Applying Activity-Based Costing to Intercollegiate Athletics

Authors

  • Heather J. Lawrence Ohio University
  • Liz Wanless Ohio University
  • E. Ann Gabriel Ohio University

DOI:

https://doi.org/10.18060/23717

Keywords:

NCAA, sport finance, intercollegiate athletics, activity-based costing

Abstract

Current accounting methods in intercollegiate athletics make it difficult for leaders to assess and understand the true cost of each sport team operations. Institutional and athletics leaders often make decisions concerning sport sponsorship/offerings, budget allocations, overall program operations, and review Title IX compliance based on information that may not truly capture the cost of each sport. Additionally, intercollegiate athletics reform groups and the federal government are calling for athletic departments to report more consistent, accurate, and transparent financial data. The purpose of this paper is to respond to the call for accounting reform in intercollegiate athletics via an innovative application of activity-based costing (ABC) to one NCAA Football Bowl Subdivision (FBS) athletics department. ABC was applied to the athletic department budget report with results showing how previously established ABC cost drivers for intercollegiate athletics (Lawrence, Gabriel, & Tuttle, 2010) and reallocation of expenses back to specific sports allow for a greater understanding of the cost of each sport.

Author Biographies

Heather J. Lawrence, Ohio University

Heather J. Lawrence, PhD, is the associate dean for Graduate and Professional Programs in the College of Business and a professor in the Department of Sports Administration at Ohio University. She is also an adjunct professor at the University of Guelph (Canada). Her research interests include intercollegiate athletics finance, sport premium seating and sales, and diversity and inclusion in sport.

Liz Wanless, Ohio University

Liz Wanless, EdD, is an assistant professor in the Department of Sports Administration at Ohio University. Her research interests include advanced analytics application to various aspects of sport organization operations, including customer relationship management, athletic fundraising, player health, and the use and diffusion of natural language processing (NLP) in the sport industry. In addition, she has conducted invited workshops explaining artificial intelligence applications and impacts for sport.

E. Ann Gabriel, Ohio University

E. Ann Gabriel, PhD, is an associate professor, emeritus, of the School of Accountancy at Ohio University. Prior to her career in academia, she spent almost two decades in the field of accountancy. Her research interests include the impact of market frictions on information signals in the product and capital markets as well as applications of accounting techniques to intercollegiate sports.

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2020-06-29 — Updated on 2020-07-22

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