AN UNEXPECTED CHALLENGE: Making Choices for Fiscal Fitness – WBCA September, 2009

Reflecting on the economic upheavals of this past year Jim Isch, Chief Financial Officer of the NCAA, said, “I think a lot of us thought and were told the sports industry was recession proof. We’re finding out that it isn’t. It’s going to suffer the same impact as many other areas.”

This “re-visioning” has demanded painful budget decisions on national and local institutional levels – from reduced tournament fields, readjusted schedules and travel plans, to furloughs and the elimination of programs. “You hear athletic directors and coaches say it’s the hardest thing you’ve ever had to do,” reflected Dr. Robert Corran, Athletic Director at Vermont where, in the face of a $1.1 million shortfall, the University discontinued their baseball and softball program. “Until you’ve done it, you don’t really appreciate that it really is. This is the exact opposite of what you do. What you do is provide opportunity and increase student-athletes’ opportunities. To be in the position where you’ve got to take opportunity away is almost the antithesis of who you are professionally.”

Though institutions may have different financial resources, all are being tested. Said Nancy Fahey, coach of Washington University (MO), of her colleagues and students: “They are not immune to what’s going on in the country. They understand it and know that we are making adjustments.”

Fortunately, there’s been an open line of communication between the coaches and administration. “What I like about it is that it’s a team effect,” she said. “It’s not like, as coaches, we’re feeling, ‘this is out of our control.’ I know that when somebody asks me about my budget, it’s very reasonable to say, ‘we are not going to take that extra trip,’ or ‘we’ll have to look at our travel size squad.” And, she added “to me, in the big scheme of what’s going on, I’m looking at this like we’re very fortunate. We have to remember that.”

Many athletic programs have used budget discussions to clarify and strengthen their goals and priorities. Faced with an attention grabbing 10% reduction ($338,000), Minnesota State-Mankato’s Athletic Director Kevin Buisman started with a survey. “We asked [coaches] to carefully evaluate everything they did from recruiting to travel to staffing to marketing to support services,” said Buisman. “They were always good stewards of the resources, but I think it’s the first time that they had to be really thoughtful about the budget. ‘Do I value scholarship support or staffing support more?’ That’s a hard question. I told them, ‘these aren’t easy times and there are going to be some difficult decisions. It should be challenging for you to sort that out.’”

“You can attack [deficits] either from the revenue or the expense side,” he explained. “Just cutting expenses is a lot less work. And it was going to be much more difficult to maintain the level of success we’ve enjoyed. So, we brainstormed on revenue generating possibilities: Were there some opportunities where we could invest — not cut, not maintain, but actually taking resources from one program, reinvest them in the others and create new revenues to support other programs? It was a little more balanced approach than to say, ‘let’s just cut these expenses and be done with it.’”

Anticipating cuts, Mark Massari, AD the University of California-Santa Barbara, said, “This is my philosophy: the entire department will have to tighten up. Women’s basketball, men’s basketball, swimming, marketing. Everything. There is a resolve that we have to have,” he explained, “that we are going to keep advancing our programs. Recession or not, there’s a cost to success. We’re going to be one of those schools that resolve to get past this year or two with that ‘let’s all pitch in together, take a piece off our budget and not cut anybody,’ attitude. At the end of the day, that will make us a better and stronger program.”

One of the conundrums facing schools is professional development. “It’s one of the easiest things to cut, yet it may be one of the most advantageous investments for a program,” acknowledged Corran. So, when Vermont was forced to eliminate funding, they created an in-house program. “We are asking each of our coaches, ‘what areas do you feel you have the most expertise in and will you share that with your colleagues?’ In some ways,” he reflected, “those kinds of professional development opportunities can be much more rewarding. You not only have people receiving good information, you’re doing a lot for the person presenting as well.”

Schools may have to rework their relationship with corporate sponsors. “In some areas, particularly at the Division II level and some of these smaller markets,” explained Buisman, “there was a blurring of the distinction between what was a marketing investment versus philanthropy — where they were just doing it to be a good community citizen. Were they getting a great value or return on their investment by having signage in our arena? The next time those [contracts] are up for renewal, you’re going to have to demonstrate that.”

Corran hopes future budgets avoid the “keeping up with the Joneses” syndrome. “It’s much more about understanding who your institution is, what is important to you and what is important to your student-athlete. It’s about becoming unique,” he explained. “If you really think that through, you’ve got a much better chance of not getting caught up in thinking, ‘they’re spending $5 million so we’ve got to spend $5 million.’ If you’ve got the right idea that costs $500, you’ll be a lot further ahead.”

Recognizing the challenges faced by its membership, the NCAA has taken several steps in order to provide relief. The most obvious action was the dues holiday for all three Divisions. Additionally, the Finance Committee set a target of $4 million budget reduction with a goal to distribute that savings to their institutions. After cuts in print jobs, overnight shipping, staff travel and the more instinctive use of video-conferencing, “I can tell you that we will not only meet our target,” said Isch, ”we’ll most likely exceed it.”

The NCAA has also asked all the Division I cabinets and committees to look at ways the Association’s rules and practices can be changed to save money on campus. “In September we’ll have a series of meetings in Indianapolis where we will gain greater clarity as to what they might be recommending. In October, the Division I board will take action on those recommendations.”

Equal care is being paid to the cost of running championships for all Divisions, said Joni Comstock, Senior Vice-President of Championships. But, as discussions target charter and domestic flights, luggage limits and driving distances, the guiding principals remain unchanged: “We cannot compromise the experience of the student-athlete and we cannot compromise their health or safety,” said Comstock.

Whatever the pressures, “we can’t forget about the 400,000 student-athletes who are living out a dream in our arenas and in the classroom. Ultimately, I have confidence in our membership – in coaches and administrators, that we’ll make changes and cuts that are fair. There will be reductions, but we will be able to preserve opportunities for all deserving men and women.”

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