A Closer Look At The Cal Athletics Department FAQ On The Budget Crisis

Previously, we discussed a letter sent out to season ticket holders from Sandy Barbour, Athletic Director for Cal.  This letter was about the future of Cal athletics and the budget situation.  It also had a link to a FAQ (PDF) set up to answer some of the, well, as you might have guessed, frequently asked questions regarding the budget crisis. 

The purpose of these documents was to help communicate to Cal fans the facts surrounding the difficult decisions that she and the Athletics administrators had to make.  I certainly don't envy her for these difficult decisions.  Like many complicated and emotionally charged decisions, there have been many opinions on the matter.  Given that the FAQ was 9 pages single spaced, I wasn't sure how many people genuinely read through it and readers requested a bullet point summary

To help facilitate communication on this matter, I read through the FAQ and have attempted to summarize the key points, question by question, after the jump.  Hopefully, I accurately reflected the key points of the FAQ.  Should you believe I misinterpreted a section, do not hesitate to tell me in the comments.  Hope this helps people better understand the true reasoning behind the disastrous cutting of 4 sports and reorganization bureaucratically of another.  Many thanks to CalBear81 for working together with me on this post.  Her help was invaluable!  GO BEARS!

1.  What were the conditions that led to the decision to reduce the Athletic Department's program scope from 29 intercollegiate programs to 24?

It appears that the unfortunate fact is that Cal is receiving less and less money from the state to subsidize tuition. Last year, there was a 20% decrease in state aid. Apparently, over the past 19 years, when factoring in inflation, 50% decrease in state aid.

With rises in tuition, comes rises in scholarship costs. Scholarship expenses have risen 75% since 2004. Now, they are $10 million a year.

Cal's revenues have increased substantially, too, but it is still difficult to balance that budget. Cal has been trying to be as efficient as possible in their use of funds. They have been very successful, too. For example, they spend about $84,000 per athlete compared to league average $102,000.

In 2008, athletics was receiving approximately $7 million in support from University funds. However, with the economic collapse, it has gotten around $12 million recently in support from University funds. The Chancellor has decreed that the support amount must get to $5 million by 2014. This forces Cal athletics to make some difficult decisions.

 


2.  What were the analytical and decision-making processes that led to the decision?

 

Cal is doing everything it can to lower costs without having to cut teams. For example, they eliminated 21 non-coaching positions in the summer of 2010. This should save 2.1 million a year

However, after enacting almost all the recommendations in the Chancellor's report, athletics still needed to cut $4 million annually. They were faced with a decision. Either you cut all sports across the board or cut some totally. Athletics felt that cutting all across the board could hinder all of their abilities to compete and lead to a mediocre department overall. This did not seem to be a viable solution. The other option of cutting some totally seemed least worst.

Further, while looking at costs, Cal also had to be aware of the requirements of Title IX, the federal law which requires gender equity between men's and women's sports at all colleges and universities which receive any federal money.  Title IX requires:

1. Provide athletic participation opportunities that are substantially proportionate to the institution's student enrollment, OR
2. Demonstrate a continual expansion of athletic opportunities for the underrepresented sex, OR
3. Provide full and effective accommodation of the interest and ability of underrepresented sex.


3.  How did Title IX affect the decision and how with Cal remain in compliance with the federal law after the changes are enacted?

 

Previously, Cal was using the third prong, as stated above, to meet TItle IX. However, if they cut a single women's sporting team, the first prong would be triggered and Cal could be in violation of Title IX. That is bad.

The law requires that the teams are roughly approximate to the gender balance in the school itself, which is about 53% to 47% in favor of the ladies (hear that, guys, there's plenty of fish in this sea!).

So, after any cuts, the proportion has to stay roughly approximate. Further, Cal cannot cut football, basketballs, and volleyball. If they were to do so, they would lose Pac10 status.

In determining who to cut, they first looked at both direct and indirect costs. Indirect costs appear to be the upkeep of the fields, access to medical staff et al, that are not necessarily specific to the sport itself. Then, they looked at the roster size and gender. They also looked at this list:

History of competitive success
Ability to comply with Title IX and the principles of gender equity
Donor impact
Opportunities for NCAA and Pac-10 success
Contributions to student-athlete diversity
Student-athlete opportunities
Contributions to the Directors' Cup
Contributions to the Athletic Department mission
Prevalence of local and regional varsity competition

Apparently, athletics looked at every conceivable configuration of potential sports. It's kinda like a math puzzle, really. I guess in looking at all these permutations, the sports they chose were the least worst way to go.

 

4.  Is there a possibility that some or all of teams could be reinstated?

 

Yes, but would require massive increase in donations. Never say never, but athletics is not optimistic. Donors couldn't just raise enough money to save one or two of the more popular sports. They would need to raise funds to save most, if not all, of the teams, because of Title IX considerations. This could require a $70 million increase in the endowment in the short term (not defined) and $100 million in the long term (also not defined). This portion is a little confusing.

To avoid continued uncertainty, athletics has set a hard deadline of January 31, 2011 to determine if money can be raised to save teams. They want to give the people associated with the sports sufficient time to make appropriate transfer decisions. They don't want to keep people stuck around in a limbo until the summer time by which it would be too late potentially.

 

5.  What does the decision mean for rugby?

 

Except for change of command, nothing really. Athletics is working closely with team to make sure nothing really changes. You should all expect Coach Clark to continue coaching with the same distinction.

Why is rugby's status being changed? Isn't the team financially self -supporting and does it return $300,000 per year to the Athletic Department?

Actually, due to indirect costs and recent redirections of funds away from the annual fund to the endowment, rugby isn't as self-supporting as previously believed. This chart is provided in the FAQ and reproduced without comment:

Revenue/Expenses FY2006 FY2007 FY2008 FY2009 FY2010
Total Revenue $530,000 $540,000 $530,000 $480,000 $580,000
Direct Expenses $480,000 $550,000 $620,000 $680,000 $720,000
Net Gain(Loss) $50,000 ($10,000) ($90,000) ($200,000) ($140,000)
Note: This table captures only direct costs and does not include a wide range of allocated, indirect costs generated by the team in areas such as sports medicine, procurement and computer support, among others.

Cal expects to save approximately $300,000.00 per year with this bureaucratic change. Also, changing the status of rugby was necessary for Title IX math.


6.  What is the status of the proposal to elevate and privately fund women's rugby as a varsity program?

 

Coach Clark spoke often of his plan to promote women's rugby to varsity for Title IX purposes. However, there are several problems:

1. Few other varsity women's rugby teams out there. Eastern Illinois is the only one.
2. Increase in indirect costs.
3. Prong 3 of Title IX would be violated, because you'd be adding another women's sport when cutting 2 more. As a reminder, Prong 3 of Title IX is:

3. Provide full and effective accommodation of the interest and ability of underrepresented sex.


7.  Football is the most expensive teams to operate within the Cal program. Why wasn't its budget trimmed significantly before eliminating a number of teams?

 

Well, the answer here is basically that football makes the most. From 2005 to 2010, football netted about $7.5 mil a year. Ticket sales can raise millions (up about $5 million from 2005 to 2009) and increased football success leads to increased donations (about $5 more from 2005 to 2009).

To lower the investment in football could jeopardize not only the football program, but the entire athletics program. As football goes, so goes Cal athletics. gulp!

Further, they have lowered costs with football, including limiting those who travel with the team and busing to UCLA in 2009. I hope they played bus rugby.

They have this chart, which I will reproduce without comment:

Football Revenue/Expenses FY2005 FY2006 FY2007 FY2008 FY2009 FY2010*
Operating Revenue $17,237,285 $18,496,045 $26,096,651 $27,930,626 $27,760,869 $24,421,437
Operating Expenditures $13,891,277 $12,590,098 $17,312,281 $15,367,990 $19,136,396 $18,519,523
Net Gain $3,346,008 $5,905,947 $8,784,370 $12,562,636 $8,624,473 $5,901,914
*unaudited figures


8.  In its report, the Chancellor's Advisory Council seems to suggest a number of alternatives to reducing the size of the program. Were these options explored? Why wasn't the council's advice followed?

 

There is not a lot of new information in this section. Basically, the Council didn't say which recommendations to follow. Also, Cal followed almost all of them and was still short on the amount necessary to cut. So, further cuts had to be made.

 

9.  Cal Athletics data indicates that resources for student-athletes were stretched thin before the recent decisions. Given the recent success of the department as a whole, why was this a problem that needed to be addresses and what steps are being taken to rectify the situation?

 

Recently, life for Cal athletics has been good. Graduation rates are at an all time high. 11 National Titles since 2005 and 17 medals at Beijing.

However, there are staffing problems. In the Pac10, Cal is 7th in sports medicine staff per student athlete. Cal is 8th in strength and conditioning staff per student athlete. Cal is 10th in overall staff per student athlete. This is relative to the fact that Cal, I believe, has the 2nd most sports in the Pac10 (behind Stanford). No matter how you cut it, this was just unsustainable. I guess Cal cannot just hire more staff (remember they fired 21 non-coaching staff in the summer of 2010), so these cuts will allow things to go further.

 

10.  To what extent were donor communities and coaches associated with the impacted teams notified that their future was in doubt?

 

People who were following the situation were seemingly aware. People following the matter were keenly aware that the Academic Senate made its stand in demanding cuts to the athletics department. Athletics department personnel said both in public and private that all options were on the table. I personally heard that at an alumni event earlier this year. Potential cuts were discussed in emails with team coaches as far back as early 2009. They were discussed at Director's Advisory Board meetings, which is comprised of donors. Specific teams were not named, because decisions had yet to be made, but the impending problem was expressed to as many people as would listen.

 

11.  Were there any consideration given to delaying or canceling the retrofit of Memorial Stadium in order to preserve teams?

 

Cal could not delay, because it is required by UC Regents decree due to earthquake safety. The only option Cal had was to potentially just abandon it, which would be a disastrous idea. Further, the ESP program that is, hopefully, paying for the retrofit will be invested and help create a sustainable athletics fund. Again, football is the key to financial sustainability going forward.

 

12.  What is the status of funding the Student-Athlete High Performance Center and the equipment necessary to make it operational?

 

Going to be finished in September 2011 and will be funded by a debt offering that will be repaid out of Intercollegiate Athletics. I'd be lying to you if I fully understood the ins and outs of this debt offering. It'll take 30 years to repay and will be repaid with "earmarked ticket surcharges," (approx 50 mil), investing donations (approx 90 mil to date), and other donations. The SAHPC will cost 1.5 mil a year to run and those expenses will be covered by the IA budget.

Once it is completed, many teams will move in and it'll help out the entirety of the athletics department, not just football.


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