And while the figures varied somewhat, spending on sports also outpaced income from those activities in the lower two categories in Division I, which either are not eligible for bowl games or have no football programs.

As a result, just 17 of the more than 300 athletics programs in all of Division I—about 5 percent—earned a net profit between 2004 and 2006, with ticket sales and private donations accounting for more than half of all revenue.

The article cites increasing competition in non-revenue sports as one of the reasons for the rise in athletic spending:

For example, the median amount of revenue generated by Division I-A men’s track and field teams in 2006 was $33,300, while median expenses were $584,500—17 times higher, according to the NCAA data. For women’s track and field, the median for generated revenue in 2006 was $24,600, compared with median expenses of $761,000—more than 30 times higher.

In addition to the skyrocketing salaries for coaches, [vice provost for academic operations and the faculty athletics representative at the University of Tennessee at Knoxville Todd] Diacon said, the latest trend is to build state-of-the-art facilities for sports that have no chance of recouping the costs of those structures. At the Knoxville campus, that has included construction of a new women’s softball stadium, a new soccer stadium, and an indoor swimming pool.

“Even if we win the NCAA championship in swimming,” Mr. Diacon said, “that’s not going to pay for the pool.” Over the next two years, the athletics department is planning new facilities for golf, volleyball, and indoor track, he said.

A good argument would be that having competitive athletic teams helps increase the profile of the school, which in turn raises the quality of student that school is fielding. Ask George Mason University if they overspent on their recent Final Four run. I doubt anyone there would say they did.