Soon after taking the reigns of Washington State University, President Kirk Schulz said in a letter that capital building projects had put the school in a bind, a letter deemed to be squarely aimed at athletics, and that he'd be looking for ways to bring athletics into the black. In a letter being given to the Board of Regents at their meeting this week obtained by CougCenter, it seems Schulz, Moos and two other members of the board have come up with a way for athletics to turn a profit ... but not without the possible need for additional student fees and a large cash flow increase from the Cougar Athletic Fund.
The full letter indicates that after several meetings between Schulz and Moos, they believe that athletics could be posting a $300,000 surplus by Fiscal Year 2020, all of which would go towards paying their sizable debt owed to the university that is accruing thanks to the current budget deficit. By Fiscal Year 2021, athletics is expected to clear $1.2 million, which again would go towards repaying their overall debt to the university.
So, how will the athletic department manage to do this? The biggest dents, as we previously mentioned, either have the potential to rustle roughly 20,000 people's feathers or require a good deal more legwork will need to be done by the CAF.
Additionally, a modest student fee to support Athletics may be added beginning in FY18.
Based on the spread sheet in the plan, athletics would take in about $1.7 million from the fee in Fiscal Year 2018, or roughly $85 per student. WSU students already pay over $1,000 every year in mandatory fees from the school, so tacking on an additional $85 may not seem like much. But every little bit adds up for students already paying tens of thousands of dollars every year to attend school.
(UPDATE, 2:20pm: We heard from the school who confirmed that the student fee would have to be approved by a vote of the students and could not just be tacked on to their fees.)
Starting in Fiscal Year 2019, the school expects to be making a lot more money from beer sales, athletic training room billing ... and some sources I'm not so sure they'll get them from. Emphasis is mine:
In FY19, the plan includes additional revenue from several sources, such as: Increases in single game ticket sales and increases in season tickets for both football and men’s basketball; increases in donor funding;Athletic Training Room billing; and beer sales in the stadium bowl. The projected revenue increases total $2.4 M.
The plan expects donations from the Cougar Athletic Fund to double by FY2019 and that seems like an awfully lofty goal considering how much trouble the CAF has in increasing donations right now. Add in the fact that they're expecting increases in basketball season tickets, which one would assume would correlate with expected improvements in the quality of the team, and this seems to be a bit of a stretch. It's always good to have a goal in mind but given the relative slow pace of growth for the CAF and our own assumptions and visions for the near future of the basketball team, it just doesn't seem like $2.4 million will be a reachable goal.
Some of the other stuff, even though it's moving money sources around, makes a good deal of sense, though:
Coverage of the President’s box in Martin Stadium, which is used for donor cultivation; and custodial support for some the athletic facilities which are used primarily by students.
How this wasn't been being done before, I'm not really sure, but it meshes with Schulz's desire to re-institute formalized budgeting for the university. The school contributing to the care for areas that are mainly used by everyday students makes a good deal of sense since athletics isn't the one putting most of the wear and tear on it.
Sometime after that, the university would start chipping in some money for the revenue shortfalls the department is experiencing that aren't necessarily their fault.
Support in future years would include partial coverage of the PAC-12 dues; funding for the academic support unit within Athletics; and partial compensation for lost revenue due to the creation of the PAC-12 Network.
More expensive conference dues and the added expense of paying for student-athletes are obviously leading to increased costs for the athletic department. Again, not something that they can really do anything about so it's not unreasonable for the school to chip in some cash.
This all also assumes WSU won't be firing one of their two highest paid coaches to whom they owe a good deal of money. Most of Mike Leach's contract is guaranteed and all of Ernie Kent's is meaning separating from either of them in the near future (something I hope doesn't have to happen) will cost the department a good deal of money. For a department whose margins are as precariously thin as WSU's, a few million here and a few million there make a big, big difference. Having to pay off either coach could make balancing the budget extraordinarily difficult.
Combined with what will now be quarterly budgeting meetings for athletics, many of these changes, regardless of their stated goal to get athletics profitable, make an awful lot of sense. It again harkens back to Schulz's commitment in June to formalizing budgeting and closer management of capital building projects so the school can continue to move into the 21st century.
All told, I don't think this is nearly as doom and gloom as some people were feeling it could be after Schulz's original comment. Athletics will have the belt tightened but the school still wants to figure out ways to get them what they need to remain competitive in the Pac-12. The student fee isn't exactly ideal and I'm not a huge proponent of saying "Well, it's just a few extra dollars" when tuition costs are just now starting to settle down. Overall though, things are looking a little better today for athletics.