Forum Post
Faculty Senators, please take note!
247Sportrs.com: Kirk Schulz tackles institutional support for WSU athletics head on
I’ve been warning people at WSU (faculty, staff and students) about the impending financial crisis of the WSU Athletic Department ever since the Pac-12 conference turned into the Pac-2. In fact, myself and other former Faculty Senators worked hard over the past several years to bring attention to the incredible deficit that the Athletics Department has run up at the expense of everything else at WSU (totally over $300M). Schulz (in his own words in the attached link above) is now stating that the cost overrun EACH YEAR of WSU’s Athletic Department will be $20-25M. Note that he is assuming a mythical media rights deal that will bring in $15M per year. Does this sound familiar? It does to me, because Schulz promised a $50M per year deal for the Pac-12 before he was “blindsided” (also his own words). This future deal is a fallacy. Don’t buy it? I suspect the deal will be much less because the Pac-2 is effectively joining the Mountain West. Unfortunately, there is NOT a huge TV audience for the football games that WSU will play. Therefore, there will be little advertising to sell to make the deal happen. All of the significant media rights have been locked into the SEC, Big 10 (which now includes UW, UO, USC and ULCA), Big 12 (which now includes UAriz, ASU, CU, UU) and ACC (which now includes Stanford and UC Berkeley). Each of these conferences now have long-term, lucrative media rights deals that don’t (and won’t) include WSU.
Last year, I predicted that the WSU football program would lose $30M each year in the near future, and I’m sticking to that prediction. Schulz is now promising, yet another, media rights deal. I wish there was better news on the horizon, but there isn’t. WSU needs to prioritize faculty, staff and students, as well as building maintenance, grad student salaries, equipment, startup funds, etc… over the football program. It’s simple math. If WSU is capable of finding $30M/yr to supplement the football team, they should instead spend that annual funding on things that promote our land-grant mission.
No more smoke and mirrors. We’ve seen this before. The solution is not to throw more money at the problem, but to concentrate on our mission. We need to focus on recruiting and retaining high-quality faculty that can provide a high-quality education to our undergraduate and graduate students. High-quality faculty need to be supported with high-quality facilities. We need to continue to provide high-quality outreach across Washington State. That’s our mission!
One question… what ever happened to the committee that Schulz hand-picked two years ago to look into cutting costs within the Athletic Department to balance their budget? I note that none of the Faculty Senators who consistently kept pushing for answers for several years were NOT chosen to be on this committee. Did the committee ever conduct meetings? What did they find out? Did they demand any changes within the Athletic Department? These are questions that the Faculty Senate and all of the hard-working faculty, staff and students at WSU deserve answers to.
Von P. Walden
Former WSU Faculty Senator
Now a hard-working faculty member
Response
The Faculty Senate Executive Officers have been notified of this forum post and will respond back once more information becomes available.
Comments
As Faculty Senate Chair, I have referred this Forum concern to Eric Shelden who is the faculty representative on the Athletic Budget Committee. I have also notified Dr. Walden regarding our steps to follow-up and a more detailed response will be posted in the future.
I agree with Von 100%. If folks are finding their way to this post, they might be interested in a proposal I made one year ago. It proposes moving Athletics out of the university and into a new non-profit organization affiliated with WSU.
https://facsen.wsu.edu/2023/12/08/moving-athletics-outside-the-university/
This was before the implosion of the Pac-12 and the settlement. The role of NIL has also increased markedly in the past year. At the time, this post was shown to the President, who apparently thought it was an “well thought out and interesting viewpoint.” Full stop. I wonder if the Senate would be taken more seriously if we actually voted on a concrete proposal?
Two more points:
1. We should all keep our researcher hats on when we are being “socialized” about the value of Athletics to the University. An uptick in applications at two or three points in time (when WSU was winning) is not sufficient evidence to justify a $ 30million annual deficit. We wouldn’t accept simple correlations from our students. Athletic events no doubt benefit Pullman businesses, but it would be more convincing to go beyond “Pullman depends on football games”. Is there an estimate of how much economic activity Athletics actually generates? Are we sure those visitors wouldn’t still come to games even if WSU was playing “local” teams?
2. As I’ve thought about this more, I’m coming to the realization that it is perhaps the students who are truly covering these deficits. I wonder if they realize this. Because state law does not allow the use of state funds for Athletics, WSU must undergo this little budget balancing dance at the end of each fiscal year. This past year, WSU very briefly transferred an $88m “surplus” from housing ($60m), transportation ($10m) and reserves ($18.4) to Athletics. After certifying a balanced budget, the amounts were then transferred right back. (see https://pullmanradio.com/annual-cash-transfer-to-briefly-cover-wsu-athletics-accumulated-debt-at-88-4-million-dollars-this-year/). Although I have never seen this written down, I suspect it is because these services are funded through fees from students and faculty and could therefore argued to not be “state” funds.
You might ask yourself: how is it that Housing has a $60m “surplus”? Particularly if that “surplus” must be maintained each year for use in the next fiscal year’s budget balance ballet? Logic would suggest it is only possible by a) charging students prices well above cost-recovery, b) delaying and deferring maintenance on dorms and dining halls, or c) both. Recall that first year students are required to live in WSU housing (monopolists love a captive market!), and consider that that dorm costs at WSU are roughly the same to those at UW, where many dorms are brand new and in a considerably more expensive place to provide housing.
Rather than hiding this in byzantine budget maneuvers, it would be more transparent to calculate the additional student fee that would be necessary to maintain the current Athletics department and then let ASWSU vote on adding that to the package of student fees. It may well be worth that amount of money to students and parents; problem solved. (By the way, if you are faculty or staff upset over the cost of parking, I think the same logic applies to Transportation’s $10m “surplus”).
This is more of an informed personal response than an official senate response, so I am submitting this as a comment. First, I want to thank Von and Joe for their posts. They reflect concerns shared by many and deserve thoughtful and thorough answers. Questioning the path of the institution takes a great deal of courage, and addressing those concerns will only make it stronger. As a member of the faculty, I share concerns about the fiscal health of the institution and the resulting impact on the ability of the University to maintain its stature as a leading land grant university. I am the current Faculty Senate’s representative on the WSU athletic budget oversight committee, and, while chair of the Faculty Senate, had monthly reports from the previous representative, Emeritus Associate Professor of Management, Dr. Paul Skilton. Both I, and I believe Paul, have been satisfied that the athletic program has become appropriately transparent in the handling of its budget and that its value to the institution is in line with and arguably exceeds that of similar programs at other institutions, as follows:
After reviewing the athletic budget reported to the Board of Regents in September, and the overall WSU Budget, I believe these reports are as accurate as humanly possible but recognize that they may not include all the metrics that faculty have requested. I also am impressed with the knowledge and integrity of the other members of the Athletic Budget Oversight Committee, currently including WSU Regent Jennette Ramos, Executive Vice President for Finance, Leslie Brunelli, Assistant VP and Senior Deputy Director of Athletics, Jon Haarlow and the new Director of Athletics, Anne McCoy, who all seem to be committed to responsible stewardship of the athletic program and its role in the institution.
To address some of the values presented in the original forum post, the athletic program currently carries about $143 million dollars of external bond debt. For context, WSU reported a total of ~$579 million in bond debt at the end of 2023. Neither value should necessarily imply fiscal mismanagement. Apple, one of the best run companies in the world, will earn ~390 billion dollars in 2024, and has 109 billion dollars of debt. Interest rates on most of WSU’s bond debt is 5%/year or less. Importantly, the athletic program’s payment on bond debt is a line item on their operating budget, so to my knowledge, WSU’s academic enterprise is not paying that cost directly (albeit see below).
The athletic program also currently has about 100 million dollars in accumulated cost deficits. Due to the requirements of our state, WSU cannot excuse (i.e. “write off”) that sum, and it represents an opportunity cost of funds that cannot be used for other purposes. However, there is no interest or annual maintenance cost on that sum, nor is there a repayment schedule, so it would be inaccurate to think of it as a debt, in the conventional use of the term. It might be most useful to say that the athletic program has “cost” WSU 100 million dollars over the last decade or so. This is in line with most athletic programs (enter “do most college athletic programs lose money” in any internet search engine), but the same turns out to be true of other university efforts including research (enter “do most universities lose money on research” in any internet search engine, or see data provided by WSU’s Executive Vice President for Finance to the WSU faculty senate here).
Finally, there is the direct cost of the program to WSU. For 2024, that is listed in the budget presented to the Regents in September as 2.4 million dollars in “direct university support”. The State of Washington does not allow state allocation funds to be used to support athletics (see item 4, pg. 571 of the ENGROSSED SUBSTITUTE SENATE BILL 5187), therefore that money is coming from other sources. It should be noted that this value is low compared to other years, in part because of funds received as part of the settlement with former PAC-12 members.
Currently, I think of the athletic program as “costing” WSU over the last decade an average of 10 to 12 million dollars a year. This is undoubtedly inaccurate, but possibly a useful starting point. This cost is in line with the current national averages for university athletic programs. For example, according to the USA Today article regarding NCAA Finances: Revenue and Expenses by School there are 232 institutions in the NCAA, 68 programs earn more than WSU’s athletic program,163 earn less. None the less, this sum represents a considerable investment. I note that in return the program provides student athletes with about 12 million dollars a year in student aid, and, in total, the athletic program directly engages about 1000 students through participation in sports, band, spirit, vending and other related activities. According to Jon Haarlow, another ~7500 students purchased annual passes to athletic events this year. Thus, it is clear that the athletic program is a significant element of the WSU experience for many of our students, who spend up to 6 years away from friends, family and other opportunities for engagement with a community. Notably the ASWSU president at the time served on the WSU Athletics Advisory Committee and provided testimony at the WSU Board of Regents Meeting on Sept 15, 2023 in support of the Athletic Program (see 1:17:50).
Overall, college athletics is sharing the fiscal problems of colleges in general, and the future is likely to be uncertain and turbulent. WSU’s athletic program has already experienced a dramatic decrease in operating budget, from 90.9 million in 2023 to an estimated 74 million in 2024. Some universities across the nation are reducing the size and scope of their athletic programs, and it is unclear whether this is a sign of things to come for WSU, or if the tide will turn in the other direction. I think it is important for members of the WSU community to continually question the focus and direction of the institution, and I heartily endorse the President’s pledge to improve communication with faculty, especially regarding the impact and value of the athletic program. The Senate also appreciates the inclusion of Senate members on the athletic budget oversight committee, and we will continue to provide appropriate reports in Senate meetings and address questions from the community.
Eric – thank you so very much for providing this very helpful and detailed reply. I understand your desire for this to remain a comment here in this post, as an informed but “unofficial” writeup. I do think it would be helpful, however, to have a version of your write-up somewhere in the main hierarchy of the Senate page so that Senators (and faculty) interested in the issue of Athletics have a place to learn more about a) the basic facts of the situation and b) the Senate’s role/participation in oversight of Athletics. I doubt this issue is going away soon.
For that matter, it would be terrific if similar 1-2 page writeups – perhaps on an annual basis? – could be provided on the website for other University-level committees where the Senate has a member participating.
Anyone thinking carefully about the issue would agree that Athletics provides value to the university and Pullman. Opinions will differ on whether the value is worth the cost. To me the real discussion is not whether or not to have an Athletics program, but rather “right-sizing” Athletics and minimizing any potential future financial risks.
Thank you again for the note and for your service to the Senate. -JC