Why Alabama College Athletic Teams Gain High Revenue
There are 61 colleges and universities in the state of Alabama and hundreds of college athletic games are being playing each year. According to CBS, Alabama athletic revenues totals $143 million a year, more than any NHL teams’ in 2014. It also exceeded 25 of the 30 NBA teams. Who is the biggest winner in Alabama and why?
Any college athletic team needs to make money from tickets sales, playing in away games, donations, and media rights as well as other sources. On the other hand, they spend money on recruiting, tuition, travel, coaches’ salary and so on. Alabama obtained $143.8 million in total athletic revenue in 2013. This revenue was due to ticket sales, donor contributions, and NCAA/SEC payouts. Specifically, "the Crimson Tide football team accounted for 93 percent of the athletics department’s ticket revenue and 55 percent of its contribution dollars." The University of Alabama also sells out its 100,000-seat-plus football stadium several times a year, sells many basketball, and other tickets. Meanwhile, the University of Alabama athletics department reached a $21.2 million surplus for its 2013 fiscal year, being Alabama’s second-largest surplus.
Table 1 shows that University of Alabama and Auburn University have greater revenue from 2011 to 2015, six times much as those of Samford University and The University of South Alabama. In addition all of the following universities have increasing revenues over the years, except Alabama State that decreased it after 2013.
Table 1 Revenues of Major Alabama Colleges
There are several reasons to explain why this is like this. First, because there are no professional sports team in Alabama, sports fans like to support collegiate Alabama athletic teams, compared to supporting out of state teams. People in the community of the major universities find themselves having a passion for their university's athletic programs, and they share similar values and cultures with other fans. Those loyal fans buy seasonal tickets no matter what.
Second, with the rapid development of social media, residents gain news and repost them on Facebook, Twitter, and Instagram. When people post relevant news about games and updates, his or her friends will learn about it. As a result, news spreads faster than before, and an increasing number of people attend college athletics games.
Last but not the least, the launch of the SEC Network and the influx of new broadcasting, radio, and digital rights fees is another driver of the revenue. As the teams win, especially football programs, more and more fans will follow the news of those team and their social media.
Overall, Alabama college athletics departments have relatively higher revenues than other states, mainly due to the fact Alabama has no professional sports team, team identity is strong among Alabama college communities, and the spread of information via social media.
Written by Jiuhao Wang
General Editor: Macy Marin
Sports Business Research Network