UH Sports A Losing Proposition

Steve Murray
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Wednesday - April 13, 2011
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Gary Cunningham’s review of the University of Hawaii athletic department finances was both a blessing and a curse.

Cunningham, a former athletic director at Fresno State, UC Santa Barbara and Wyoming, came to the conclusion the department is well-run - that’s the good news.

He also said its financial problems are unlikely to go away anytime soon - that’s the bad news.

Cunningham, who was paid $10,000 for his report, recommended the school forgive the $9.5 million athletic department debt plus create new revenue streams that range from the obvious (getting a portion of parking and eliminating the Blaisdell’s first refusal, which would allow Stan Sheriff Center to host concerts) to the never-likely-to-happen (adding luxury suites to the SSC).

As reported in the Honolulu Star-Advertiser last week, the report stated “there is no way for the athletics department to be competitive in Division IA athletics in the future unless budgeted expenses are increased and the university accepts the fact that to be competitive there will be an annual generated net loss.”

That’s a terrifying sentence for a university bogged down with a couple hundred million-dollar maintenance backlog, reduced class availability and an academic staff exhausted from budget cuts. With an expected cut in funding to the university from the state, adding yet another bill would be a tough sell for all interested parties.

“If someone wants to donate $10 million to the athletic department that would be great, but otherwise where would it (the money) come from?” asked David Duffy, a professor of botany at UH. “We have one building closed. We have a couple others, if one more elevator breaks the building can’t be used for classes because of American with Disabilities Act issues.”

Duffy said solving the athletic department’s financial woes will depend on finding a balance that satisfies not only coaches and professors, but elected officials and the general public.

“Some people would say getting rid of athletics is like getting rid of Latin. Both are character-building, and there are a lot of people who have no use for Latin. But for those who take it, it is really useful, just like sailing is to others.”

Cunningham’s recommendations should come as no surprise. Few athletic departments are able to operate without some assistance from the university. According to the NCAA Revenues and Expenses of Division I Intercollegiate Athletics Programs Report Fiscal Years 2004, 2005 and 2006, only 19 Football Bowl Subdivision (D-1) schools generated revenue that exceeded expenses for fiscal year 2006. What is missing in self-generating revenue is often made up for by contributions from the school’s general fund. This amount of athletic budget assistance represents, on average, approximately 5 percent of total institutional expenses, says the NCAA.

Even if the university is able to generate the needed funds, it wouldn’t guarantee future financial stability. College athletics is a poorly run business. Like the many of teenagers who make up a large part of college rosters, athletic administrations spend with little concern for the future. Again, going back to the NCAA report, the median generated revenues for FBS school increased 9 percent from 2005 to 2006 and 16 percent from 2004 to 2006, but expenses over that time increased 15 percent from 2005 to 2006 and 23 percent for the two years from 2004 to 2006.

To be fair, not all the budgetary problems are because of the self-imposed arms race that has led to the uncontrolled spending. Unlike most businesses that can simply dump unprofitable subsidiaries, universities are saddled with many financially draining athletic programs because of federal and NCAA mandates. This is the point where Title IX opponents begin to flame with anger. But the ire is misplaced. Title IX did add to the department’s economic burden, but it is necessary and fair, so get over it.

If there is one thing the report clearly points out, it is that the athletic department is in a tough position. Expenses will continue to grow, and those charged with generating revenue will be hard-pressed to make up the difference. Cunningham said athletics director Jim Donovan is doing a better job than most of his WAC and Mountain West counterparts when it comes to generating income.

This isn’t an issue for one person. Maintaining a viable athletic and academic institution requires a statewide effort.

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