Athletic plan: Keeping ‘Big Red’ in the black

The Division of Intercollegiate Athletics plans to take significant measures to overcome its financial challenges and maintain its academic and athletic competitiveness.

The measures outlined in the department’s five-year financial plan have been carefully formulated by department staff over the past nine months and were presented at an Athletic Board meeting Friday, Oct. 22.

See also: The Legislative Audit Bureau report on UW Athletics

“In addition to assuring fiscal strength, we want to build on the momentum that we’ve been fortunate to experience here during the 1990s,” Athletic Director Pat Richter says.

“We have added three women’s sports, built the Fetzer Academic Center and the spectacular Kohl Center, and upgraded a number of other athletic facilities,” Richter adds. “As a result, our expenditures have grown significantly. But overall, we feel those have been worthwhile investments in our future.”

The department lost $1.1 million in the last fiscal year and is expected to lose $89,000 more this year, the Legislative Audit Bureau says in a recent report. But proposed cost containment measures and specific revenue increases will enable the department to maintain successful academic, athletic and financial performance without assistance from student fees or additional support from the state, athletic officials say.

The department expects to save close to $1 million annually by consolidating business operations and centralizing facilities and maintenance operations.

Athletic officials also pledge to limit bowl games expenses to bowl participation revenues.

Operating budget increases will be limited to 2 percent or less in each of the next five years.

The department also plans an ambitious program to increase annual operating revenue from $39 million in 1999-00 to $51.4 million in 2004-5. Even with significant increases in annual debt service as a result of facility improvements, the department projects that it will generate surpluses that will boost reserves from $2 million to $10 million.

Here’s how the department plans to accomplish those goals:

• The most significant sources of additional revenue will be Big Ten distributions, department fundraising and additional investment income earned on the increasing operating reserves.
• Big Ten distributions are projected to increase 57 percent ($3.3 million), much of that amount from a football television distribution.
• The department plans to implement a comprehensive annual fund program that will boost projected annual fund-raising from $3.35 million in 1999-00 to $7.8 million in 2004-5.
• The department will oversee a preferential seating program for football, men’s hockey and men’s and women’s basketball. Phasing in a preferential seating program for football will help boost overall revenues from this program from $1.5 million in 1999-00 to $6 million in 2004-5 (the department currently raises $8 million less, per year, than the Penn State athletic program, for example).
• The department anticipates overall ticket revenue to increase 10 percent ($1.6 million), based on the number of home contests and minimal price increases.