Sport Finance and Budgeting Comp Exam

Financial Management Trends—
for High School Sports

• Number of participants is increasing
• School districts increase pay-for-play fees
• Negative impact on numbers participating

Sources of funds for high school sports

Various state and local sources
• Operating grants and contributions
• Participant fees
• Gate receipts

High school sport expenses

• Personnel Costs

  • Salaries for coaches, athletic directors, trainers, and referees.

  • Stipends for assistant coaches and part-time staff.

• Equipment and Uniforms

  • Purchase and replacement of sport-specific gear.

  • Uniform updates, protective gear, and maintenance.

• Facilities Maintenance

  • Upkeep of fields, gyms, locker rooms, and stadiums.

  • Utilities and custodial services.

• Transportation

  • Buses for away games and tournaments.

  • Driver wages and fuel costs.

• Insurance and Medical

  • Athletic insurance policies for student-athletes.

  • On-site medical staff or emergency services.

• Tournament/League Fees

  • Entry fees for postseason play or regional competitions.

  • Costs associated with hosting events.

Financial challenges for high school sports

• Budget Constraints

  • Education funding is often limited and prioritized for academics, leaving athletics underfunded.

  • Economic downturns may force cuts to non-essential programs, including sports.

• Equity and Access

  • Wealthier districts have more resources, better facilities, and robust booster club support.

  • Low-income areas may struggle to offer the same range and quality of sports.

• Rising Costs

  • Equipment, transportation, and insurance costs continue to increase.

  • Inflation affects basic operational expenses, straining already tight budgets.

• Reliance on Pay-to-Play

  • Many districts now charge student-athletes to participate, which may deter low-income families.

  • This can lead to decreased participation and increased inequality.

History of Facility Financing

Phase 1 (1880s to the end of the Great
Depression)
27 facilities, incl. Wrigley Field

Phase 2 (1960 to 1979)
57 facilities (many for multiple purposes)

Phase 3 (1980s to present)
90 facilities (and counting)

Methods for Financing in historical phases

• Phase 1 – Privately financed
• Phase 2 – General obligation bonds (GOBs) (PUBLIC)
• Phase 3 – Constantly changing financing methods:
Taxes (sales/property taxes; hotel/rental car taxes)
Private funding

Direct Public Financing

Bonds

Taxes

Revenues from tickets and parking
Lotteries/gaming revenues
Player income taxes
Utility and business license taxes
Reallocation of existing budget

Indirect public financing

• Land donations
• Infrastructure improvements
• Tax abatements

Private Financing

• Private return on new facilities
• Sources and techniques
• Contractually obligated income (e.g., naming rights)
• Asset-backed securities

Public / Private partnership issues

Ownership of facility

Voter approval Payment terms

Responsibility for cost overruns

Management of future revenue streams

Financing sources

Direct revenue public financing sources

These are explicit revenue streams collected specifically to fund a sports facility. They are often visible to the public and can be politically controversial.

Indirect revenue public financing sources

These are less visible forms of public financial support that benefit sports projects without direct tax increases. They often provide value through subsidies or infrastructure enhancements.