The magnitude of California’s budget crisis is being felt
as far as the UCLA athletic department, as rising student fees and
budget cuts have the department staring at a deficit of
approximately $1.7 million for this fiscal year, which began July
1.
In a letter dated July 2, University of California President
Richard Atkinson warned university chancellors that he would be
proposing at least a 25-percent increase above current student fee
levels.
This increase is meant to offset the large cuts being made to
the UC budget. The governor’s budget proposal shows a $300
million cut. When cuts from the last two years are included, the UC
is looking at $360 million in cuts. Additionally, a one-time $80.5
million reduction is being proposed in the California State
Assembly and Senate budget versions.
For an athletic department at a public university that both
receives funds from the state and awards athletic scholarships that
pay student fees, the budget crisis is a definite problem.
“We are affected significantly (by the budget
crisis),” said David Secor, a UCLA associate athletic
director in charge of business and finance. “We’re hit
with a double whammy.”
UC students will be paying higher fees next year, to the tune of
at least $960 more each. Atkinson’s proposal also includes
the prospect of a 30 percent increase, which would raise student
fees by $1,150. Out-of-state tuition would increase as well.
Secor estimates that the student fee increase will cost the
department between $350,000 and $400,000, plus another couple
hundred thousand dollars for out-of-state tuition increases. On the
receiving end, the university, which awarded the equivalent of 270
full athletic scholarships (some sports can divide scholarships)
last year, will cut approximately $900,000 from the $2.8 million it
gave the athletic department last year.
With the weak economy, scholarship endowments are paying
approximately $200,000 less than expected. Of last year’s
$5.7 million in scholarship costs, $800,000 was covered by
endowments, according to Secor.
Coaching transitions are costly as well. New football coach Karl
Dorrell was hired for six years at $600,000 per season. The buyout
deal of his predecessor, Bob Toledo, is comprised of one year at
$578,000 and five years at $153,000 per.
New men’s basketball coach Ben Howland was hired for seven
years at $900,000 per season. The buyout deal of Steve Lavin is
$1.2 million over five years.
Though the department will run a deficit in this fiscal year
after coming out a few hundred thousand dollars ahead last year,
according to Secor, it isn’t time to panic.
“The department can get through this year because there
are some reserves,” Secor said.
Prior to the beginning of this fiscal year, the department had a
$2 million general surplus.
In addition to the general surplus, the department had $2
million to $3 million earmarked in the event of coaching buyouts.
And it’s quite possible that those coaching buyouts will end
up costing less than previously mentioned.
Both buyouts are fully mitigated, meaning that if either Toledo
or Lavin were to be hired for a new job, the salary they make in
their new position would be subtracted from what is owed to them by
UCLA. Lavin has been hired by ESPN, but the terms of his deal have
not been released.
Though a move to reduce the number of scholarships awarded would
save money, Secor made it clear that this is not the
department’s intention.
“We will still offer the full complement of athletic
scholarships,” he said. “We are not jeopardizing
teams’ abilities to win.”
UCLA awards the NCAA maximum number of scholarships in all 22 of
its varsity sports. “The department’s mission statement
is to be nationally competitive in every sport,” Secor
said.
Another possible move to increase revenues is to increase ticket
prices, something the athletic department is very reluctant to
do.
The poor seasons of the football and men’s basketball
teams, coupled with the weak U.S. economy, has Secor worried that a
move to raise ticket prices would actually alienate already
wavering fans and earn the department less revenue.
“We don’t want to shoot ourselves in the
foot,” he said.
Even with ticket prices remaining relatively unchanged, football
season ticket sales are down 600-700 tickets from this same time
last year, according to Secor.
The only real option left for the athletic department is to do a
better job of fundraising.
Already, through a program conceived by Athletic Director Dan
Guerrero a few months ago called the Champions Fund, the athletic
department has received over $5 million in donations for a
five-year period.
According to Secor, the Champions Fund is a very aggressive
fundraising campaign that looks to major donors for continued
support of the athletic program.
The state’s financial trouble is the impetus that really
rocked the UCLA athletic department into a deficit.
“If you took the registration fee problem out,”
Secor said, “everything else would probably work out. There
would be belt-tightening, but we’d be okay. These were the
real whammies we weren’t prepared for.” All
that’s left to do is hope that fundraising continues to be
strong and the football and men’s basketball teams return to
glory, because the situation at the state level doesn’t look
to improve.
Secor estimates that next year will show a budget deficit at
least equal to this year’s $1.7 million.
“This will be an ongoing problem,” he said.
“The cost is going to go nowhere but up, maybe
significantly.”