The $83 Million Problem
Yes the big story of the last week was the eventual creep toward and approval of a new labor deal in the NFL, which was made official yesterday. However, a noteworthy story in high-level local college athletics may have slipped under the radar.
As reported in The Washington Post last week, the University of Maryland finished the last fiscal year with a athletic department deficit of $83 million. Due to an arrangement that few schools use, the school has been balancing its budget by using funds kept in special athletic department accounts where revenues had been kept when the two revenue producing sports-football and basketball-were doing well early in the 2000s. However, the recent struggles of both of those programs have failed to produce enough revenue to keep up with the expenses incurred in the athletic department while competing in twenty-seven sports-most of which don’t produce revenue.
With the topic of perhaps compensating students who participate in intercollegiate athletics beginning to pick up some momentum in certain circles, at present it looks as though the University of Maryland wouldn’t be able to participate if some type of program were in place to give athletes a stipend or payment to help offset their expenses. Of course, this is not the reality at present. And given a recent look at the school’s athletic finances as done by ESPN, there isn’t much wiggle room to even begin to think about paying athletes.
Much of the debt facing Maryland comes from two construction projects for the school’s biggest sports-the renovation to Byrd Stadium and the new arena for basketball, the Comcast Center, as well as facility improvements for some of the non-revenue sports. Both projects were approved in the wake of the football team’s early success under Ralph Friedgen, who took the team to a BCS bowl in his first season as coach, and Gary Williams leading the Terps to the national championship shortly thereafter. Since then, however, the successes for football and basketball have been fewer and further between. Couple those seasons of mediocrity with a fickle fan base for football and decreased ticket sales, and flagging donor support, it appears to be getting more difficult to justify the spending, even as the school needs to keep up with similar schools in the “big two” sports. The possibility may even exist that some sports may be cut in order to help the bottom line.
In high level college athletics, often a rising tide (winning seasons of football and basketball, along with donations and ticket sales, simplistically) lifts all boats (covers the expenses for all the remaining sports). Given the situation at the University, coming off seasons where the longtime coaches of the football and basketball teams were either removed or retired, there is no guarantee that things will get better right away. To that end, the university president has created a commission charged with making recommendations to find a way to long-term financial stability in the athletic department. Whether long-term financial stability can coexist with the pressure to win remains to be seen.