It’s well-known that in terms of accounting entries, many college athletic departments lose money. Some economists have questioned whether the expense and revenue entries are an accurate measure of the costs and benefits associated with athletic departments. One reason given is that athletics may benefit other parts of the school. Even if the athletic departments bleed money, other areas of the school may benefit.
A second argument given is that the revenue and expense entries are convoluted by the accounting conventions used by colleges. If athletic souvenir revenue is entered in the general university revenue account, then the athletic revenue accounts understate the “true” level of revenue. Similarly, it’s not at all clear that the true cost of an athletic scholarship is as high as the posted tuition and room and board rate. If not, then athletic expenses as entered overstate “true” expenses.
In any case, the San Diego Union-Tribune has recently posted a couple of interesting stories about who benefits and who doesn’t benefit from college bowl games. The answers may (or may not) surprise you. Here is one story. Here is the other story.