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Recession forces colleges to find ways to cut spending
The unrelenting downturn in the economy is a hot-button issue in college athletic departments, the same as at your kitchen table.
“Everybody you talk to, that’s the topic of conversation,” says Mike Cleary, executive director of the 6,500-member National Association of Collegiate Directors of Athletics. “I don’t care how big and how wealthy they are, this is going to impact everybody.”
Many Division I athletic departments have increased their spending at a higher annual rate than their universities have in recent years. Now, many are looking at decreases. That’s a fundamental change. NCAA President Myles Brand worries some schools could eliminate less-visible sports.
“There are so many angles from which college athletic departments are getting clobbered that there is going to have to be a rethinking of how they go forward,” says Andrew Zimbalist, a professor of economics at Smith College in Northampton, Mass. “And what’s going to happen next year is even uglier.”
The downturn affects schools large and small, from Ohio State to Ohio Northern.
“The best way to think about it is your own budget at home,” says Ohio State athletics director Gene Smith, whose department has a $115 million budget. “Expenses are up.”
Ohio Northern is not printing media guides for its spring teams. Simmons says that will save as much as $20,000 — being green while saving green.
Ohio State, one of the few athletic programs that typically run in the black, is looking at the potential of a small shortfall this academic year, one that could be covered by reserves, Smith says. Among recent changes: Per diems for coaches and staff were trimmed from $65 to $45.
“All of us are a little bit on edge right now,” Purdue athletics director Morgan Burke says. “You’ve got student-athletes worried about their parents; you’ve got fans worried about their jobs; and athletics departments” worried about costs.
Miami will bus to South Florida and Central Florida for football games this fall rather than fly about 200 miles to each school.
“People who would have never considered busing,” Cleary says, “are considering it now.”
The Western Athletic Conference can’t do that for this spring’s tennis and baseball tournaments — in Hawaii.
“We feel like all our members should get to host WAC championships, but talk about bad timing,” WAC Commissioner Karl Benson says. “We are in serious talks now to move future championships to more geographically friendly locations.”
Under discussion are Phoenix and Las Vegas, which he points out have comparatively cheap flights and hotels and no WAC member schools.
Dan Fulks, an accounting professor at Transylvania University in Kentucky who consults for the NCAA on athletics finances, says there is good reason schools are trying to save money on travel.
“On the expense side, the two largest items in Division I are scholarships and salaries,” Fulks says. “Those two count for about 50% of the total budget. The third largest item is travel, and that takes up only about 10%.
“So how do you save money? You could cut the number of scholarships; nobody wants to do that. Salaries and benefits could take a hit. Travel is about the only other place you can do it.”
‘Concerned for our future’
Brand fears some schools might cut non-revenue sports such as swimming and track.
“Universities are going to have to cut back; there’s no question about that,” Brand says. “But can they sustain, at least at a minimum level, these low-visibility Olympic sports until the economy catches back up?”
Athletics directors from the Big Ten will wrap up a three-day meeting today in Tampa, where they have been discussing the downturn in the economy, among other issues. Minnesota athletics director Joel Maturi says the real worry is not this academic year but next.
“We’re going to be OK in ‘08-09 because the season tickets have already been sold,” he says. “We’re concerned for our future.”
Many schools are just now sending out renewals for football season tickets. “It’s the great unknown,” Florida AD Jeremy Foley says. “We’ll know more in about six to eight weeks.”
Another unknown is how much boosters will be able to contribute to athletic funds.
“We’re linked with what’s going on in the economy because we generate all of our own money,” Indiana athletics director Fred Glass says. “We either earn it or we ask for it.”
Many of those they ask have seen their investments halved.
“The Dow is down almost 50% since September,” Zimbalist says. “It’s very hard to imagine that boosters have avoided getting hit by that. Some people won’t have lost 50%; some will have lost 30% or 35%. But others will have lost 60% or 70%.”
Some expenses are new. When the airlines began charging for bags, Smith says, it was an expense for which Ohio State had no budget line.
“We have more than 900 athletes on 36 teams,” he says. “They all carry extra bags. … Everything is up: our books and board by 6.5%, utilities by 9%, travel by 20%.”
Still, behemoths such as Ohio State can withstand rising costs more easily than smaller schools with smaller budgets.
Idaho State originally said no when Oklahoma asked to play the Bengals in football. Interim athletics director Jeff Tingey says he changed his mind specifically because of a shortfall in his budget. Idaho State will get $500,000 to play in Norman on Sept. 12.
“The NAIA and Division III, they’ve squeezed every nickel for a long time,” NACDA’s Cleary says. “The ones who will get hit hardest are the lower tier of I-A, with their champagne appetites and beer budgets.”
Hold the line or raise prices?
A recession comes after two consecutive quarters of declining productivity — or, as Notre Dame calls that, halftime.
That’s a joke Purdue fans tell, though the economy is no laughing matter anywhere these days. Purdue will not raise ticket prices for football next season, though it normally raises them by $1 each year. That will cost Purdue about $500,000 for the coming season.
“I think you have to recognize the importance of your fans not having to pay more during these times,” Burke says.
Even Florida, which won last season’s national championship, won’t raise its prices for football season tickets. A letter sent to ticketholders cites the economy.
Others cite the economy in raising prices. Michigan State will charge $3 more for most tickets next football season as part of a response to challenging economic conditions in the state and nationally, it said in a news release this week.
Southern Conference Commissioner John Iamarino says presidents of member schools asked his office to find ways to save money. As a result, the top four teams in some sports will go to conference tournaments instead of the usual eight to 12. This spring, SoCon baseball teams will play three-game series in two days rather than the usual three.
Taken together, those changes and others will save the conference and its member schools an estimated total of about $250,000, Iamarino says.
Fulks, the NCAA consultant, thinks college and pro sports have one built-in advantage in troubled times like these.
“My sense is intercollegiate athletics are part of the entertainment industry, which historically has been pretty recession-proof,” he says. “During bad times, people go to movies more. They go to games. These are escapes for them.”
By Erik Brady, USA TODAY