Investor report explores credits and risks of college sports

Leslie Zhang

A credit-rating company released a report Friday outlining the advantages and risks of having well-known sports programs in NCAA Division I universities, and said successful programs can often strengthen a university’s public image. 

The report, released by Moody’s Investors Service, shows high-profile sports benefit universities by contributing to a stronger brand and increasing revenue through television contracts — specifically in major athletic conferences.

Corporate communications sophomore Ashley Horton said the brand recognition UT gains from its athletic programs is immeasurable.

“The brand is so established at UT,” Horton said. “If you wear burnt orange or a longhorn, everyone knows what that is. That’s mainly connected to our sports teams.”

Moody’s spokesman David Jacobson said the report suggested a correlation between a sports team’s successes and the number of applicants to a university.

“A successful program may lead to higher enrollment,” Jacobson said. 

The risks associated with high-profile college sports programs could include financial stress and increased media attention in light of scandals.

“The fines the university has to pay can impact its finances,” Jacobson said.

The report, which cited a spring 2013 Indiana University sports journalism study, asserted that more than 90 percent of Division I public universities do not have self-sustaining athletic programs, requiring resources from the university to continue.

While most Division I public schools do not have self-sustaining sports programs, UT’s total revenues surpassed its total expenses in 2012.

Evan Beyer, applied learning and development junior, said UT’s athletic gains should be going to other departments as well as going back into the athletics programs.

“If you put more money to get more money out of it, you have more money to put into other departments as well,” Beyer said.

Austin May, a finance, government and economics sophomore, said he believes the financing of high-profile sports is an issue worth examining, especially because head coach Mack Brown’s annual salary is more than $5.2 million.

“I think that a decently large amount of money should go to athletics, but one person should not be getting paid ten times as much as the highest paid professor here,” May said.

May said he believes academics should always take precedence over athletics.

“It’s a university first,” May said. “We’re a school that has a team, not a team that has a school.”

Jacobson said Moody’s specializes in rating bonds for universities and colleges to determine their credit worthiness, and that UT’s AAA rating is the highest the business offers.