Purdue University may not rank among the top in the Big Ten schools, but it still is profitable. For instance, in 2017-18, the athletic department reported revenue of $103 million up from $84 million in the previous fiscal year. As the revenues rose so did the profits, and in the 2017-18, the school’s athletic department had a net of $7.9 million compared to the $868,000 loss reported in the previous year.
With such a shaky history; sometimes making losses and other times making profits, it is only in the best interest of the school that the athletic department thinks of ways it can raise more revenue and avoid being in the red. Since football and basketball are the major games that rake in profits for the school, let’s take a look at how the Purdue basketball team generates money to keep the athletic department afloat.
In 2002, Purdue athletic director sought to negotiate with Nike so that the sneaker company would supply not only footwear for the university’s teams but also apparel. At the time, apparel contract was with Champion, but Champion was leaving the college business. The agreement with Nike to supply footwear for all teams was due to expire in June 2002. The school entered a contract with Nike running from July 1, 2006, through June 30, 2010, in which Nike obtained the right to supply footwear and base layer apparel for the Intercollegiate Athletic Program. In the contract, Nike would provide a mutually-determined Nike supply product for each contract year.
From 2006-09, the annual “Supplied Product limit” was $900,000, which then increased to $1,100,000 from 2009-14. After the expiry of the contract signed in 2006, the school continued its partnership with Nike with an eight-year deal that was extended in 2009 for another four years to expire in 2014. The contract netted the university around $10.5 million in cash and equipment. The school would also receive cash benefits with the base compensation from 2006-09 being $250,000 per contract year. From 2009-14, the annual base compensation would increase to $300,000. However, as per the terms of the agreement, the base compensation would be reduced depending on the occurrence with the reduction ranging from $2,000 to $25,000 in the contract year the incident took place.
The school current’s contract will expire in 2021; in 2015, the total annual pay was $1.95 million.
In April 2016, the Big Ten Network opted to shift its media rights from ESPN to Fox. While ESPN paid $100 million per year, the deal, then pending, was projected to go as high as $250 million per year. The network changed its mind after going into a cost-cutting mode. CBS wanted to renew its package which by then was worth $12 million per year for the men’s basketball games. Each of the Big Ten schools received $20 million in the 2009-10 fiscal year and about $27 million per year in other years, but once the new deal kicked in, the figure would rise to around $40-45 million per year in media rights.
The six-year deal will expire in 2023 and is worth $2.6 billion over that period. According to the Cedar Rapids-Gazette, by the time the contract expires the schools will have gone from receiving $43 million per year to an annual payout of $54 million.
Schools in the Big Ten share gate receipts from the men’s basketball with each school contributing 25% to the pool. The floor of the contribution is $29,000, and the ceiling is $67,000. Purdue University ranked number 9 with an amount of $16,587,166, and it accounted for 27% of the total athletic department revenue ticket sales. The women’s basketball does not bring in much, but it still puts its best foot forward since during the 2017-18 year it generated less than $300,000 for the fourth consecutive year, but it still was an increase after declining for six years consecutively.
In 2018, Dick Buell who graduated from Purdue University in 1972 gave back to the school through a $10 million donation to help cover the salary of the men’s basketball coach. The gift is the single-largest donation in the school’s history, and for Dick who recognizes Matt Painter’s integrity, it was an opportunity to reinforce the core values of the university’s athletics department. The goal of the donation is to support the program by attracting and retaining the best coach.