In March of 2012, Forbes Magazine ranked the University of Louisville Men’s Basketball team as the “Most Valuable College Basketball Team.” And, if you’re lucky enough to live within Jefferson County, Kentucky, as I do, then this fact would have been brought to your attention several hundred times. Yes, even though the Wildcats of the University of Kentucky defeated the Cardinals in the Final Four in route the school’s eighth National Championship, the Dirty Birds had the Cats beat on the balance sheet… which counts for… something, I guess. If you read through the article, you’ll see that the Kentucky Men’s Hoops team is number five on the list, which isn’t shabby at all. But does that mean UofL athletics is somehow more profitable? Let’s look at the numbers.
As Forbes points out, the major reason that UofL is bringing in the money is due, in large part to the completion of the KFC YUM Center. The Cards, to be quite honest, play in a basketball palace. But as I have pointed out here and here, that palace has come at a steep, steep cost to the community. As insidelouisville.com points out, the city of Louisville is on the hook for a $9.8 million mortgage payment on the YUM Center that’s do in a few months. And guess what? If YUM continues to not be able to turn a profit, the city will be responsible for that $9.8 million figure annually until 2018 when the bill could reach $20 million. To understand why a state of the art, and absolutely gorgeous facility, is losing money, read my old articles and by all means check out the great reporting at insiderlouisville.com, so far the only outlet that is shedding any light on this civic travesty.
The bottom line is this, the YUM Center has been a huge boon for UofL and huge boondoggle for the city of Louisville, the Commonwealth of Kentucky and the citizens that call those places home. But even as the University of Louisville enjoys record profits from it’s men’s hoops team, how does the rest of the athletic department fare? According to USA Today, between 2006-2011, UofL’s athletic budget revenue was right around $88 million with its expenses approximating $82 million, a nice overall profit of $6 million. But wait! When you look further at the chart, you’ll see that the academic side of UofL, the school itself, is giving the athletic department an average of $10 million per year and there goes the profit. 10% of the Cards athletic budget is flat out being subsidized by the school. While not unusual or out of the ordinary, it’s not exactly what one might expect from the most valuable college hoops team in the country. (UK for the same period averaged about $85 million in revenue with $83 million in expenses, while receiving less than 1% of its budget, less than $900,000 fr0m the school annually).