<p>Cal-Berkeley</a> faculty vote an end to sports subsidies - NCAA Football - SI.com</p>
<p>The article says the vote is symbolic, but I would think it will carry some weight.</p>
<p>Sorry if this has been posted already.</p>
<p>Cal, a public university, is faced with many of the same issues our public K-12 schools. State based budgeting tends to address funding across the board, rather than site specific. First to be hit are the arts, then sports, then academics, then the administration. Maybe this vote will result in a more effective discussion as to how best spend budget dollars.</p>
<p>I’m sure Berkeley’s plays and musical performances are all self-sufficient too…</p>
<p>I have to say, I think this is wrong-headed. What faculty and others really resent is the big money it takes to run a big-time football program. But football at Cal as at many NCAA Div I schools is a net money-maker—it’s not subsidized, it subsidizes other sports that don’t produce revenue of their own. So when they’re talking about “ending sports subsidies” they’re not really talking about ending football, which isn’t subsidized. Instead they’re calling for an end to non-revenue or low-revenue sports like crew, cross-country, track & field, gymnastics, swimming, tennis. To me these are a quintessential part of the college experience, and these sports provide athletic scholarship opportunities to a lot of truly deserving student-athletes. People like Olympic gold medalist and world record-holding swimmer Natalie Coughlin, who proudly represented Cal and the United States in the 2004 and 2008 Olympics, becoming the first U.S. female athlete to win six medals in a single Olympics—and who earned her BA in Psychology at Cal in the process. Throughout her childhood, Natalie dreamed of swimming for Cal. Imagine if the next generation of world-class athletes growing up in California never get that chance. Then again, I suppose they could go to Stanford. But Cal would be the poorer for it.</p>
<p>I would be more about ending subsidies to programs that add little economic value to the state of California.</p>
<p>The text of the resolution that passed (pdf):</p>
<p><a href=“http://academic-senate.berkeley.edu/meetings/documents/Intercollegiate_Athletics_resolution.pdf[/url]”>http://academic-senate.berkeley.edu/meetings/documents/Intercollegiate_Athletics_resolution.pdf</a></p>
<p>Summary: the Division of Athletics at Berkeley is supposed to be self-supporting, but it isn’t. All students have to pay an athletics fee, and the University has to pony up a subsidy, which has lately been around $10 million a year, but which will be about $13.5 for last year and more for this year. </p>
<p>Now the Athletics Department is renovating the football stadium, at a cost of $321 million, and building a training facility for athletes only, at a cost of $136 million. They are borrowing this money and the University has to back the debt. The Athletic Department claims they will pay back the money without help from the University, but as the Athletic Department is already in the red, this claim is implausible.</p>
<p>Meanwhile the rest of the faculty have “furloughs” (basically, salary cuts). Should Berkeley professors take salary cuts so the football stadium can be renovated?</p>
<p>bc is correct. The Academic Senate is blinded by Tedford’s contract. Yes, he is the highest paid public employee in the state. (But, as the joke goes, he had a “better year” than the Governor!)</p>
<p>Cal football and basketball (men’s) contributed $12 million net to the Universities coffers last year (reporting period). The sinkhole of athletics is every other sport, including every women’s team.</p>
<p>So, CF, the stadium can easily be renovated and stay cash positive.</p>
<p>Really? The proposal says the annual debt service is $19.52 million during construction and $62.48 after construction is completed. How does $12 million pay off $19 million, let alone $62 million?</p>
<p><a href=“http://www.universityofcalifornia.edu/regents/regmeet/sept09/gb2.pdf[/url]”>http://www.universityofcalifornia.edu/regents/regmeet/sept09/gb2.pdf</a></p>
<p>Two ways: 1) change the debt service from a 10-year amortization schedule, to 30+… But, more importantly, </p>
<p>2) the Athletic Department is in the process of raising $250 million from private donations. Now, we could assume that they won’t be successful raising the full amount, but whatever they do raise will pay off that amount of bond indebtedness. OTOH, the AD could be extremely successful and raise more than the cost of the construction…</p>
<p>btw: yes, the $250MM is not the full cost of construction but, by law, the University/State is on the hook to upgrade public buildings to make them more sound against earthquakes.</p>
<p>I’m also skeptical of the claim that the football team returned $12 million to the University last year. Here are the financials for 2003-2004.</p>
<p><a href=“http://academic-senate.berkeley.edu/meetings/documents/Intercollegiate%20Athletics%20spreadsheets%20FY04-10.pdf[/url]”>http://academic-senate.berkeley.edu/meetings/documents/Intercollegiate%20Athletics%20spreadsheets%20FY04-10.pdf</a></p>
<p>Notice several things. First, the entire revenue for the football team was $12.7 million. Second, the operational cost for the football team was $10.8 million. Third, check out the “Non Program Specific” column. $2.2 million for marketing. Judging by the ads I see, that’s mostly marketing for football and basketball. I live in the area, and I don’t see ads for Berkeley water polo or crew. So the alleged $1.9 million surplus for football is a bit high. </p>
<p>Also, notice the ticket revenue for football. $3.5 million. That was in 2004, so it’s probably higher now, but the notion that Berkeley football revenue, $12 million in 2004, is going to rise enough to pay off a $60 million yearly loan repayment, as well as paying its own expenses, is preposterous.</p>
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<p>Which they were planning to do for $18 million before the idea of the $321 million renovation surfaced.</p>
<p>^^ Those 2003-04 figures are badly out of date. Total revenues for Berkeley’s athletic department (excluding subsidies) are now running around $50 million/yr, or around 50% higher than in 2003-04. </p>
<p>Still, that’s only about half what a school like Michigan brings in. Their total athletic department revenues are around $94 million, of which $38 million comes from ticket sales (90% from football, most of the rest from basketball and hockey; all other sports bring in less than $200K combined), another $18+ million from conference distributions of TV contract revenue (about 80% football-related), the rest from corporate sponsorships, licensing royalties, annual gifts, concessions, parking, etc, again the vast majority of it football-related. Michigan is also doing a major renovation of the Big House, with the bonds to be repaid 100% from Athletic Department revenue including a big boost in football ticket revenue from additional seating and the addition of luxury boxes.</p>
<p>Cal’s athletic department does seem to be in pretty rough financial shape in comparison. I understand the frustration of the rest of the faculty, but frankly I don’t see how they get out of it short of eliminating all non-revenue sports (i.e., everything EXCEPT football and basketball) or shutting down the football program and leveling that old, decrepit, and increasingly dangerous dog of a stadium. Or both, because without football, the other sports would continue to run a large deficit. Renovating the football stadium, upgrading practice facilities, and building a successful first-class football program is their only hope to get the Athletic Department into the black. It’s a gamble, and it may not work. But if you pull the plug on that effort, I don’t see how Berkeley could afford to have any intercollegiate athletic competition whatsoever, in any sport.</p>
<p>bclintonk, have you got a cite for your figures? The 2004 ones were the only ones I found. </p>
<p>Berkeley’s athletic program is currently in the red. Although I haven’t seen this year’s figures, I’m willing to believe that the football team is making money, maybe $5-15 million a year. However, borrowing almost half a billion dollars and hoping, hoping that you’ll make up enough money to pay off the nearly billion dollars of principal and interest, plus make enough to subsidize the other sports, does not seem to be a gamble worth pursuing. The upside is speculative, and the downside catastrophic. This is NOT a good way to risk our tax dollars.</p>
<p>Cutting back, as the academic side is doing, is the prudent course.</p>
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<p>That’s a fair point. Dunno the numbers, but the AD claims that they are ahead of schedule selling seat licenses for construction. Of course, the alternative is to shut down ALL sports. If football does not exist, the athletic department deficit will only get larger, or all sports will have to go.</p>
<p>Memorial Stadium is ~90 years old, and in massive need of repair – not only seismic upgrades, but compliance with state and federal codes such as the disabilities act. Either it gets fixed, or torn down. The latter also costs money, and eliminates a venue for sports, which would have to be built elsewhere, or the sports eliminated.</p>
<p>updated numbers: Direct revenue from football = $27.9MM, direct costs = $15.4. Football tickets alone = $11 MM. Annual donations to the AD totaled $11MM in 2008, which easily covers debt service of a longer-term bond. (page 11)</p>
<p><a href=“http://academic-senate.berkeley.edu/meetings/documents/Intercollegiate%20Athletics%202009%20FAQ.pdf[/url]”>http://academic-senate.berkeley.edu/meetings/documents/Intercollegiate%20Athletics%202009%20FAQ.pdf</a></p>
<p>fwiw: Haas Pavilion was rebuilt with more than 2/3rds private money: "Of the $57.5 million final price tag, $41 million came from private gifts, with $16.5 million coming from a combination of revenues from the Athletic Department, a campus seismic safety fund and miscellaneous income funds. "</p>
<p>Here are some slightly different budget figures, from a blog by a professor who is clearly intent on cutting off athletic subsidies:</p>
<p>[Intercollegiate</a> Athletics UC Berkeley Budget Crisis](<a href=“http://www.k-grayengineeringeducation.com/budget/?page_id=16]Intercollegiate”>http://www.k-grayengineeringeducation.com/budget/?page_id=16)</p>
<p>My favorite part of the letter in bluebayou’s link is this, on page 2: “Campus funding
(including registration fees) accounts for the remaining 11 percent ($7.68 million in FY08-09) [of revenues for the Department of Athletics] and that figure will be reduced by over 20 percent, to $6M for FY 09-10.”</p>
<p>And yet, when you look at the table just above that, you see that the “reduction” is phony. They’re projecting a $5.8 million deficit. Which the university will have to pay off. The real subsidy for FY08-09, using their own figures, is $13.6 million.</p>
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<p>Or perhaps they could think of some way to not spend $128,000 per athlete per year. Just possibly they could figure out a way to spend less than that.</p>
<p>I love college sports and hope they remain part of the fabric of every university. I do not believe the teams really make any money and do not buy the argument that the football and basketball team support all the non-revenue sports. Every college football team that generates more revenue than expenses takes that additional revenue and pumps it back into the football program. Even programs that lose money take windfalls from unexpected bowl games and use it to give some perk to the football team.</p>
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<p>Sure, they could drop to D-III, but that is the nature for another discussion. :)</p>
<p>Don’t forget that for OOS athletes on scholarship, the AD “pays” $50k just for tuition and room and board…</p>
<p>Cal-Berkeley faculty vote an end to sports subsidies…</p>
<p>…and instead give the money to them. That’s the part the article left out.</p>