About how the UH Athletic Department will not be able to balance their budget over the next 3 fiscal years, a report by the auditor (Accuity LLP) wrote:
"In the near term, during the next two or three fiscal years, it is probably not realistic for Manoa athletics to self-generate enough revenues, at the current level of allocated revenues , to produce a balanced budget." (HA)
HA Note: "The auditor also "reiterated concern" about UH's "financial condition." Donovan forecast a $2.1 million deficit for just the current fiscal year."
About how he wasn't surprised with the deficit numbers released yesterday due to past briefings that JD gave them, Board of Regents chairman Howard Karr said that athletics is:
"working in one of the worst recessions that we've ever had. I think Jim is trying to do his job but there are certain things that I want to discuss with the regents (today) and we'll see where we go from there." (HA)
HA Note: "UH's financial plight has been the result of several factors, including declining ticket sales in its major money producers, football and men's basketball, a $716,000 loss in its investments and rising costs in travel, guarantees and salaries. UH said it tops the nine-member Western Athletic Conference in travel expenses ($2.78 million), is second in coaches' salaries and benefits ($5.6 million), first in staff and administrative salaries and benefits ($5.1 million) and has the highest student aid expense ($5.5 million). Meanwhile, Donovan told the committee that UH is the only school in the WAC that doesn't receive some form of student fees. UH has said that a $50 per semester student athletic fee would "generate approximately $2 million." Moreover, Donovan said, athletics receives none of the $400,000 in parking revenue he said its events generate and pays approximately $735,000 annually for student housing and shares only marginally in the sales of logo items.
In an effort to trim costs, Donovan told the committee, 17 positions in the department have been abolished or are no longer funded, saving more than $580,000 annually. He said ticket prices have been dropped in some areas for all events in an attempt to lure more ticket buyers. In addition, new and more lucrative concessions, TV and radio agreements have been negotiated and an additional $209,000 in revenue generated by securing parking at Aloha Stadium."
About how UH is limited in its options for cutting a sport to reduce the deficit, JD said:
"Sometimes people ask me, 'Can you cut a sport?' Because of Title IX and gender equity, we can't cut a women's sport unless we cut football. And if we cut football, we couldn't stay Division I. So that would leave on the table for us (men's) swimming, tennis, golf, baseball and volleyball." (HA)
JD said that out of the men's sports that UH could cut:
"the biggest (financial) loser for us right now is baseball." (HA)
About how baseball lost $659,899 during the 2007-2008 season, JD said:
"So, if you were looking at it just from a fiscal standpoint, you'd pick baseball. But then, we'd have seven acres down there (on the lower campus) that would have a stadium and wouldn't have a sport in it. And I would claim we're pretty much a football, volleyball and baseball state. So, there aren't any easy choices." (HA)
JD said that the other men's sports do not lose much money so cutting them:
"might result in a $250,000 savings a year for any one of those sports, so it wouldn't make a big impact on that ($2.6) million." (HA)
HSB Note: "UH was operating in the black through 2001, dropped into the deficit in 2002 and has fallen deeper since. The exception was the 2008 fiscal year, when revenue from the UH football team's appearance in the Sugar Bowl — approximately $2.4 million — gave the department a profit of $295,243. The department had about $28.7 million in expenses in 2008-09, a slight drop compared to the previous year's total of $28.8. Donovan noted that the department has reduced expenses by not filling vacant positions and cutting administration and support service costs.
Women's volleyball led the UH programs by turning a profit of $84,071 for the 2008 season. Football showed a $1.5 million deficit, though Donovan said football accounts for most of UH's pay-per-view revenue of $2.5 million, which would push the program into the black. In his
presentation, Donovan pointed out that UH was at or close to the top of the Western Athletic Conference in ticket revenue ($8.6 million) and fundraising ($5.2 million) for the 2007-08 year."
HSB Note: "Donovan said UH generated revenue by lowering ticket prices and providing family packages in selected sections."
About how they will have only selective price increases until they are able to sell out their games, JD said:
"The bottom line is we're going to try to keep the prices as low as possible but at the same time balance the need for more revenue for our budget. My philosophy is when seats are all getting filled up, then we can look at price increases. Until then we have to be very selective at our price increases." (HSB)
http://www.starbulletin.com/sports/sportsnews/20100218_Athletic_deficit_closing_in_on_10M.html
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