Oregon State University and University of Oregon sports finances in the red

This story has absolutely nothing to do with the MEAC and SWAC -- other than the economy that impacts Oregon and Oregon State sports program is the same economy that impacts Texas Southern and Delaware State athletic programs. Add the recession, which has affected state appropriations and private giving at most colleges and universities, and college sports, especially HBCU sports, faces unprecedented economic challenges. So, if these guys are in the red, where does your favorite university stand on the sports financial radar?

Let's be truthful here--on the financial status of all athletic programs--playing big-time college sports is, on balance, a money-losing enterprise. Based on the October 2009 report, 2004-08 NCAA Revenues and Expenses of Division I Intercollegiate Athletics Programs Report, on the Football Championship Subdivision level (Division I-AA), there was a less visible gap between haves and have-nots, because not a single athletics program had positive net revenues in 2006. The median net loss for the 118 programs at that level was $7.1 million, although programs generated as much as $15.2 million in revenues and spent as much as $34.9 million, far above the medians of $2.3 million and $11.4 million, respectively.

Among the remaining programs in Division I -- those that don't play football at all -- all 94 had expenses that exceeded their generated revenues, and the median net loss was about $5.8 million (See NCAA.Org. Table below).

	Median Total Revenues	Median Generated Revenues	Median Total Expenses	Median Net Revenue (or Deficit)
Football Bowl Subdivision	$35,400,000	$26,342,000	$35,756,000	-$7,265,000
Football Championship Subdivision	$9,642,000	$2,345,000	$9,485,000	-$7,121,000
Division I -- no football	$8,771,000	$1,828,000	$8,918,000	-$6,607,000

In November 2009, a story was published regarding the University of New Orleans. It appears the university has been operating off a borrowed future. After Hurricane Katrina, athletics officials had obtained a waiver from the NCAA to field less than the required 14 teams and operate at the Division I level for five years. Beset by financial woes in the range of -$6 million, reduced funding and budget cuts across the university, and expectant fund raising "did not materialize" the donations expected, the Privateers had to turn to its students to cover the gap in athletic funding.

However, in a campus-wide referendum, the majority undergraduate student population rejected a proposal to increase UNO student fees to cover the $1 million annual subsidy to athletics in the $5 million athletic operating budget. Unless some big donor can be found, it appears the Privateers will be moving to Division III, in order to run a more cost-effective program.

More recently, Mississippi Valley State University could not schedule a money game with Texas Christian University for the 2010 season, because the Delta Devils football program cannot fill the 63 scholarships allotted to Football Championship Subdivision (formerly, 1-AA) teams. The Delta Devils had to settle for a date with defending MEAC champion South Carolina State University Bulldogs, a far cry from cashing into a big pay day in the range of $300,000 to $600,000 for a date with an FBC or 1-A program.

In the four years that Winston Salem State University moved on its path from Division II membership to Division I with the Mid-Eastern Athletic Conference, the Rams racked up a -$6 million deficit. After careful study in 2009, the Rams further realized that the projected gaps could mount as high as -$15 million by Fiscal Year 2012, if they stayed the course to NCAA Division I membership.

WSSU was basically financing their move to the bright lights of Division I on the backs of their students. At a cost of $579 per student, their athletics fee is among the highest in the University of North Carolina System--but one of the lowest in the MEAC, the Division I league the Rams had joined in 2005.

In February 2009, the State University System's Board of Governors made the right decision and rejected a WSSU proposal to increase the student fees for the athletic program. This effectively killed any hope the Rams had of raising additional revenue by using the easy street method. It was noted that Officials at WSSU had been diverting funds from elsewhere in the university budget to cover the athletic budgetary gaps, which came at the expense of the academic needs of the university.

The Rams have now moved back down to Division II and rejoined their previous conference, the Central Intercollegiate Athletic Association (CIAA). It remains to be seen if Winston Salem State will drop any of its 14 sports teams to address the deficit from its ill advised move to Division I. WSSU has a new athletic director in William "Bill" Hayes, who proved in the past two years at Florida A&M University, that he is not a fundraiser. He was hired at Winston Salem State on January 1, 2010.

Last month, Hayes unveiled the $1,000 Horns Club, a fund-raising effort he had moderate success with as the A.D. at North Carolina Central University, before the economic recession. He attempted the same program at FAMU and had little -- if any success with this program.

Now, the rest of the story...

Oregon State University Reser Stadium (Corvallis, OR) record capacity is 46,319.

Despite winning football seasons in recent years, sports finances for Oregon State University and the University of Oregon both fell in the red by the end of the last fiscal year, according to a report the State Board of Higher Education's finance committee will review Friday. Oregon State intercollegiate athletics' ending balance, what the board calls working capital, was $5.9 million in the hole as of June 30, 2009, and the University of Oregon's sports programs posted a $642,000 deficit.

State Board policy requires universities to keep their ending balances positive. The board probably will ask administrators from each university to come up with a plan to bring working capital, current assets minus liabilities, into the black. Athletics finances for the state's five other universities all showed positive ending balances for 2008-09. After making headway in 2008 on a four-year plan to wipe out its athletics deficit, Oregon State University lost ground last year in part because of the recession, donations that flowed 20 percent below expectations and a timing glitch that forced the university to wait until this fiscal year to collect on $1.9 million in pledged contributions, said Mark Spencer, associate athletic director for business operations.

In the 2007-08 school year, nearly 80 percent of major athletic programs reported operating deficits, with programs in the red losing an average of $9.9 million, according to the National Collegiate Athletic Association.

If the university could have collected the $1.9 million last year, it would have had only a slight dip deeper into the red, he said. "We won't have that problem this year," he said. The university also has set a goal of expanding its donor base from 6,000 people to 12,000, said Todd Stansbury, executive associate athletic director. "Fund raising ends up being key in our success in balancing the budget," he said, "but also the one (factor) most affected by the economy.

The University of Oregon Autzen Stadium (Eugene, OR) record capacity is 59,597.

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