Duke = Big Spenders

[CameronBornAndBred]

According to this article, Duke has the highest basketball budget in the nation...and almost twice that of the heels. The next closest program is 3 million behind us. Is it money well spent when programs with half the budget have similar positive records?

http://ncaabasketball.fanhouse.com/2...usspor00000002

[Kedsy]

Is it money well spent when programs with half the budget have similar positive records?

Uh, yeah.

[4decadedukie]

Let's please remember one pertinent expense element: scholarship costs. Duke's full undergraduate tuition, fees, room, board and books are appreciably greater than they would be at a publicly support university. Obviously, that element annually represents less than half of the $3M; however, thirteen scholarships at $50K each is still $650K each year.

The Iron Duke's FY-11 contribution/solicitation letter should reach all us in early-July; here's a good reason to donate generously.

[CPDUKEGUY24]

I recall a post a couple months ago regarding our increased expenditures this year. The explanation offered was that the first installment of payments for the new Training Center started this year. This could be another reason why we have a considerably higher budget than other teams, for this year as well as the next few years. I'll try to dig it up from the forums.

Someone with more knowledge on this could probably substantiate this as well.

LETS GO DUKE

[Richard Berg]

As I recall, 2009 also represented the first year after Duke switched to a new accounting system -- specifically, the way they divided "mens' bball" expenses from "general AD" expenses had some major changes.

[DevilHorns]

As I recall, 2009 also represented the first year after Duke switched to a new accounting system -- specifically, the way they divided "mens' bball" expenses from "general AD" expenses had some major changes.

If that's the case, then the comparison measure is faulty. I wonder if the public has access to the numbers (perhaps in a Chronicle article?)?

I'm guessing if the accounting was done correctly, we would be top 5 with a marginal expense lead at best.

[Bluedevil114]

That is only because they do not count how much money is paid to the players at Kentucky and UConn. If you factor those expenses then we would not be so high.

[JimBD]

Yes, it's worth it when you consider that Duke brings in hundreds of millions in donations. The basketball program (and in particular Coach K) generates a hugh amount of positive publicity and goodwill which in my opinion has a significant impact on the total donations received by Duke.

[4decadedukie]

I recall a post a couple months ago regarding our increased expenditures this year. The explanation offered was that the first installment of payments for the new Training Center started this year. This could be another reason why we have a considerably higher budget than other teams, for this year as well as the next few years. I'll try to dig it up from the forums.

Someone with more knowledge on this could probably substantiate this as well.

LETS GO DUKE

You may well be correct (and I would certainly appreciate any further information); however, at the formal dedication and opening of the K Center in February, 2008, I believe the major donors present were told that the costs of construction, equipment, and so forth had already been fully funded through charitable contributions.

[4decadedukie]

That is only because they do not count how much money is paid to the players at Kentucky and UConn. If you factor those expenses then we would not be so high.

GREAT POST - LOL - Thank you.

[4decadedukie]

Yes, it's worth it when you consider that Duke brings in hundreds of millions in donations. The basketball program (and in particular Coach K) generates a hugh amount of positive publicity and goodwill which in my opinion has a significant impact on the total donations received by Duke.

Absolutely correct!

Further, please realize that Duke's overall varsity athletic program operates at a loss, annually requiring augmentation from general University funds. The expenses associated with the many "non-revenue" sports, in aggregate, are large. Obviously, they, too, are worth it, since the character development, leadership skills, and lessons learned by the many undergraduate student-athletes who participate in intercollegiate sports (other than football and basketball) are fundamental to Duke's broad educational mission.

[77devil]

You may well be correct (and I would certainly appreciate any further information); however, at the formal dedication and opening of the K Center in February, 2008, I believe the major donors present were told that the costs of construction, equipment, and so forth had already been fully funded through charitable contributions.

Not to get too much into the weeds, but the facility should be depreciated for accounting purposes regardless of the sources of cash to build it and the expense would be considerable. I suspect there is a great deal of variation between schools in how expenses are allocated between team budgets and the general athletic budget making any comparison suspect at best.

As others have written, the basketball program and Coach K are tremendous ambassadors for the university. The direct and indirect revenue they generate is many times more than the cost. The original posters question should have been stated rhetorically, or not at all, for that matter.

[CameronBornAndBred]

The original posters question should have been stated rhetorically, or not at all, for that matter.

It is a valid question to ask. I didn't give an opinion one way or the other. Everyone so far has given valid arguments for the high budget. This year it's easy to state the worth of the budget, we won the championship, but would you have given the same "Uh, yeah" response the years that we got booted out in the sweet sixteen or earlier? (Maybe our budget was 5 or 6 million less then, I don't know.)
Anyways, to say the question shouldn't be asked is irresponsible, and it's one I'm sure the university has asked itself, and obviously found the justifcation for.

[sagegrouse]

College basketball is a billion-dollar business, counting gate receipts (several million a year each for the top 100 programs), regular season TV and radio fees, and the NCAA tournament payments. The top programs also get revenues from the major equipment companies. I couldn't find a total in a few minutes of web searching, but it has to be well over $1 billion

This is the demand for college basketball.

What about supply? Putting a billion-dollar product on the hoops courts of America costs money. What is wrong with the top college basketball producer spending about 1 percent of total industry revenue on putting a product on the floor?

Seems fine to me.

sagegrouse

[uh_no]

why basketball is good for schools:

davidsons applications for undergraduate admission have skyrocketed since curry was there

does anyone have any doubt more people know who and where butler is than ever before?

I wouldn't have gone to duke if it weren't for basketball...the fact that they had such a program is one of the main reasons i chose duke over schools like penn

when schools put money into basketball, they can draw better recruits, and make the tournament and perhaps win a few games...once your name is on the bracket, millions of people see it, millions of people watch your team play...if you win? you get soooo much free air time...as i pointed out, davidsons apps increased some huge amount....i didn't know about davidson college before stephen curry...i do now...and maybe if i were in high school still i'd consider applying to it....people probably are more aware to of butler now, adnd i would bet that their # of apps go up next year...

bottom line is more apps = you can accept a more competitive pool = better education overall...from something as cheap to the school as sports....I have NO doubt in my mind that duke is able to draw a more competitive applicant pool due to its such high publicity position in the sports world

[4decadedukie]

Perhaps this comment goes somewhat beyond the original intent of this thread. However, if one adopts a longer-term perspective and analyzes the University in some depth, it is clear that Duke has enjoyed truly unprecedented progress since the late-70’s/early-80’s. What has caused this exceptional higher education and research success story – from an outstanding regional university to a top-ten, multifaceted, national research university on only three decades – one that probably is unequalled in the history of American higher education?

I respectfully suggest it is the SYNERGY of these (and, perhaps, some additional) highly significant element:
- Great leadership at the senior executive and trustee level (Keohane, Sanford, McMahon and others come to mind)
- The affluence and generosity alumni and supporters (The $2.36B Campaign for Duke is a splendid example)
- Ever-increasing superiority in facilities, in student selectivity, in professional school breadth and stature, in faculty, in research, and so forth (compare West Campus today with the late-1970s, evaluate current admissions metrics to those of thirty years ago, and/or consider the interdisciplinary excellence of the aggregate University now as opposed to in 1980).
- Highly positive national and international visibility (Basketball and Coach K are a tremendous component of this major element).

[mgtr]

Regarding the subject of increasing costs, I started in 1958 at a school similar to Duke on the west coast (tough to guess, huh?). At that time (and now) it was considered extremely competitive, and I was delighted to get in. Tuition - a total of $1,005 per year. Adjusting for general inflation, that might be about $6,000 in today's dollars. I don't know what the tuition is at "this school" or at Duke, but I am sure it is many times $6,000. And the students they admit? Lets just say I am happy that I got in and got out when I did -- I wouldn't care to compete with today's admits.
However, the cost of providing that kind of education has increased much faster than general inflation. A former president of "this school" estimated that costs there had increased at inflation plus 2%. Doesn't sound like a lot, but the power of compounding explains a lot.
So, university administrators are always anxious to cut costs when possible. Thus, if they choose to spend dollars on a basketball program, it has to be for a good reason. Many have pointed out the reasons that Duke follows that path, and I cannot add to them.

[duke79]

Nice analysis, 4decade, of Duke's rise as a national institution of higher learning over the last 3 decades. I think you are "spot on" with the reasons for Duke's rise in the world of higher education. I think the prominence of the Duke basketball program over that period cannot be overestimated in the school's rise in national awareness. My only complaint is that when I tell people that I went to Duke, almost always the first thing out of their mouth is "Great basketball teams there" and usually NOT "oh yea, that's a great school academically". I think, in some ways, the school's success in b-ball has overshadowed its success in other fields. Off topic slightly, I've often wondered, too, if Coach K would have had the level of success that he has had at Duke, if he had gone to another school to coach in 1982; for example, a DePaul or a Seton Hall or a Butler. As great as coach as I think he is, I still believe part of his success is because of his being at Duke - great academics, beautiful campus, great basketball conference, tremendous financial resources, etc. All of these are attributes that could be duplicated at only a few other colleges in the country.

[Wander]

I believe every single reply has completely missed the point - I'm pretty sure everyone on DBR including the original poster agrees the basketball team does a ton of good for Duke. The question is whether its possible to get the same positive benefits for a lesser cost, given that other schools are nearly as successful at basketball as we are without spending as much (personally, I have no idea).

[CameronBornAndBred]

I believe every single reply has completely missed the point - I'm pretty sure everyone on DBR including the original poster agrees the basketball team does a ton of good for Duke. The question is whether its possible to get the same positive benefits for a lesser cost, given that other schools are nearly as successful at basketball as we are without spending as much (personally, I have no idea).

Clap-clap-clap. That is precisely my question. Like you, I have no idea. But obviously others are doing equally well (or slightly less than equally well) on the court and spending much less. I would love to see Duke take that 3 million that we are spending more than the others on basketball and see it go to the football program. If all of the money spent on basketball has reaped all of the benefits that everyone has so well pointed out, imagine if we had large budgets for BOTH sports. It all boils down to if other elite programs are only spending 10 million on bball and are still that successful, then can't Duke do the same?