Interim financial report on football expenses

WKU University Senate

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• FOOTBALL FINANCES. 1991/92 . In part because the accounting system of the ath+etic department has grown more responsive, it is possible this year to give an interim financial report on the football s eason just endeq, alth.ough some of the figures-in particular, average ticket pricet and general fund support-must be based on estimates and calculated values. The picture that emerges is one of strenuous effort to achieve the impossible . Anyone who has been around the athletic offices lately must realize that they are run on a far from lavish scale. In every area but salaries, where the additi on of new assistant athletic directors has increased expenditures cons iderabl y, the overall athletic program is struggling to contain costs. Nowhere is this more apparent than in the football prog ram , but nowhere is it more futile. As Athletic Director Lou Marciani freely admits and the Commissioner of t he Gateway Conference said in a recent news article, Division 1M foo tball is expensive . Any school playing f ootbal l at this level must be prepared to subsidize its program heavily. Western's athle t ic establ i shment maintains the expense is justified, citing all the standard arguments-from publ ic relations benefits to promot i ng clean living--that were amply rebutted in a Senate report three years ago. No one has replied to this report . The coaches and a. d. 's doggedly reassert t heir habitual views without recognizing opposing arguments . The recent NCAA proposal to establish Division I AAA for football programs without scholarships might have allowed schools like Western to keep football but reduce the cost. Unfortunately, the proposal was defeated . Moreover, our athletic establishment says now that although Western voted f or the new division, we are committed to IAA and would not have played in lAAA even if it had been approved. Meanwhile, WKU continues to pour money into football. As the following tables Show, our efforts to contain costs kept expenditures essentially level from 90/91 to 91/92. Audited results are not yet in, but it seems so far as if football will stay beneath its budget this year, for the first time in memory. The team saved a bit on t ravel, but its greatest economy was not expending $30,000 budgeted for guarantees to visiting teams. Unfortunately, revenues were sharply down for the year, possibly because the team did not do well, but also because many fans were uninterested in games against our new conference rivals Northern Iowa and Eastern Illinois, spectacular bombs at the • ) • • turnstiles. Meanwhile, Marciani warns, t he wi de geogr aphical spread of the Gateway Confere nce means that travel expense s wi ll increase in the f uture, so t hi s yea r ' s t ravel savings a r e unl ik'ely to be repeated. The bottom line is that this season's footba l l expense s minus sales and other direct income increas e d by about $50,000 ove~ the previous year. Deducting sales and other direct i ncome ' from expenses lef t a bal ance for the year of $ 770, 000 t o b e c overed QY l} allocations from the year ' s student athletic and activity fees pool (football is cur rently al lotted 2 3% of this money); 2 ) institutional scho l a r s h ip funds, and 3) g eneral fund support . Act'ually, of cour s e , scholarshi ps come from the general fund also, so the last two items represent the amount of gene ral resources Western will devot e to f ootbal l for the year : $63 8 ,369, as opposed to $591,770 for 1990/91 , an 8% i ncrease i n institutional cormnitment. A couple of a dditional notes may be help f ul . The figures given here differ f rom ones circulated elsewhere primarily because athletic scholarships have been s wi t ched to a nona thletic a ccount in the university budge t , II Schol a r ships Ins t i t utional." This report puts them back where they used t o be, as an expense of t he athletic program. Secondly, in sever a l categories reported scholarship expenses for football in 1991/92 are oddly lower than fo r the previous year. This seems to fly in the face of i nflat ion. Western's 1991/92 Grants Budget lists lower t o tal s for food, books, and hous ing t han the audited figures for 1990/91 s how we re spent that year. In one case t he diff e renc e is large , a nd located i n a sensitive area. Food for t he 90/9 1 team cos t $175 ,000 . The budget for 91/92 projects this cost as $133,000, a de c rease of $42,0 00 , or 24%. The new figure, which works out to a pe r diem food a l l owance of as little as $7. 50 per p l ayer , s e ems unreal i stic. Possibly the expense is understated or Food Services is undercharging the team . In either case the item needs fur ther checking. Findings It will su rprise no one that in spi t e of genuine e f f or t s t o shave costs Wes t e r n continues to los e money playing Division lAA football. This year rev enues f ell , requiring an 8% increase i n institutional support for the program. And there are indications that scholarship money for foo t ball may be underbudgeted, which--if true--might lead us back i n t o the bad old pattern of yearly budget overruns. However, the pic t ur e is really bleaker than it appears on t he surface. A number of national report s have made it clear that the real costs of fielding an athle tic team are rarely reflected in i t s 2 • budget , e v e n when budgets include scholarsh i ps , which Western 's currently d o n ot . A large part of the maintenanc e, material s , and uti l ities expense f or the football stadium should be c ha r ged to the f ootball p rog ram . So should a significa n t portion of other budget s , such a s the athletic trainer's opera tion ($2 4 0 , OOO this year ) and t he athl etic office budget, which s oared from ~ l86 , OOO in 90/91 to $348, 0 00 currently. Taking a t h l et i cs I own r e v E;!:nue-allocating fac tor of 23% into account, t he s e last t wo items would a d d ano t her $13 5 , 000, or 15%, to the cost of I M f ootball a.t Wes t ern. Th is money, no t balanced by s a les, represent s a n addi t ional dip i nto general resources. No r d oe s the future l ook bright. I f anyth ing , increased t rave l cos t s and d ecreased fan interest assoc i a ted with Wes tern's entry i nto t h e Ga t eway Confe rence wi ll furt he r e rode t he football prog r am's balance s heet . While Dr. Marciani gamely ma i n t a i ns that t he marketing e fforts and budgetary oversight of his new a ss istant ath le t i c directo rs wil l improve the situat i on , his as s essment is h op e ful a t best . It's not that the p eopl e in ath letic administration- who are very good-or t he play ers -who are probably ver y good people - or even football-which is doubtless a very good sport-are at fault . I M football at a school with Western's res ources a nd tradit i ons is simply an extremely dubious undertaking. At a t ime of budg et scares, crowded classrooms, unders t a ffed d e par tme nts, and deferred maintenance con tinuing to compe t e i n lAA f ootball seems a h ighl y irres ponsible undert aking too . 3 Prepare d by J oe Glaser for t h e Fi nancial Affa irs Committee • FOOTBALL FI NANCES, 1991/92 91/92 Sales and Endowment Income Ticket Sales $85 , 188 ' Guarantees 25 , 000' Endowment Income 5,2 9 0 3 Sports Net wo rk 2,0003 117 , 478 Expenses Salaries & f ringes 338 , 010' Materials & s upp-l ies 85 , 8 8 73 Travel 5 6 , 500' Equipment 5, 0003 Scholarships 408 ,4 50' 8 9 3 ,8 4 7 Expenses minus Revenues 7 7 6, 369 Allocations and General Fund support Student fees X 23% 138,000' Scholarship poo l 408, 4 5 0 General Fund 22 9 , 9 1 94 776,369 iBobby Houk lFinancial Records Sys t em 3Barry Bri c kman 'Calculated 5Grants Budg e t , Pam Herri f o rd 4 90 / 91 101 , 383' 45 , 00 02 5, 000' 2, 000' 153 , 38 6 33 5 , 005' 69 , 6 62 ' 71 , 66 8' 3 9 ,2 05 2 3 75 ,2 23 2 890, 76 3 7 3 7 , 35 0 14 5 ,5804 375, 22 3 216 ,5 474 7 37, 350 . .. ~. , i. • • 23% decrease flat 5% i n crease • FOOTBALL ATTENDANCE, 1991 Arriving a t reliable figures on football attendance is diffi cult bec ause there are so many ways of getting int o a game a nd 80 many rates at which tickets are sold . Moreover , ' the ticket offi c e is rushed a t this time of year, accor d ing to Bobb y ~ouk, ticke t manager, s o that a firm audit of football sales i s not performed unt il well into the following s pring . No a udite? figures, even for ne t sales, are yet available for t he 199 1 season . Nevertheless, numbers can be arrived at wi t h a degree of confidence , a t least for paid attendance , and university estimates of t otal attendance at each home game are a vailable . In the foll owing tabl e , sales figures are unaudited numbers from the t icket office. Bobby Houk says these are "fai rly accur a te." Total attendance numbe rs come from the same source. These total attendance figures are estimates viewed with s kepticis m by many. Because there are several season ticket plans, rang i ng f rom $75 t o $16 as part of a family package , and because i ndividua l game tickets range f rom $7 to $2 for children, thi s report es timates the average price of a season ticket at $40 and the average price of a indi vidual game t icket at $5. Bobby Houk confirmed t he $5 es timate as reasonable, but couldn't say what the average value of a season ticket might be . So thi s estimate may be wrong. Factoring these estimates into Ticket Office sales figures shows tha t the greatest sales success of t he yea r wa s Wes tern' s opening game against Murray . About 1,200 seas on t i cket holders were eligible t o a ttend, whether they did or not, and a bou t 2, 200 individuals bought game tickets, for a paid a ttendance of about 3,4 00 . The of fi c i al attendance es t imate for t he day was 12 ,222, a much larger figure, but one that may be reasonable in view of student attendance and complimentary admissions over and above ticket sales. In contrast, the most dismal days of the year we r e the games against Northern Iowa and Eastern Ill inois - two of our rival s in the new Gateway Conference . The same 1,200 seas on ticket holders were eligible t o attend, but game sales ran only about 300-350 f or each game. Thos e games carne at the end of t he s eason, when the team had already l ost several times , but their low at tendance and sales may substant i ate what many fear, t hat lack of i nt eres t in the Gateway teams wi ll weaken Wes tern' s foot ba ll progr am even fu r t her in the future. 5 , • • FOOTBALL ATTENDANCE 1991 Season ticke t s ales Individual tickets $47,668 37,520 Individual sale s by game: Game 1 , Murray Game 2, Morehead Game 3, Middle Tenn. Game 4, Troy Sta te Game 5 . N. Iowa Game 6, E. I llinoi s 'Bobby Houk 11 , 028 5,13 0 8 , 025 9,921 1,639 1,777 37,520 # So ld' 1 ,192 7,50 4 2,206 1 , 026 1, 605 1,984 32 8 355 7,504 Est. Attendance ti 12 ,2 22 8. 1 80 8 , 068 10 , 980 3 , 228 4 . 124 46, 802 1calculate d on the basis of e s t imated values 6 " • PER GAME FIGURES Average sales and paid attendance < Sales nSold' Average Individual Ticket Sales: $6,253 1,250 Average Season Ticket Sales per game: 7.945 1.192 14 , 198 2 ,4 42 Average cos ts per Home Game, 1991 Overall Football expenditures per home game: $148,974 Football Program salaries per home game: $56,335 Football grants in aid per home game: $68,075 Football food grants in a id per home game: $22,1679 Football books grants in a id per home game: $2,042 Football housing grants in aid per home game: $11 , 900 Football tuition grants in aid per home game: $31 , 967 Number of hours Governor Nunn could be hired to consult per expendi ture per home game (less expenses): 1 ,000 ' Est i mated. " 'Next f our items a r e subsets o f total grants in aid; food cos ts may be Significantly underestimated. 7 -~_,"",,_'-K~S~7,l'l'l~ i iJ. ~ • 

Football Finances 1991/92

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Football Finances 1991/92

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