Cody Kalinowksi, a senior finance major, attends many UCF football and basketball games by paying hundreds of dollars—$14.32 per credit hour—through a student athletics fee tacked on his tuition.
However, much like Kalinowski, many of the 64,000-plus students who enroll each year don’t know where that $172 per semester goes to and why they're being charged.
“I would assume travel expenses and equipment— among other things. But I don't know for sure what it's going towards,” Kalinowksi said.
These mandatory fees, among the multiple expenses students pay for each semester, are earmarked for sports to help subsidize the costs of athletics aid for student-athletes, game expenses, operation of facilities and salaries for coaches, administration and staff.
They're becoming the standard among the 228 schools in Division I conferences, whose total revenue spiked by $503 million while their spending increased by $550 million in 2015, according to the USA Today’s NCAA Athletics Finance Database.
To cover expenses, student athletic fees are subsidizing athletic departments by using small line items—per credit hour basis—on tuition bills, which can add up to multi-millions at large institutions such as UCF.
Gerald Gurney, assistant professor of adult and higher education at the University of Oklahoma, estimates nearly $4 billion per year is borrowed by students to pay off athletic fees.
“That's uncontrollable and unsustainable,” Gurney said. "Students are often unknowingly having their debt jacked up to pay for intercollegiate athletics, and if you ask them what they're paying for, they often simply don't know, nor do they particularly take advantage of going to the games or pay much attention.”
Many universities go along with the marquee investment because collegiate sports, in large part, is the single-most marketable tool universities have to establish brand identity.
“When a school rises from mediocre to great on the gridiron, applications increase by 18.7 percent,” according to a research study by Forbes Magazine.
“It’s what I call chasing [Doug] Flutie,” Gurney said, in reference to the Boston College quarterback who completed a Hail Mary throw against the University of Miami in 1984 for a game-winning touchdown.
[University] presidents believe that somehow if they can just fund a winner; if they can just play with the big boys in the Power 5; if they can just get a great coach who will turn the program around, suddenly the school will have an increase in donations and [their] notoriety will zoom right to the top 50 of public education.”
Athletic success, such as the University of Central Florida’s rise to the Fiesta Bowl in 2014, puts schools on the map, attracting prospective students to apply at a budding institution with a strong sports resume and name recognition.
The largest university in the country, UCF is the "most considered" university among high school seniors in the southeast and the state of Florida, according to a report by Cappex, an online service that helps students identify compatible colleges to submit applications.
“I think sports are an important part of a college,” Kalinowski said. “I’d assume for a lot of people once they graduate, the main thing linking them to their alma mater is their athletics [program].”
Winning traditions breeds an influx in ticket sales and alumni donations, according to a research study by the National Bureau of Economic Research. It also brings the potential for an increase in other revenue generating sources, including concession sales, merchandise, corporate sponsorships and media rights deals.
Those are the long-term benefits most athletic departments veer for, especially at places that are building an identifiable brand from scratch, particularly in major sports like football or basketball, where the quality of the product holds significant value. It’s why coaching carousels take place each year and facility renovations are constantly proposed.
Last season, UCF hired six new head coaches in men's and women's basketball, men's and women's tennis, baseball and football, and announced a $20 million privately-funded facilities plan to upgrade their athletics village.
The Kenneth G. Dixon Athletics Village will encompass a nutrition center, a 38,000-square-foot expansion to its football operations center, a student-athlete leisure pool/lazy river dubbed “Recovery Cove” and renovations to transform both baseball and football venues with premium seats. None of it will be funded through athletic fees.
"We have a vision of building a top 25 athletic program across the board and being nationally competitive," UCF athletic director Danny White said. "We're playing 100 years of catch-up, and I think we have huge upside and potential, but we need to keep our foot on the accelerator and keep building it."
At the Power Five conferences (Big 10, Big 12, Pac-12, ACC and SEC), that investment isn’t as strenuous on students, with subsidized sources totaling just five percent of their budgets, according to an analysis by ESPN's Outside The Lines.
The luxury of television contracts combine to pay these conferences nearly $1.3 billion per year, via agreements with ESPN, CBS Sports and Fox for rights to broadcast football and men’s basketball games. Conferences split up the money among its member schools. But despite the windfall of television revenue, fewer than two dozen public schools reported a profit in 2015.
Outside of the Power Five, schools like UCF lack a lucrative television contract in their conference and have grown more reliant on student fees.
These Group of Five schools receive half of their operating revenue from subsidy sources like athletic fees. For example, schools in the American Athletic Conference, which UCF is a member of, saw its football revenue plummet by 45 percent ($12.7 million) after losing its automatic qualifier status since the College Football Playoff structure debuted in 2014.
"We're undervalued, I know pretty significantly, [with] the television revenue we get through our conference," White said. "As we continue to build our national brand, I think there's tremendous upside to what we can generate from television revenue."
The AAC signed a six-year, $126 million deal with ESPN that expires in 2020, which UCF shares just $2 million annually. Most schools in the Power 5 make approximately $30 million in television revenue alone.
"Institutional support is needed right now," White said. "I'm proud of the fact that our student fee expense per student is the lowest in the metro consortium — UCF, FIU, FAU [and] USF. We're lower than everyone in that cohort in the state."
During the 2015-16 school year, UCF charged each enrollee $14.32 per credit hour to subsidize athletics, which represented more than a third of its $59 million in operating revenue ($22.5 million). In return, students like Kalinowski receive free entry to every UCF athletic event—a treatment for being the program’s No.1 booster.
“That seems high, but I understand that in order to expand the program it's going to cost money and that money percent has to come from somewhere,” Kalinowski said.
White said he envisions a time when the startup costs of using athletic fees to run UCF Athletics are diminished once the program enters a period of self-sufficiency.
"It's something that we'd love to get to the point where we don't need it anymore," he said. "When we really mature as a department and get to that level, the places that are perennial top 25 athletic departments are self-sustaining ... [and] are actually supporting their university. So, that is definitely a goal of ours."
In the meantime, an increased emphasis on other revenue generating sources that are affected by on-field success, like donations and ticket sales, are the main targets for new income, as described in UCF Athletics’ Rise & Conquer Initiative. But the potential for significant revenue lies in a new television contract that's due for renegotiation within the next three years.
“UCF is trying to expand and become one of those household names in sports that you can expect to be in the running to win the conference every year,” Kalinowski said. “Eventually, [they’ll] move up into a conference that will land them more TV [revenue] and land more profitable sponsors.”
In 2016, UCF ranked third among Division I schools and second in the FBS in total amount drawn in by student athletic fees due to their size of enrollment, with fees climbing by more than 29 percent in price ($11.09 per credit hour) and 80 percent in overall amount ($11.9 million) since 2005.
At that rate, students would spend more than $2,000 over a four-year period to fund the school’s teams.
“We’ve got a number of line items on our budget and our students are humongous supporters of ours,” UCF assistant athletics director Andy Seeley said. “We greatly appreciate what they do for [UCF] Athletics.”
Gurney remains skeptical, believing the unprecedented costs imposed on students exceeds the benefits gained from marketing exposure for universities.
“Students are being played by zealous athletic directors and presidents whose interests are not in being frugal and protecting student debt,” Gurney said.
The average student who graduated from a Florida college in 2015 left with $23,379 in debt, contributing towards the $1.3 trillion in total student loan debt that extends among 44 million borrowers in the U.S., according to a study by The Institute for College Access and Success.
At some top universities, athletic programs have already been met with resistance. At Clemson University, for example, its athletic department proposed a plan to install a $350 per year athletic fee among all 17,000 students before receiving pushback from its student government.
The irony: Clemson’s football program won the national championship without a single contribution out of its student body. Instead, Clemson raised nearly $40 million in donations through its annual "I Pay Ten A Year" (IPTAY) pledge model that supports athletics.
Despite the widespread spending, Kalinowski believes if UCF continues to charge these fees, it will only help draw in more talent and students by producing winning seasons.
But if UCF removes student athletic fees, he said he would be more than willing to contribute to UCF Athletics by paying normal price for the tickets he uses.
“I believe sports does a good job of adding an additional sense of pride to what school you attend by drawing attention to the school,” Kalinowski said. “As a sports fan, it has been fun to be around the Fiesta Bowl run and this year’s basketball team… It all adds to the college experience in my eyes.”
Originally published July 24, 2017.