Fumbling the budget — Majority of UI students believe athletics is profitable when it’s at a $1 million deficit

If you ask most University of Idaho students if the athletics department is profitable, they would probably say “yes.”

They would be wrong.

Illustration | Blake Coker

Not only is the UI athletics department not profitable, it is subsidized more than 50 percent by the state and the university. The department is subsidized about $8 million, with program revenues making up $7 million of its $15 million budget for fiscal year 2017. It is also running at a projected deficit of $900,000 to $1 million, said Vice President of Finance Brian Foisy.

Foisy said many factors resulted in the deficit, the biggest of which being the loss of more than $500,000 in game guarantees. Other components included a loss in donations of about $320,000, which could be attributed to the decision to move to the FCS conference, and a lower amount of student fees supporting athletics due to a decline in enrollment, he said. Although, overall student enrollment actually increased this academic year by 3.6 percent, according to the UI Fall 2016 Enrollment Report.

And yet, a majority of students believe the athletics department is profitable, said Zachary Lien, a junior who spent six months compiling research on the subject. Lien surveyed more than 1,300 UI students and found about 62 percent of them believe the program is profitable without subsidies.

In reality, very few collegiate athletics programs across the country are profitable, Foisy said. But the assumption that the UI athletics department makes money for the university is not a thoughtless one to make. According to Lien’s report, university officials have perpetuated a false narrative that athletics is a profitable enterprise for at least 10 years.

Lien said the argument that the department was profitable became a common defense when the program was questioned. In a 2012 Argonaut article cited in the report, former Senior Associate Athletics Director Matt Kleffner used the argument while discussing student fees in relation to collegiate athletics.

“Not only do we write a check back to the university, but we bring in money from all the other student athletes — we bring in a lot of money to the university,” Kleffner said in the article.

In 2014, Director of Athletics Rob Spear said athletics generates revenue for the university in the form of tuition and fees paid by student athletes. But in Lien’s report, Spear said he could no longer make that argument.

“The subsidies will be greater than any payments made back to the institution,” Spear said in Lien’s report.

Spear was not available to comment to The Argonaut on Lien’s report.

Foisy said he is not sure why officials would claim athletics was profitable. Perhaps the people propagating the narrative used the term “profit” loosely, or even misused the term entirely, he said. However, Foisy said the athletics department does have an economic impact on the community in the amount of an estimated $34 million.

Lien said this figure likely comes from a 2011 report from economics professor Steven Peterson. Peterson told Lien that parts of the $34 million total were based on speculation. The report was not subject to academic review, Lien said.

Despite the common misconception that athletics is profitable, the program still has a projected $1 million deficit that the university aims to fix. In February, Foisy met with the Idaho State Board of Education (SBOE) to request the cap on institutional support be raised from $949,500 to $1,949,500 for the next four years to fill the deficit and to help ease the program’s transition from the FBS to the FCS.

Institutional support is one of the subsidies that comes directly from UI reserves, Foisy said.

“If SBOE approves this request, the cap would rise to $1,949,500 for the next four years, which would result in $4 million dollars of institutional support that could go to academic pursuits and institutions to, instead, go to UI Athletics,” Lien said in his report.

The SBOE delayed approving the request until the next meeting — which will be held in Moscow April 19-20 — because Foisy did not provide enough detail on what the university’s plan to fill the deficit would be if the request to increase the institutional support cap was not approved.

At the February SBOE meeting, Foisy said the athletics department proposed increasing student fees, which would help fill the deficit. The department proposed increasing fees by 3 percent, although the student fee committee only approved increasing student fees by 1.2 percent for athletics.

In the survey Lien conducted, he found only 5.8 percent of students want to increase student fees for athletics. That number dropped to just 2.7 percent when considering the students who knew athletics was not profitable.

Growing enrollment is a high priority for university administrators, and athletics is seen as helpful in this regard. Faculty Senate Chair Liz Brandt said athletics is a strong recruitment tool for the university in an interview with The Argonaut. But Lien found data that contradicted this claim.

When conducting research for his report, Lien said he found a study on the relationship between collegiate athletics and recruitment. The study found when collegiate athletics programs are extremely successful, it can have a positive impact on the number of applications the institution receives the following year — it’s called the “Flutie Effect.”

Lien said recent examples of the Flutie Effect happened with two of UI’s neighbors — Boise State University and Gonzaga University.

“Right now, Idaho is in the very interesting situation where the nearest football team and the nearest basketball team both were achievers of the Flutie Effect,” Lien said. “We really want it bad.”

Though this phenomenon is real, it is incredibly rare, Lien said. The same study also found that the same increase in applications can happen if tuition decreases by 3.8 percent or if the mean faculty salary increases by 5.1 percent.

UI President Chuck Staben said athletics also contributes to the university in the form of alumni donations.

“(Athletics) has roles in generating revenues that don’t come back to athletics,” Staben said. “So it certainly is a way we engage our alumni. And some of those alumni will donate back to athletics, but some of them will donate back to other things at the university.”

However, in researching academic literature on the subject, Lien found there is little correlation between the prominence of collegiate athletics programs and alumni donations. He said alumni donate significant sums to the university, but he saw no evidence that donations to academic programs are linked to the athletics program. The donations due to the success of athletics are often restricted to athletics, he said.

Foisy said athletics also influences the sense of identity people have at UI, and provides students and others in the community with a connection to campus. Beyond that, he said the program offers entertainment opportunities for residents.

“Let’s be honest, we’re in Moscow, Idaho, right? It’s not like there are a million other things that you might pick from,” Foisy said.

Lien wrote the report — not with the intent to damage UI athletics — but with the hope that it would raise awareness and increase transparency from the university. He said he encourages students who feel strongly about the issue to get involved.

“Put simply, you do not have to be an ASUI President or Senator to affect change at the University of Idaho,” Lien said in his report. “It takes the thought, contribution, and activism of typically uninvolved students to prompt real change.”

Erin Bamer can be reached at arg-news@uidaho.edu or on Twitter @ErinBamer

Read Lien’s full report here: Vandalized Perception (1)


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1 comment

Brad

03.28.2017 - Reply

Administration might say this is the eventually reality of the University attempting to exists in a world of have and have nots but that is not the case. The total loss of revenue is associated with administrators decisions and not “the times” or however it is referred to. Athletic Director Rob Spear got rid of a “pay day” game to appease the sun belt conferences demands for one pay day game. Playing Auburn or LSU, Florida and Penn State may have caused the University headaches on the football field but those payday games balanced the books and gave the football team exposure. One day you are losing by sixty and then your competing with powerhouses as we have learned from teams like Houston and Western Michigan.

The Decision, as we like to call it, was a sure loss of revenue; as a supportive minority stopped donating, stopped attending games, and stopped doing what they could to ensure revenue growth. Administration says that there was a 300,000 loss but I believe that it was more than that. The University had to have calculated the loss but believed that the FCS supporters would do their part. The FCS supporters or glory days, Big Sky fans, have never done their part and they never will.

Not to kick them while they are down but the enrollment growth can also be contributed to dual enrollment high school students who are not charged the fees used for athletics like regular students are.

The answer is a very simple one. If you want to balance the budget for the FY 2017-18 season. Stay FBS and the supporters will come back money in hand. We will schedule Florida State, USC, Indiana, Penn State, and even play WSU. We will scrap and claw our way through whatever it takes to manage an independent schedule until something else presents itself. Or Administrators can sugar coat things until the inevitable happens and a sport or two is cut.

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