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Civic Skinny

August 30, 2012
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Athletic budgets explained. Barbara Mack remembered

At the three state universities, the athletic departments are considered “auxiliary enterprises,” like the housing departments or the parking departments or the student-health facilities. They are not considered part of the general education operations.

That should tell you something.

As “auxiliary enterprises,” they have separate budgets that must go to the Board of Regents each year. English departments and math departments and engineering schools also have their own budgets, of course, but they are part of the universities’ general-education budgets, and most people, including members of the Board of Regents, never see them. But the Regents must approve these auxiliary budgets one by one.

That’s a good thing.

Or it would be if anyone paid attention.

Which nobody does.

The latest budgets were given to the Regents this month — there was little or no discussion, apparently, and little or no press coverage — and they showed whopping increases at the University of Iowa and Iowa State University and continued woes at the University of Northern Iowa. At Iowa and Iowa State, the increases in the budgets far outpace the increases for the academic sides of the schools.

The University of Iowa this year has an “operating” budget of $650 million, money that will support the education of the students, the salaries of the teachers and administrators, the operation of the library, the student aid and other academic endeavors. The money comes almost entirely from tuition and state appropriations. That’s up $24.2 million, or 3.2 percent, from the fiscal 2012 budget.

The university’s athletic budget, however, is up 7.5 percent — more than twice the rate of increase for the academic side. The budget is up because revenue is rising sharply, mainly because a lucrative Big Ten television deal made a few years ago rains ever more dollars on the conference schools. Also, the university expects revenue from the football operations to rise nearly 10 percent.

If the English Department or the Engineering School had such a windfall, the money would go into the general budget, and the budgeters would determine how much goes back to those operations and how much goes elsewhere. But because athletics are auxiliary enterprises, the policy — but not the law — is to let them keep all they take in. Thus, year after year, the athletic departments turn in expense budgets that, not coincidentally, spend every single dollar — not a dollar more, not a dollar less — that comes in.

This year, the University of Iowa athletic department expects revenue — and, thus, expenses — of $80,620,771, up from a budgeted number of $74,942,716 a year ago. Of that money, a minimum of $5.5 million — and probably a lot more — will go to the top two coaches, football’s Kirk Ferentz and basketball’s Fran McCaffery. McCaffery’s $1.7 million salary accounts for a third of the basketball operation’s $5.1 million in expenses. And those expenses exceed by $2.3 million the revenue the sport brings in, though television money is not apportioned out by sport. Ferentz’ $3.8 million base pay (he could make much more if the team is good) is 21 percent of the $18 million or so the football program will spend. But even without counting TV and conference money, the football program will make close to $4 million.

Every other sport loses money. Wrestling this year expects revenue of $475,000 and expenses of $1,292,938. All other men’s sports — baseball, golf, tennis, track, etc. — will have revenue of just $12,000 and expenses of $4,324,011. All women’s sports will bring in $211,000 in revenue but will have expenses of $12,831,372. The university will pay women’s basketball coach Lisa Bluder a minimum of $509,000, with the possibility of $500,000 or so in incentives. (For instance, she’ll receive $50,000 if Iowa wins 65 percent of its games, and $35,000 if it is invited to the NCAA tournament.) Her final pay will likely end up being three times the $185,000 in revenue the sport is budgeted to bring in. It was budgeted at that number last year, too, but it probably ended up around $170,000.

Incredibly — or, at least, incredibly to Skinny — the university was money ahead last fiscal year by missing its revenue budget in women’s basketball. At $170,000 revenue, Bluder got no bonus based on ticket sales. If it had been $175,000, though, she would have gotten $20,000 — meaning the extra $5,000 in revenue would have cost the university $20,000 in bonus pay. This year, Bluder gets a $20,000 bonus if revenue comes in $10,000 below budget. That is, if revenue is $175,000, she gets the bonus. If it’s $200,000, she gets a $35,000 bonus. Again, the economics are goofy: If revenue this year tops last year’s revenue by $30,000, Bluder gets a $35,000 bonus. Her contract is, at several points, a disincentive for the university to sell tickets to women’s basketball games. (Bluder also gets two cars, a fistful of tickets to football and men’s basketball games, free travel and meals for her family for road trips, and the like.)

At Iowa State, the situation is much the same. The operating budget for the university this fiscal year is $508 million, up 5.7 percent from fiscal 2012. The athletic budget is $56,708,410, up 22.8 percent from the $46,144,310 budgeted for the fiscal year that ended June 30. (In fact, revenue actually came in at an estimated $50,436,961 because of a conference TV deal. But the university found ways to spend that extra $4 million.) As at Iowa, football is a big profit center at Iowa State, where — not counting conference and TV revenue — the program is expected to bring in $8,260,943 in revenue and spend $2,795,000. The biggest expenditure is the salary of Coach Paul Rhoads, who is guaranteed a minimum of $1.7 million and who will get another $200,000 if the team wins at least seven games.

Similarly, the largest expense in men’s basketball is the $1.2 million guaranteed to coach Fred Hoiberg. That’s about 85 percent of the entire basketball budget of $1,415,000. Revenue for the sport is budgeted at $2,325,000. Women’s basketball at Iowa State brings in three times the revenue that the University of Iowa women bring in, with budgeted income this year of $530,000. Longtime Coach Bill Fennelly will earn at least $575,000, accounting for the bulk of the sport’s expenses of $864,400.

By most accounting methods, the athletic departments at Iowa and Iowa State are self-supporting. Until a few years ago, sports budgets at both universities were subsidized from the universities’ general funds; that is, money from tuition and from state appropriations was used to help fund athletics, as is still the case at the University of Northern Iowa.

In fiscal 2001, for instance, the University of Iowa had an athletic budget of $25,750,500, and that included $1,925,000 of “university general support.” Iowa State had an athletic budget of $19,917,249, and that included “university support” of $2,345,424. UNI had an athletic budget of $6,155,214, including “general university support” of $2,921,814.

In fiscal 2001, the University of Iowa had a general operating budget of $414,357,723. Thus, since 2001, the university’s general operating budget has gone up 57 percent while its athletic budget has gone up more than 200 percent. In fiscal 2001, Iowa State had an operating budget of $397 million. So its general budget has risen 28 percent while its athletic budget has gone up 185 percent.

Even at UNI, which gets no windfall from television or bowl games, athletic spending has outpaced academic spending. In 2001, the university’s general operating budget was $130 million and its athletic budget was $6.1 million, including university support of $2.9 million. This year, its general budget is $165 million and its athletic budget is $11.5 million, still with around $3 million of university support. Over the years, the general budget has increased 27 percent while the athletic budget has gone up 88 percent.

Sooner or later, someone will look into this and probably tie future increases in athletic budgets to increases in the universities’ general operating budgets. At the University of Iowa, if the athletic budget this coming year were limited to the same increase as the general budget, the athletic department would return $3,279,889 to the university — money that could, among other things, provide full-tuition scholarships for 437 needy Iowa students.

Another possibility, suggested by a guy intimately familiar with university finances, would be to make the athletic departments pay the universities for, in effect, use of their names. The athletic departments charge others lots of money for the use of school trademarks — Herky or Cy or other symbols — and, this guy says, turnabout is fair play. The teams would be nothing if they couldn’t use the school names — “Iowa” and “Iowa State.” Charge the athletic departments for those uses, he suggests.

At any rate, nothing is likely to happen until there is a budget crisis even worse than the one the universities are weathering now, but sooner or later someone — a Regent or a legislator or a courageous university president — will start looking at the numbers. They’ll be amazed at what they see. ...

News, of sorts: Bob Vander Plaats is moving to Grimes after living in Sioux City for 16 years. After losing the GOP gubernatorial nomination two years ago to Terry Branstad, he apparently has no plans to run again. “I really believe God called me to lead The Family Leader,” the group that helped throw out three Iowa Supreme Court justices two years ago, Vander Plaats told The Sioux City Journal. God sent him to a pretty lucrative job, apparently. Word is the new house costs around $400,000. ...

Jack Hatch, the Democratic legislator from Des Moines, apparently is thinking of running for governor. ...

The Des Moines Public Schools now list all public-records requests on its Web site. Since July 8, there have been 17 requests. Six have been from former superintendent Nancy Sebring, whose graphic e-mails in a very public affair with John Hintz pretty much ended her career as an administrator, and five have been from her twin sister, Nina Rasmussen, whom Sebring hired to run the charter school. The most interesting: Rasmussen’s request for “all emails between John Hintz and Nancy Sebring.” Sebring, Rasmussen and the charter school now all are history within the district. ...

Cityview joins those mourning the death last week of reporter-lawyer-professor Barbara Mack. Mack was at times the earth mother, at times the nun-like teacher ready to rap your knuckles with a ruler, at times the quick-thinking courtroom lawyer — and always this towering irrepressible woman with strong views and a soft heart.

She was at least six-feet-tall in her stocking feet, and once, around 1970 when she was in her late teens and working as an assistant in the Des Moines Register newsroom, she went up to an elderly, popular, five-foot-six editor at the paper. “How long have you worked here?” she asked him. “Around 40 years,” he replied. “In those 40 years,” she said, “has anyone ever just picked you up and given you a big hug right in the middle of the newsroom?” “Not that I recall,” he said. “Then let me be the first.” And she grabbed him, hoisted him up and gave him a huge bear hug.

By that time, he didn’t know the names of most of the young people in the newsroom. But he never forgot hers until the day he died at 102. “She was unforgettable,” he said every time he told the story.

And she was. CV

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