The record-setting year of 2015 for the Missouri Tigers in terms of athletic department expenses and revenue has been immediately surpassed, as Mizzou posted new records in both categories last year.
Tod Palmer of The Kansas City Star reported on Monday that the Missouri Tigers have again reported record-setting expenses and revenues for the last fiscal year. Revenue topped $97.27 million, while expenses came out to $94.32 million.
The biggest reason for the increase in revenue, nearly a six percent jump from the then-record $91.2 million revenue figure in FY 2015, was an increase in Mizzou’s media rights payout as a member of the Southeastern Conference.
SEC Network Fuels Tigers’ Profits
South Bound & Down
Missouri’s payout as part of the SEC increased an impressive 27 percent from FY 2015 to FY 2016, going from $26.4 million in FY 2015 to $33.5 million in FY 2016. That bump was timely, as revenue from other sources actually dipped for the Tigers in 2016.
Revenue from ticket sales dropped 18.3 percent, going from $23.4 million to $19.1 million. The athletic department pointed to the loss of a home football game and the self-imposed men’s basketball postseason ban as reasons for the decrease, but the less-than-desirable results on the court/field also played a part.
The overall spike in revenue was also timely because Mizzou’s expenses were as high as they have ever been.
Cost of Attendance Drives Up Expenses
As with the increase in revenue, the increase in expenses can primarily be attributed to one factor: an uptick in athlete aid. The Missouri Tigers have gone from simply providing the traditional grant-in-aid (covering tuition, books, room and board) to providing for the full cost of attendance for its scholarship athletes (all the above plus all fees and equipment that athletes need). That took the annual cost of a scholarship from $3,079 to $5,451, a bump of 77 percent.
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While there were also increases in equipment costs, camp expenses, recruiting, debt services, non-coaching staff salaries and the funds paid to schools to lure them to come play Mizzou, nothing was as impactful as the shift to providing for the full cost of attendance. The only question that remains now is where does Missouri go from here?
Missouri’s Financial Future
It’s probable that the media rights payout for Missouri could increase again in 2017, as the men’s basketball program will again be eligible for a share of the NCAA March Madness revenue. The Tigers’ self-imposed ineligibility cost the school $1.3 million in revenue in FY 2016. That might be the only significant uptick that Mizzou sees in 2017, however.
The SEC Network is a finite resource, and while prices for advertising space can theoretically increase year-to-year based on demand, there’s a ceiling even for that which the market decides upon. Planning on a 27 percent increase in revenue from media rights on an annual basis would be foolish.
It’s unlikely that the decrease in ticket revenue will quickly turn around as well, as both the football and men’s basketball teams are unlikely to post a dramatic turn-around in on-court/field results in 2017.
At the same time, it’s probable that expenses will continue to grow. Inflation slowly raises the cost of goods used by athletes and teams, along with cost-of-living increases and raises based on merit for staff.
The bottom line is that in order to meet the demands of expenses which are likely to set new records on an annual basis, Missouri needs to post record revenues on an annual basis. Through the past two seasons, that mission has been accomplished.