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Independent study shows UAB football program made money

Marvin Gentry-US PRESSWIRE

An independent economic analysis firm released a study Thursday which refutes a claim by University of Alabama-Birmingham officials that the football program had to be shut down for financial reasons.

According to the report, the sport was making money for the university and surpluses would grow in the years ahead.

"We find that the three sports in question did not cost the university anywhere near the $3.75 million indicated on UAB's accounting statements," writes Dan Rascher and Andy Schwarz, partners of Bay Area firm OSKR, according to Tom Farrey of ESPN. "Instead, after making the sort of adjustments suggested by the economics literature, we conclude that the three sports were effectively break-even to slightly positive. Football and bowling showed a modest positive return for 2013-14, the last year for which complete data was available. Rifle showed a deficit, but the three-sport balance was positive to the tune of $75,000."

The report was conducted in response to the decision by UAB to drop the sport it claimed it could no longer afford as schools move to cover the full cost of attendance with athletic scholarships.

The report indicates that athletic scholarships cost UAB far less than their listed prices, namely that numbers assigned to tuition are not hard costs and financial benefits of being a member of Conference USA are superior financially to an alternate affiliation due to the media revenues associated with such a partnership.

"We conclude that going forward, anticipated improvement in ticket sales from 2013-14 levels and new College Football Playoff revenues will outpace new expenses from Cost of Attendance stipends and unlimited food allowances," read the report. "Once these new revenues and expenses kick in, we anticipate the aggregate annual surplus from football, bowling, and rifle would exceed $500,000, even without including the anticipated but hard-to-quantify benefits to admissions and enrollment, donations, and media exposure."

OSKR was hired on March 7 by the UAB athletic task force to look into UAB's finances. The university cancelled the $80,000 contract a week later, but OSKR continued its work in spite of that.

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