Colorado's Athletic Deficit: Structural Management Problem, Not Sanders' Salary

Key Quotes

"According to USA Today, Colorado's athletic department is projecting a $27 million deficit for its current fiscal year. If you add in the $11.9 million that the school's athletic department received from the university in institutional support, and the $2.2 million generated from student fees, Colorado is actually facing a deficit of $41.1 million. The largest deficit in the 135-year history of Colorado's athletic department."

The author highlights the significant financial shortfall facing Colorado's athletic department, noting that the projected $27 million deficit escalates to over $41 million when institutional support and student fees are included. This figure represents the largest deficit in the department's history, underscoring the severity of the financial situation.

"Colorado's athletic department generated an average of $90.3 million in annual revenue over the five years prior to COVID. The pandemic then cratered revenues, but they recovered back to baseline in 2022, before exploding in Deion's first season in 2023. Over the last few years, including this year's projections, Colorado's athletic department has generated an average of $137.8 million in annual revenue. That's a 52% increase, with Colorado's athletic department now bringing in an additional $47.5 million in annual revenue today compared to before Deion Sanders' arrival in Boulder."

The author points out that despite the deficit, Colorado's athletic department revenue has significantly increased since Deion Sanders' arrival, showing a 52% rise. This demonstrates that the core issue is not a lack of income generation but rather an imbalance between revenue and expenditure.

"Instead, the bigger problem is that Colorado's expenses have gotten out of control, and the school can't stop spending money. Colorado's athletic department went from spending an average of $88.9 million annually in the five years leading up to COVID to $163 million this fiscal year alone. So while total athletic department revenue has increased dramatically since Deion's arrival, the school has essentially sent every single dollar that income back out the door."

The author identifies uncontrolled expenses as the primary driver of the deficit, contrasting the average pre-COVID spending with the current fiscal year's expenditure. This quote emphasizes that increased revenue has been matched by an even greater increase in spending, negating any financial gains.

"So, no, it's not Deion Sanders or the football team's fault that Colorado's athletic department is about to post a $27 million loss. The football team generates a $20 million surplus every year, while Colorado's basketball team struggles to break even and has not increased its revenue at all over the past few years. Not to mention, Colorado's women's sports programs spend about $2 for every $1 they generate."

The author argues that Deion Sanders and the football team are not to blame for the deficit, as the football program is profitable. The author highlights that other programs, like basketball and women's sports, are not self-sustaining and contribute to the financial strain.

"In simple terms, someone has to pay for the deficit. The University of Colorado can say that the money isn't coming from students or the research department. But where else would it be coming from? Money is fungible. If Colorado keeps covering the athletic department's losses, that money is not being spent elsewhere on education. And this money compounds over time. If Colorado continues to send between $10 million to $25 million to the athletic department each year, that's potentially hundreds of millions of dollars being taken away from students over a 10-year period."

The author explains the indirect impact of the athletic deficit on students, even if direct funding is denied. The author uses the concept of fungible money to illustrate that covering athletic losses diverts resources that could otherwise be allocated to education, potentially costing students hundreds of millions over a decade.

"But at some point, Colorado has to accept that this isn't a Deion Sanders problem. It's a structural problem. The school is generating more money than ever, yet somehow bleeding cash faster than it comes in. That's a management issue. And unless Colorado is willing to make difficult spending decisions, streamline its operations, and build a model that withstands the financial realities of modern college football, the deficits will only grow."

The author concludes that the issue is systemic rather than individual, characterizing it as a structural and management problem. The author stresses that without significant changes in spending, operational efficiency, and financial modeling, the deficits are likely to persist and worsen.