Carolina made a net profit of $47,413 in 2015 for a 0.05% profit margin according to data obtained and released by USA Today Sports. The Heels posted their smallest profit of the Bubba Cunningham era and netted the least amount of money since the Tar Heels lost $842,000 in 2007. The Heels saw both their revenue and expenses increase with each breaking the $89,000,000 mark. This past year continues a trend for Cunningham who has kept the profit made by the Heels small over his tenure as Athletic Director.
On the revenue side the Tar Heels saw a 10% decline in ticket sales which corresponds with the lack of attendance at the major revenue sports throughout most of 2015. All other income sources saw gains for the Heels. Contributions, including individual and corporate donations, were up 12.17%, which brought them nearly level with ticket sales as the Heels' second largest source of revenue. The largest source of revenue for the Heels was rights and licensing which also grew the most at an impressive 15.46% to $35,278,904. This includes media rights from television and radio as well as the ACC revenue sharing structure. The Heels' subsidy, which is the sum of the fees students pay as well as funds from the school, decreased last year by 0.42% to $9,040,407. The rest of the income for the athletic department came from sources lumped under "Other" which includes income from athletics restricted endowments and revenue from sports camps. The final tally for the Heels on the revenue side was $89,128,256.
Expenses increased across the board last year for the Heels coming in at a final tally of $89,080,843--a 6.73% increase from 2014. The Heels paid more for coaches, scholarships, facilities and all other miscellaneous expenses in 2015 than they had the year before. Coaching salaries increased by 5.11%, scholarships went up by 9.85%, facilities and overhead went up by 13.56% and other expenses increased by 4.18%.
This is a lot of numbers for most people but there are a couple key things to take away from the 2015 numbers. The decline in ticket sales really bit the Athletic Department in the butt this past year, particularly around the lackluster showing at most of the home football games. Fans should expect to see a lot of emphasis on attendance at games this fall as Carolina tries to make up the loss. The report also shows that media rights are driving up revenue for the Heels just like every other team in college sports. It's also important to note that this athletic department is emphasizing contributions from businesses, individuals and other outside groups to an extent that has not been previously seen at Carolina.
Carolina is taking their increased income and spending a lot of money on facilities. The Heels have more than doubled their facilities expenditures since 2005. Facilities now cost the Heels more annually than scholarships do a marked change and a sign of the college sports arms race that is sweeping across colleges nationwide.
Going into next year it will be interesting to see if the Heels start to turn a profit to give money to the school. NC State's athletic department made more than $3,000,000 in profit a recurring element for the Wolfpack and a strength of their program. When schools make a profit, they have to either put those funds into future use for new facilities, other athletic expenditures or they have to return their profit to their school who can then use it for classrooms, to cut student fees, research programs or anything else the school spends money on. It would be nice if the Heels could shift the focus of their Athletic Department to returning more money to the school or reduce student fees. However it might be more likely that they continue to spend on football and basketball to try to launch the Heels into national title contention in multiple sports.