Pullman, WA- A series of financial setbacks for WSU Athletics has left the department with an $11.5 million budget deficit that university leaders are working to resolve.
The shortfall is from a combination of unexpected decreases in Pac-12 Conference revenue distributions, other revenue sources falling short of projection, and operating costs that exceeded the approved budget.
Athletic Director Pat Chun and WSU’s new Executive Vice President for Finance and Administration Leslie Brunelli will brief university regents on the deficit and proposed plans for addressing it when the board meets next week. Regents, by state law, must approve intercollegiate budgets at Washington’s public universities.
“Athletics has made significant strides in bringing the department to a balanced operating budget but is now dealing with multiple unforeseen challenges,” said WSU System President Kirk Schulz. “Fundraising and sponsorships continue to grow and I remain committed to achieving a balanced annual operating budget, building financial reserves and developing a repayment plan for paying down the internal debt.”
Schulz and Chun will engage in conversations with the university’s Athletics Council in the fall around repayment of accumulated debt.
Last month, the Athletics Department implemented a series of immediate cost-cutting measures that include a temporary hiring freeze and suspension of non-essential travel.
Several operational changes and a series of new budget monitoring and financial accountability measures are being implemented. The department will work closely with the university’s Office of Finance and Administration and a review of the factors driving the FY23 budget overage is underway.
Schulz has pledged that the steps being taken to address the deficit won’t affect planned salary increases for the university system’s faculty and staff.
The current deficit comes after the department in 2022 posted its first balanced operating budget in years. And it appeared to be on the right track again in several revenue-generating categories, including increased ticket sales, royalties and sponsorships before the significant financial setbacks started.
The decreased revenue for the current fiscal year includes:
- An estimated $3.5 million reduction in Pac-12 distributions related to repayment of a media partner for past overpayments and higher-than-expected costs for relocating the conference headquarters out of downtown San Francisco.
- A forecasted $1.4 million shortfall in Pac-12 and on top of the $3.5 million reduction related to the Pac-12 overpayments and increased moving expenses.
- About $1.2 million from lower-than-projected revenue from the sale of student sport passes and other student-paid fees as a result of lower enrollment, as well as shortfalls in parking, facility fees, and bowl revenues.
The department also exceeded budgeted expenditures by $5.4 million. Of that amount:
- Inflation contributed to higher team-related expenses such as travel, recruiting, student-athlete meals, medical and other expenses, which account for about $4.7 million of the over-spending.
- Financial aid costs for a larger-than-anticipated amount of medical and degree completion aid account for about $400,000 of the excess.
- And, increases in compensation, including overtime pay, for hourly and student employees account for about $300,000.
Looking ahead to fiscal year 2024, the department is proposing a budget of $83.4 million. The budget request must be approved by the Board of Regents, which is scheduled to consider the proposal at its June 9 meeting.