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Montana athletic department considering trimming scholarships
With budget cuts and rising fixed costs, the University of Montana athletic department is struggling to find money for the next fiscal year and is considering dropping the number of out-of-state scholarships available.
With a budget set at around $13 million, athletic director Jim O’Day said the increase of fixed costs is causing the department to dip into savings, which he said is a cause for concern.
“You have to have that money put away because you never know what’s going to hit you,” O’Day said. “Our philosophy is to keep at least $200,000 in reserves.”
In order to avoid using the savings, O’Day said he is looking for areas in which he can shed some dollars.
The most notable area is scholarships.
Currently, O’Day said the department has about $4 million budgeted for scholarships.
That number is expected to rise, however, as O’Day said an 8.5 percent raise in out-of-state tuition and fees will cause the cost of those scholarships to balloon to $30,000 a year per athlete.
The department will pay $14,000 to in-state athletes, O’Day said.
“I can get two in-states for the cost of one out-of-state,” O’Day said. “Instead of going to a coach and saying ‘You have 63 football scholarships.’ I can go to him and say, ‘OK you have 50 in-state kids and 13 out-of-state kids.’”
Although this would save money, O’Day said that proposal would factor into Montana’s competitiveness.
“What’s going to happen if we do that?” O’Day said. “We’re not going to win.”
The proposal for the change in scholarship budget wouldn’t go into play until fiscal year 2012, due to the current scholarships being guaranteed for the next year, assistant athletic director and fiscal operations head James Gibson said.
In order to prevent cuts to scholarships, Gibson said the department has been making cuts where it can.
Gibson said the department made 5 percent cuts to all sports in December, adding that those cuts were made to offset rising costs.
Rising costs from rent on the Adams Center, administrative assessments, insurance, employee benefits, and debt services alone rose close to 14 percent, or $376,135.
“In knowing we had expenses going up, we had to cut that 5 percent from each sport,” Gibson said. “So we make those cuts, but then we increased our budget by 14 percent … you can do the math on that one.”
At $4.2 million, salaries take up a large chunk of the budget, but can’t be adjusted, O’Day said.
“We have the second smallest staff in the Big Sky Conference. I can’t really cut much there,” O’Day said.
The University gives the athletic department $4.5 million, while another $1 million comes from student fees.
The majority of the budget comes from football and basketball revenue.
The football team brought in $4.3 million last year, while the two basketball programs brought in a combined $750,000.
Rounding out the income is money from TV, parking, the Big Sky Conference and Grizzly Sports Athletics and its corporate company.
O’Day said the department’s dependence on the income of the sports teams worries him because of the economy.
“If I only sell 20,000 tickets a game for football instead of 25,000 we’re a million dollars in debt,” O’Day said. “I have to hope like heck that the same numbers come in.”
Instead of cutting the budget, another solution could be a change in division, O’Day said.
“We could move to (NCAA) Division II. That would be easiest,” O’Day said. That move would lower costs, as fewer scholarships are given.
Or the department could do the opposite and move up, he said.
“The other option would be to leave the Big Sky Conference,” O’Day said. “It would affect the football revenues but increase the basketball’s by playing more attractive teams.”
A move to a different division would increase several streams of revenue.
“If I’m the University of Idaho and playing in the Western Athletic Conference, they’re getting $400,000 in television revenue while we’re only getting $80,000,” O’Day said.
A move into a higher division can’t be done until August of 2011, when the NCAA moratorium on teams changing divisions ends.
Then, a move would hinge on a decision from the president of the University, with the approval of the Board of Regents, O’Day said.
With a move in divisions delayed for more than a year and an increase of funds from the school “very unlikely,” according to O’Day, it will most likely be the scholarships that take the biggest hit while the department wades through the tough times.
“The program cannot continue down the direction it’s going right now. Starting next year, unless something changes, scholarships really are the only area where we can make a change that can keep us afloat,” he said. “The only thing I can do is reduce the budget because I can’t add revenue. I don’t know where I would get it. You can’t steal blood from a turnip.”