University of Arizona athletic department fails to profit for first time since 2005

According to the latest NCAA financials compiled and released by USA Today, 2016 was the first year since 2005 in which the University of Arizona athletic department failed to turn a profit.

Arizona Athletics brought in $85,356,236 — which ranked 39th among public schools in the country — but had expenses of $87,254,614.

Among Pac-12 schools, Arizona finished behind Oregon (23), Washington (25), UCLA (29), and Arizona State (35). USC and Stanford, both private schools, do not have to disclose their financial statements.

Assuming USC and Stanford’s revenues are greater than Arizona’s, this puts the Wildcats seventh in the Pac-12 in revenue.

In reality, it’s probably only one spot lower than they had hoped or expected to be. With the unique revenue streams accessible to UCLA and Oregon, plus UW sitting in the heart of Seattle, it would take quite the uphill charge to over take those three.

That leaves Arizona State.

From 2009 to 2016, Arizona had brought in more revenue than its rival up north every year. However, the Sun Devils have been on a tear lately.

From 2014 to 2016, ASU has increased its revenue by $20 million — from $74 million to $94 million. Arizona, on the other hand, has gone backward from $99 million to $85 million.

What has ASU done? For one, it has instituted a mandatory student fee for athletics.

That is something Arizona is starting to do in 2017, and it is estimated the fee can bring in upwards of $3.2 million each year.

The UA athletic department evidently needs more money, and with schools across the conference and country pushing student fees, Arizona likely felt if it didn’t join in, it would be left in the dark.

Up until 2017, UA was just one of two public Pac-12 schools that did not have a mandatory student fee for athletics (UW is the other).

There’s also UA’s apparel deal.

ASU also signed a more lucrative apparel deal with Adidas — an eight-year, $33.8 million deal — while Arizona has a 10-year, $23 million contract with Nike.

It’s not all bad, though.

The trend line for Arizona is positive.

Its revenue streams have been increasing steadily and significantly over the past 10 years. From 2006 to 2016, the Wildcats saw a growth of over 100 percent, with a high mark in 2014 of $99 million that was mentioned above.

But their expenses also jumped from $68 million to $95 million that year, presumably because of renovations to Arizona Stadium and McKale Center.

Overall, in the last 12 years, the program has amassed over $20.85M in profit that has given them the flexibility to do renovations or take the occasional down year in stride.

Arizona has some clear limitations, however.

When looking at the national figures, it’s evident that television revenue and football are where the money is — and are also two areas Arizona (and the Pac-12 in general) does not fare well.

Of the top 17 schools in revenue, only two of them (Oklahoma and Texas) are not in the Big Ten or SEC.

The Pac-12 Network is currently valued at $320 million, while the Big Ten Network is valued at $1.142 billion, and the SEC Network is worth a whopping $4.692 billion.

It’s a reason why the lowest-earning SEC public school, Mississippi State, was able to generate more revenue than Arizona in 2015-16 ($94 million vs $85 million).

While it would be easy to say Arizona football needs to become a national powerhouse for UA to improve its financial status, even if that did happen, there would need to be an improved television revenue stream right behind it to put the UA among the nation’s top revenue generators.

— Below you can view the last 11 years of the programs revenues and expenses. —

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