Virginia Tech and Clemson are great football rivals. The start time for their game in late October is still listed as “to be determined,” with the determining factor being what time slot on the television schedule will be most desirable for their gridiron encounter in “Death Valley,” the nickname for Clemson’s raucous home field.
We’ll find out then how evenly matched these teams are on the field, but we know that Clemson has an advantage in one key part of their upcoming matchup: its bank account.
A decade ago, these two schools were evenly matched in their sports revenue. In 2015, Clemson’s athletic revenues — across all its sports — exceeded Virginia Tech’s by $3.3 million, a rather small difference in an era when Tech was bringing in $80.23 million.
Since then, Virginia Tech’s sports revenue has more than doubled and last year it took in $161.22 million, but Clemson’s grew faster — the Tigers are now driving $198.58 million in revenue. That $3.3 million edge a decade ago has turned into a $37.36 million advantage. A decade ago, the difference in revenues might not have meant that much on the field. Today, it does, because today’s players are paid. The fig leaf of amateurism has fallen away and college sports, particularly football, is now a professionalized venture.
College sports have always relied on donations because media rights don’t cover all the expenses. With those expenses now rising, colleges have been forced to turn to other sources of revenue. That often means turning more to donors (especially deep-pocket ones), as well as the institutions themselves — and, in some cases, requiring students to pay for the professionalized sports teams that their schools field.
The Knight Commission on Intercollegiate Athletics and the Newhouse School of Public Communications at Syracuse have teamed up to host the Knight-Newhouse College Athletics Database, which tracks the finances of college athletics. (Ironically, Syracuse is a private school and therefore doesn’t disclose its data.) The database recently was updated with information for 2025. This update comes against the backdrop of two important developments, one in Washington, one in Richmond.
In Washington, the U.S. Senate is taking up a controversial bill called the Protect College Sports Act — Sens. Ted Cruz, R-Texas, and Maria Cantwell, D-Wash., are the sponsors — that attempts to hold down the rising costs of college sports. Not surprisingly, this has generated pushback from those who identify with the main beneficiary of those rising costs — the players. Meanwhile, in Richmond, the state budget adopted this summer contains a provision (pushed by state Sen. Creigh Deeds, D-Charlottesville) that calls for a state study of the economics of college athletics. At some point, whoever does that study will probably turn to the Knight-Newhouse database. What they’ll find are details on some of the forces that are driving the Cruz-Cantwell legislation.
TV deals are driving the wealth gap in college sports — but so are donors
Once there were five conferences that were considered the elite in college sports. Now there are just four and there’s a growing gap between even these so-called Power 4 conferences. We can see that broadly in these figures. In the Big Ten, about 40% of the aggregate revenue at member schools comes from media deals. For other leagues, TV contracts, which are lucrative, aren’t lucrative enough. In the other three Power 4 conferences — the Atlantic Coast Conference (in which Virginia and Virginia Tech play), the Big 12 and the Southeastern Conference — media rights account for 28% to 29% of the revenue.
As the rich get richer, other schools must scramble if they want to keep up (and they do). Let’s go back to our first comparison, between Virginia Tech and Clemson. Why are their revenue pictures so different these days? They still get roughly the same amount of broadcast money since they’re in the same conference; any variation is based on how well their teams are doing — a better record makes for better ratings. The Knight-Newhouse database points us to the real reason Clemson is pulling away: its donors.
A decade ago, the gap in sports revenue between Virginia Tech and Clemson could be attributed almost entirely to fundraising: Tech raised $16.75 million, Clemson raised $19.97 million, a modest gap of $3.22 million. Since then, Virginia Tech has dramatically increased its fundraising to support its sports programs — donations are up 131.5%. But Clemson has ramped up its fundraising even more — donations there are up 181.3%. That’s why Clemson’s $3.2 million fundraising advantage over Tech 10 years ago has now turned into a $17.41 million advantage.
We see this over and over in the data — a growing disparity in donations. Maybe that’s not a cause for government invention. Life is unfair in lots of ways. This is simply the free market at work. If Clemson fans want to give more money, that’s their right. However, the growing financial gap between schools will inevitably create inequities in competition, which could drive more realignments in who plays who. If you’re Virginia Tech, you may be trying to keep up with Clemson, but if you’re Clemson you’re trying to keep up with even richer schools — one reason why Clemson might like to bolt the ACC for a better-paying conference if it can.
Here’s another example of these fundraising gaps: In 2015, sports boosters gave the University of Virginia $27.76 million. Of the nine schools in today’s Atlantic Coast Conference that disclose their financial data for athletics, Virginia’s haul was bigger than any of them — with the exception of the University of Louisville, which had just joined. Louisville fans gave $29.17 million.
Ten years later, sports giving to Virginia has increased, but not nearly as much as at other schools. Today, Virginia (and Louisville) rank near the bottom of the ACC in terms of donated dollars.
A decade ago, Virginia fans and Florida State fans were about equally generous, with Virginia outraising Florida State by a few million. Today, the gap has widened, with Florida State raising $21 million more than Virginia does.
In 2015, the gap between the most affluent school in the ACC (Florida State, which has the most revenue) and the least affluent (North Carolina State, at least among the public schools that have to disclose this data) was 33.8%. Today it’s about 50%.
Florida State, like Clemson, would also like to move to a conference that produces even more TV money.
Every school naturally wants more money for its donors but some are relying more heavily than others.
A decade ago, the University of Texas relied on donors for 24% of its athletic budget; today the Longhorns rely on donors for 49% of their funding. On the one hand, maybe all that’s a good thing. If well-heeled Texas business titans want to pay for sports at their favorite school, let them. On the other hand, even with all that increased revenue, University of Texas sports still lost money. If Texas can’t at least break even on college sports, maybe it is time to take a look at the whole economic structure of intercollegiate sports.
Some schools are also using their own funds to pay for college sports
Here’s where the economics of college sports do become a public policy concern. Some schools manage to run profitable programs even with no “institutional support” or mandatory student fees. Others can’t, or at least don’t. The review of the Knight-Newhouse database shows how some schools are increasing institutional support. In Virginia that doesn’t include mandatory student fees, which are a separate category, but we can’t guarantee that other states do their accounting the same way. That’s why I prefer to combine the two — so we can make a fairer comparison.
Ten years ago, Virginia Tech recorded only $100,000 in “institutional support” for college sports. Now it’s $8.43 million, and that doesn’t include mandatory student fees, which draw $15.66 million from students. Add those together and, in percentage terms, that’s 15% of Tech’s athletic budget that comes from institutional support and student fees.
In general, the more affluent the school, the less it has to do that. Ohio State, Penn State, Purdue and others claim they spend no money on college sports and take no money from students. (It’s also notable that those schools are in the Big Ten, with its big TV contract.) Virginia Tech’s 15% for those two categories is about even with the ACC average. Some schools rely a lot more on students or their own coffers; these are generally less-heralded programs that are trying to compete at a higher level than they once did. The University of Cincinnati gets 44% of its athletic funds from either the institution or fees; the University of Houston 45%. Here’s the public policy question, either writ large nationally or focused just on Virginia: Is this how we want our colleges to spend their money? A corollary: If students are taking out loans to go to school, then some of that loan is going to pay for college sports. Do we really want students going into debt when some part of that debt is going to support a professionalized sports program?
The schools in the most difficult position are the mid-majors
Sometimes when someone is having a mild problem, we jokingly say “that’s a First World problem,” meaning people in Third World countries would be envious to have that problem. By the same token, if Clemson and Florida State want out of the ACC to make money elsewhere, that’s a Power 4 problem.
The real economic challenge of intercollegiate athletics comes at the schools in lesser conferences, often called “mid-majors.” In many cases, these are schools without big TV contracts and without lots of big donors, so the only (or at least easiest) way to fund their programs is to make their students pay. That seemed a lot more justifiable in an era of amateurism, less so in an era when those fellow students on the gridiron are making more money than the professors. It’s one thing if some of a student’s bill goes to pay for the new chemistry professor; what about if some of it is going for the new wide receiver?
We have two examples here in Virginia: James Madison University and Old Dominion University, both in the Sun Belt Conference. Where ACC students get about 28% of their revenue from broadcast rights, Sun Belt schools get only about 7% from TV deals. Both schools also have relatively low levels of donations. Instead, both rely on student fees. At ODU, 58% of the athletic revenue comes from student fees (and a piddling 1% from institutional support). At JMU, 74% of the athletic revenue comes from student fees and 3% from institutional support.
It’s fashionable these days to bash billionaires. This, though, is what happens when colleges try to run a professionalized sports program without a billionaire owner. In effect, in college sports, donors are being asked to make up for the lack of a billionaire owner, and sometimes students aren’t being asked at all. They’re just given a bill.
We’ll have more political news (and one piece of sports-related political news) in this week’s West of the Capital, our weekly political newsletter that goes out every Friday afternoon.
