Monday, May 18, 2020

Cincinnati Eliminates Mens Soccer

Last month, ESPN reported that the University of Cincinnati announced that it was eliminating the men's soccer athletic program.  Recently, I analyzed Old Dominion's decision to eliminate wrestling and Bowling Green State's decision to eliminate baseball.  In each case I concluded that it would reduce athletic department deficits and help the university with Title IX compliance.

Note:  I am not including tuition revenue of the student-athletes as revenue to the men's soccer program as I contend that tuition revenue is revenue generated by the academic units, not the athletic unit.  As you may guess, economists are not unified on this.  Go figure!!

My takeaway:  dropping men's soccer 1.) reduces the athletic department's fiscal year deficit, but 2.) does not meet the Title IX "prong 1" test, though it helps a little.

Here are the athletic department financial numbers for the men's soccer program for the 2016/17 to 2018/19 fiscal years.  (Athletic Department financial numbers were acquired via public records requests).

First before I present the financial results, I want to note that the majority of the men's soccer program total operating revenues come from a line called Direct Institutional Support (i.e. a subsidy or transfer from the university to the men's soccer program).  These direct subsidies represent 86.53% in 2016/17 fiscal year; 91.4% in 2017/18; and 95.26% in fiscal year 2018/19 of the men's soccer total operating revenues.  Thus I am going to present the financial results with the Direct Institutional Support first, and then without the Direct Institutional Support for comparison purposes.

First, here are the financial figures for the men's soccer program including Direct Institutional Support (DIS):

Cincinnati FY Total Op. Total Op. Surplus/ Participants


Revenue Expenses Deficit
M-Soccer 2017 $154,203 $853,324 -$699,121 26
M-Soccer 2018 $137,106 $839,967 -$702,861 25
M-Soccer 2019 $181,247 $907,745 -$726,498 29

As you can see, men's soccer generates about a $700K accounting deficit just using the total operating revenue and total operating expenses that the athletic department supplies to the NCAA.

Yet, as I have mentioned before, scholarship expenses are not really an economic cost to the athletic department, and as such, I present the impact of excluding scholarship expenses from total operating expenses.

Cincinnati FY Surplus/ Scholarship Surplus/Deficit


Deficit Expenses w/o Student Aid
M-Soccer 2017 -$699,121 $383,811 -$315,310
M-Soccer 2018 -$702,861 $383,342 -$319,519
M-Soccer 2019 -$726,498 $404,289 -$322,209

The last column reports that excluding the scholarship expenses, the men's soccer program still results in about $320K deficit.  Yet, as I mentioned above over 85% of the total operating revenues comes from direct institutional support of the men's soccer program.  This is an internal transfer from one unit of the university to the athletic department's men's soccer program.  If we exclude Direct Institutional Support (as it is also not revenue that is generated by the athletic program), how does that change the financial impact that men's soccer has on the athletic department's finances?

Cincinnati FY Total Op. DIS Total Op. Total Op. Surplus/Deficit Scholarship Surplus/Deficit


Revenue
Revenue Expenses w/o DIS Expenses w/o StudentAid




w/0 DIS


w/o DIS
M-Soccer 2017 $154,203 $133,425 $20,778 $853,324 -$832,546 $383,811 -$448,735
M-Soccer 2018 $137,106 $125,311 $11,795 $839,967 -$828,172 $383,342 -$444,830
M-Soccer 2019 $181,247 $172,654 $8,593 $907,745 -$899,152 $404,289 -$494,863

Thus, excluding Direct Institutional Support as operating revenues and scholarship expenses as operating expenses, we see that over the last three fiscal years, the men's soccer program has resulted in a deficit of between $450K to $500K.

Therefore, eliminating the men's soccer program is reducing the financial impact on the athletic department.

Now turning to the issue of Title IX, here is how the athletic department has fared over the last three fiscal years.  Using the EADA data, I looked up for each fiscal year the following:
Full-time Equivalent Male Counts and Female Counts; and Male student aid and Female Student Aid.

I calculate the following (in terms of percentages):

Name FY Male% Female% Male-Aid% Female-Aid% Difference
Cincinnati 2017 52.78% 47.22% 60.35% 39.65% 7.58%
Cincinnati 2018 52.89% 47.11% 57.48% 42.52% 4.59%
Cincinnati 2019 52.77% 47.23% 60.14% 39.86% 7.37%

Thus male student athlete aid is between 4.6% to 7.6% higher than the proportion of full time equivalent males in the student body.  This is higher than the accepted difference from just "prong 1" of the Title IX test, but Cincinnati may be in compliance given they are reducing the men's soccer program as moving towards a proportional rate as compared to the student body male-female percentages.