UI athletics operating in the red
CHAMPAIGN – Brigham Young's bowl-assignment loss was, in part, Illinois' gain.
The UI's Department of Intercollegiate Athletics, suffering a major financial setback in football this past season, received unexpected income of more than $600,000 when Big Ten member Penn State received the controversial nod over BYU in the $8 million Fiesta Bowl.
That windfall reduced the UI athletic department's budget loss during the first six months of the fiscal year to what athletic director Ron Guenther calls "a workable figure" of $1.2 million in a $24 million budget.
"We won't be able to make that up in the remaining months," said Tim Tracy, assistant athletic director and chief financial officer for the DIA.
"But it isn't a figure that will require the dropping of sports or anything that drastic. We ran into some one-time situations relating to football. We are presently working on our second five-year strategy plan that will address that deficit."
Debt is nothing new for the athletic department. A deficit that had reached $2.7 million at the tag end of the Neale Stoner regime in the 1980s, was reduced to $827,000 by the time Guenther took over in 1992, and Guenther entered the past year with a $500,000 surplus (that can be applied to the $1.2 million loss). Disregarding the "never-ending" Memorial Stadium debt service of $1.3 million that is paid to the university every year, the DIA actually climbed out of red ink prior to the disastrous football season of 1996.
The financial surge of the early 1990s was accomplished via increased Big Ten bowl payouts, ticket price increases, the reduction of men's sports (swimming and fencing were dropped), expanded corporate sponsorships, a peak of $3.1 million in annual scholarship fund income, and profits from the DIA's decision to produce its own radio broadcasts.
"We have controlled expenses," said Guenther. "But at the same time we have come to the realization that championship programs require championship coaches, and we have gone into the market place very aggressively. I call that strategy 'investment spending.'
"When we made the change in football, we knew what buyouts and changeovers meant financially. We're confident that increased revenue and sponsorships will make up for the cost of coaches' salaries."
The problems of last fall developed when Lou Tepper's football team averaged just 51,155 fans, well below the break-even number for the department. The final home contest with Wisconsin attracted 37,814.
Furthermore, in a conference where revenue sharing for men's football and basketball is split on a 65-35 basis, the Illini received a healthy portion from Michigan and Michigan State, but didn't get to share (35 percent) in some of the larger football crowds at Penn State, Ohio State, Wisconsin and Iowa.
Compounding that financial setback, Guenther's decision to replace Tepper created more immediate expenses. Whether or not he takes another job, Tepper has $138,000 coming on the final year of his contract. So, presently, Guenther is paying two head coaches and 14 assistant coaches – the nine members of Ron Turner's newly formed staff plus Denny Marcin, Shawn Simms, Paul Schudel, Dan Martin and Dan Roushar. Contracts for the latter five run until May, unless they obtain new jobs prior to then. Payments ceased to Chris Cosh and Sean Payton when they were hired at Maryland.
"Guenther elected to continue payments until May for those who didn't warrant full (six months) severance," said Tracy. "He sent a letter to the coaches guaranteeing that."
At the same time, Guenther is paying two head basketball coaches, Kruger receiving the most lucrative coaching contract in UI history and the newly retired Lou Henson spreading the last year of his contract over three years at more than $100,000 each.
Following are financial notes on the DIA:
– The operational sports budget is roughly $21 million, and the scholarship fund intake of $3.1 million brings the total budget to $24 million. That's nearly double the budget at the end of the Neale Stoner regime in the late 1980s, and is $6 million greater than when Guenther took over.
– With the Fiesta and Rose Bowl providing $600,000 apiece, the Illini expect to receive $1.5 million from Big Ten bowl appearances.
– Unless a major donor emerges, golf course improvements, which began with two revamped holes on the Orange Course this past year, will continue with annual profits from the golf operation. That amounted to more than $100,000 last year.
– Guenther is taking a serious look at the stadium bubble, and must determine within the next two years whether to invest in another canvas or step up the search for private donors to build a $6 to $8 million football facility. With each new structure, whether it's the basketball practice facility going up in the spring or the remodeled Irwin Academic Center, the cost of maintenance and utilities will run more than $100,000 per year.
– The DIA has advertised for a women's soccer coach, who should be hired by the spring. Soccer will be followed by women's softball. There are major start-up costs in developing fields and staffs for both these sports.
– The Nike agreement has been extended from seven years to 10, taking care of apparel throughout the next decade and providing a slight increase in actual dollars.
– The surging women's basketball program is expected to grow well past last year's income figure of $31,284, but has a long way to go to reach the Big Ten's upper echelon in revenue. Last year Ohio State took in $327,000 from women's basketball, Wisconsin $264,000, Penn State $233,000, Iowa $208,000 and Purdue $148,000.