By David Hill
David Hill is an Assistant Editor at Athletic Management.
Athletic Management, 15.5, August/September 2003, http://www.momentummedia.com/articles/am/am1505/drive.htm
In Oregon, some public schools closed early last spring to save money. Several NCAA Division I universities around the country announced plans to drop sports. Pay-to-play is becoming a budget-season mantra in many places. Boosters are taking over expenses that athletic departments and school boards have long covered.
You are probably worrying about money this year. With reduced government aid, shrunken returns on endowments, and consumers spending less on tickets and licensed merchandise, few schools at any level are insulated from the economic downturn of the past year.
But, just as in other down times, the games go on. Athletic administrators are called upon to find solutions to the money shortages. It’s not easy. But here, in a series of mini-case studies, are examples of how a range of schools are dealing with slashed budgets.
FIFTY SHORT DAYS
Readers of newspaper comics pages this spring will remember it: A teacher somewhere in Oregon breaks the news to his class that the school year will be cut short, and the students, operating on a totally different wavelength, struggle to mask their glee. It was a humorous way for Doonesbury author Gary Trudeau to draw national attention to the budget crisis that threatened Oregon’s schools, but for Greg Ross, it was no laughing matter. As Activities Director for the Portland Public Schools, he had 50 days to raise $500,000, or spring sports would be canceled.
The news of the drastic cuts came in December. “We had finished fall, and winter sports were already up and running,” Ross says, “so there weren’t many adjustments or cuts we could make there.
“Over the past several years, we had cut costs as much as you can cut costs in this level of program,” he continues. “We basically pay for only three things: coaches’ salaries, transportation, and officials’ fees. Everything else we fund-raise for. So it was pretty simple: We had to raise $500,000 in 50 days, and if we didn’t make it, we wouldn’t have spring sports.”
But figuring out how to raise these funds was not so simple. Normal revenue sources were already tapped out, Ross says, and signage in sports venues, limited by school board policies, was generating all it could. Raising student fees was rejected because it would have meant singling out spring sports.
Ross organized a steering committee of business and community volunteers and worked with them to plan strategy and coordinate events and pleas for donations. And word got out.
The schools’ crisis became front-page and lead-story news day after day. The spring-sports fund-raising deadline was only a part of that, but it made the front page of the Portland Oregonian one day and was on the first sports page for days on end. At one point, Ross says, the publicity became almost overwhelming, with requests for interviews coming daily.
But that media coverage proved crucial. Two days after the first story, Damon Stoudemire, a member of the NBA’s Portland Trailblazers and an alumnus of the Portland public schools, donated $200,000. The Oregon Sports Authority, an events promoter, donated $75,000, and a family donated a like amount. Alumni donated. Oregon-based Nike helped organize a “Save PIL Walk” that raised $100,000. In the end, the effort raised $580,000, and spring sports went on.
Many businesses offered fund-raising partnership ideas, and Ross’s job was to quickly determine which efforts would be most worthwhile. “There were a lot of offers that came in that weren’t very good as far as we were concerned,” Ross says. “There was too much overhead or too much time and energy required for the return we’d get. Having 6,000 kids out there trying to sell something door-to-door, for example, wasn’t going to work for us.
“But if a business said they were going to have ‘Save PIL Athletics’ one week and dedicate 15 percent of their gross sales to the athletic program, that was great,” Ross continues. “We probably had 20 businesses do something like that.”
The firm figure and deadline proved to be a blessing in disguise by providing definitive targets. It also helped distinguish the save-spring-sports drive from the bigger school-funding picture.
“People understood,” Ross says, “that the bigger question of funding schools is a larger problem. For overall school funding, you’re talking millions and millions of dollars. For most of us that’s pretty hard to relate to, so it may have helped people to be able to write a $50 check and say, ‘I’ve done my part here.’”
Teachers agreed to work 10 days without pay to avoid cutting instructional days, a step taken in other parts of Oregon. Then in May, voters in Multnomah County, of which Portland is a part, approved the start of a special local income tax to help pay for public schools. Ross now breathes a bit easier.
“The advice I have is that it was critical for us to keep all of our sports together, to not single out one or two programs or have each program try to do it on their own,” he says. “There was definitely some value in all of these sports staying together and making a statement that if we don’t raise the total amount of money, we’re not going to have any spring sports. We never talked about saving a couple and eliminating the other ones. I think that was the key to us being successful.”
THE SOS CALL
At two NCAA Division I institutions, announcing the bad news loud and clear was also effective in securing new funds. These schools made the tough decision to cut sports, let the media and other interested parties know, then stood back and listened to the responses.
Last fall, at Dartmouth College, the smallest of the Ivy League schools, the athletics department faced a deficit for the coming year that was too much for its 34-sport program to handle. Instead of arthroscopic surgery, college officials decided on amputation: The current men’s and women’s swimming and diving team’s season would be its last.
What happened next, says Deputy Athletics Director Bob Ceplikas, wasn’t pretty. “When you’ve got an emotional situation and a lot of different voices involved—many students, many parents, many alumni—you have every reaction that you can image across the spectrum,” Ceplikas says. “But once the most highly charged emotional rhetoric subsided, the more productive dialogues began in earnest.”
In these dialogues, people involved with Dartmouth swimming began to talk about how to save it, the administration explained how much money was needed, and those connected to the program started making proposals. Just 49 days after the cut was made public, Dartmouth announced that swimming and diving would be continued.
An agreement called for the school to fund the team in 2003-04 with funds diverted from elsewhere, and for the boosters of the program to gather $2 million in cash or pledges by June 30, 2003 (a deadline that was met), to pay for the program for the next nine years. During that time, the backers, with some involvement by the college’s athletics development office, is to find a longer-term means of support. The assumption was that a decade allows time for the economic pendulum that largely led to the original announcement to swing back to more bullish territory.
“The idea was to try to provide funding for the program for a long enough period of time that we would be in a sufficiently different budget environment and economy nationally to identify institutional funding more readily,” Ceplikas says. “Of course, no one’s got a crystal ball on that.”
The fund-raising is primarily up to the swimming and diving backers, but the college has set limits. “They are to solicit only alumni of the swimming and diving program, parents of swimming and diving, and a very select group of others who have expressed a strong interest in this,” Ceplikas explains. “Neither the college nor the athletic department could afford to have the whole broad spectrum of our usual financial supporters all redirect their money toward this because our other programs would suffer.”
And though the commitment is relatively long-term, it’s not seen as a permanent solution. “It’s very important to make the distinction between current money and an endowment,” says Ceplikas. “In other words, there’s no such thing as a ‘sort-of’ endowment. This money will be exhausted over nine years. It would take considerably more to endow the same level of support.”
Another university that saved a sport on the chopping block did so through a broader appeal. The University of Minnesota had planned to eliminate its women’s and men’s golf and men’s gymnastics programs. But when the Minneapolis and St. Paul media picked up the story, support came in from certain key leaders of the Minnesota business community. One co-chair of the “Save Gopher Sports” initiative was a captain of the 1954 golf team, Minneapolis businessman Harvey Mackay. The other co-chair was Bob McNamara, a former Gophers All-America football player. The drive worked, and both sports were saved.
Associate Athletic Director for Development Mike Halloran credits the success of the drive to a few factors. First, both sports have long, successful traditions at Minnesota. Second, the state has the country’s highest per-capita number of golfers. And perhaps most importantly, leadership added credibility and name recognition among several types of contributors. McNamara and Mackay are high-profile Minnesota businessmen with ties to the university’s sports tradition who could tap links to major corporate and individual donors while also getting the attention of smaller givers.
“The relationships helped with the larger gifts we got, and their name recognition and credibility helped with the overall program—every gift from $10 to $10,000, to $100,000,” Halloran says.
But the effort didn’t stop when the two sports were saved. The attention to the possible elimination of sports has made supporters more aware of the need to solve the problem more permanently, by growing the school’s endowment for scholarships. Minnesota is working on a document outlining the case for supporting student-athletes, Halloran says. It hasn’t named a specific dollar goal, but has identified $6.2 million as the annual cost of its scholarships.
“It is a more challenging message to communicate because not everybody understands an endowment,” Halloran says. “But once the public knows about it, they certainly understand that that’s the long-term future for securing these sports. The Save Gopher Sports campaign was a Band-Aid. It was a good Band-Aid, but now we need a cure, and the cure is endowing these scholarships.”
Mention “Hilton Head,” and the image that comes to mind is golf greens, sailboats, and beaches—anything but hard economic times. And it’s true that highly valuable oceanfront property gives the Beaufort County School District a huge tax base. But the reality is, like most resort communities, Hilton Head also depends on the work of people who don’t make a lot of money. “We have from Yale to jail,” says Hilton Head High School Athletics Director Gregg Elliott.
Thus last fall, like so many other high schools, Elliott found himself losing about $50,000 of the $70,000 he had in his budget from the school district. Each head coach had to reduce his or her budget request. The booster club kicked in a surplus of about $8,000. And Elliott tapped an $8,000 reserve account he’d built up by saving year-end leftovers for several years (a fund he’d earmarked for a washer, dryer, and ice machine for a recently built gym). Those funds didn’t cover the whole cut, but they got the program through the year. Then came word that, with the South Carolina legislature cutting spending on education, Beaufort County’s support for athletics would be further reduced for 2003-04. As the school board developed its budget this spring, Elliott was left with a $55,000 gap between expected revenue and spending.
Unlike the schools mentioned above, Hilton Head did not want supporters to provide funding. Elliott already conducts several fund-raising projects, and he did not want to burden parents with a pay-to-play fee or a raise-to-play fee (in which student-athletes fund-raise, usually targeting parents). Instead, Elliott decided to organize, politically.
Elliott called a meeting of other athletic directors in the district and formed the Athletic Task Force. It included each high school’s athletic director, along with an administrator and parent from each of the three high schools and the six middle schools. The Task Force met, with the media invited, and formed a delegation to meet with the superintendent and school board.
“We had two goals,” Elliott says. “One was to educate our school district on exactly what our funding looks like compared to the teams we’re playing against from nearby districts. Our school district budget was $121 million. We got $1.06 million, so we got less than one percent of the total district budget, counting travel, salaries, and equipment. Some of the nearby schools range from one to three percent. We told them if they’d give us one percent of the budget, we’d be happy.
“Second, we wanted to exert a little political pressure, do a little lobbying,” Elliott continues. “Athletics is a valued commodity in our district, and we needed some help if we were going to have our kids compete against the other school districts.”
The Task Force also made sure to broaden the base of support by including middle schools, where principals’ discretion over activities spending had left wide disparities in opportunities. Part of the plea became, “‘If you’re a teacher and coach at one middle school, you should make about the same as at another middle school, and everybody’s going to be treated as equally as possible,’” Elliott says.
The superintendent was sympathetic, but the overall effect was mixed. As of this writing, the school board had not adopted a 2003-04 budget, but athletics had made it back into the middle of three possible levels of support. “They have three tiers of budgeting,” Elliott says. “In Tier 1, $20,000 goes to athletics. Tier 2 gives us $35,000, and in Tier 3, $45,000 goes toward athletics. If Tier 3 passes, I’m still down $25,000 but I’m better off than with Tier 1 or 2.”
SHARING THE PAIN
The University of Nebraska-Omaha’s story may be the most typical. The university was expecting a 10-percent reduction in support for higher education, and athletics would share in the cuts. Dropping sports was not necessary and neither was organizing into committees. But Director of Athletics Bob Danenhauer still needed an internal strategy to deal with the funding reductions.
His approach was to spread the reduction broadly, with no program singled-out. It seemed to ease the pain. “I gave each of our head coaches a survey saying, ‘Okay, if you had to cut five percent out of the operational budget, where would it be?’” says Danenhauer.
Part of his job was to break the news. “I’ve found it’s best to be honest and tell staff members that, due to budget cuts, here’s where we’re at, and you simply need to cut back,’” he says. “They understand it because they, like me, feel we’re going to get through this together on our campus.”
It also helps, Danenhauer says, to keep things in perspective. “On our campus last year and this year, people have lost jobs, not in our department, but elsewhere. Therefore everybody felt that we needed to take our share of the cuts as well.”
Danenhauer had been building a cushion for the downtimes by requiring season-ticket holders in men’s ice hockey (the school’s only Division I sport and big money-maker) to pay a special premium to move up in the seating priority; he’s now tapping that reserve. But the all-for-one, one-for-all attitude has helped make sure the head coach of ice hockey does not expect to have first crack at those revenues.
“We’re all in this together,” Danenhauer says. “He’s got a great attitude about the team concept.”
FRIENDS COME THROUGH
Fresno State University has made national headlines this year, thanks to its crisis-ridden basketball program. But it’s also made local headlines due to a financial crisis. Last winter the university announced it would eliminate men’s soccer, women’s swimming, and men’s cross country and indoor track because of a lingering athletics deficit made worse by a reduction in state aid for higher education and increased tuition, among other things.
Like at Dartmouth and Minnesota, administrators broke the news and waited for the fallout. In this case, supporters of just one sport, soccer, came forward to try and save the team. This time, however, the work was done not by alumni, parents, or administrators, but by fans.
“We’re in a pretty unusual situation here,” says Fresno State Assistant Athletic Director for Communications Steve Weakland. “We’re not in a big metro area competing against pro sports. And we’re a college town.”
After word of the elimination hit the Fresno-area media, fans of soccer—largely youth soccer players, their coaches, and parents—joined forces to ask what it would take to keep the sport going. The answer from the athletic department was that it would take not only money for men’s soccer but enough to save a women’s sport to maintain gender participation ratios under the proportionality prong of Title IX.
The soccer fans formed the Valley Soccer Foundation and got swimming fans and supporters on board, too. Together, they came up with enough in cash and pledges to convince Fresno administrators to keep the men’s’ soccer and women’s swimming programs going for another year. Athletic Director Scott Johnson agreed to devote $150,000 already earmarked for the school’s obligations on scholarships while the foundation worked on fund-raising. If cash or guaranteed pledges totaling $2.72 million can be obtained by Jan. 15, 2004, the programs will be kept through 2007-08.
“The other component of this,” Weakland says, “is that we as an athletic department and university have agreed to take on the inflationary costs of these two sports. So the bottom line is that they’re going to have to raise $680,000 per year and that will be a standard. It will not increase and it will not decrease as time goes on, and the inflationary costs of things like tuition increases, travel, and coaches’ salaries will be absorbed by the athletic department.
“Obviously an endowment would be the safer way to go,” Weakland continues, “but that would have taken a pretty significant amount of money upfront, probably in the $10 million range. This is not an endowment. It’s just going to be an annual continual fund-raising project to support these sports—probably no different from what other club teams do, although on a bigger scale.”
As part of the package, people pledging $20 a month get season tickets to home soccer matches. Student-athletes in the sports took part in fund-raising rallies, particularly those targeting youth soccer, Weakland says. “There are about 22,000 youth in the Fresno area who play soccer, so on the smaller end of the scale, they were trying to tap into those youth leagues to get the $20 a month donation from a family,” he says.
In the end, Weakland says, the lesson is that once the alternative became clear, lovers of particular sports were willing to put money behind their passions. “Until it became real to them, people weren’t ready to cut a check,” he says.
Sidebar: Take It on TV
Thanks to the competitive media in the Twin Cities, the University of Minnesota had little problem building awareness of its athletic department’s money woes. But when it had a chance to take greater control of getting the message out, it jumped. With air time donated by a local television station, the athletic department staged a three-hour telethon showcasing its athletes, former athletes, and the cost of intercollegiate athletics.
“It was a free three-hour infomercial, frankly,” says Mike Halloran, Associate Athletic Director for Development. “We got a local TV station to donate three hours of air time on a Sunday and it just came together.”
“We had gymnasts doing demonstrations. We had our band and our mascot, Goldie, on, and a lot of former student-athletes came on to speak, including some who weren’t in the area on videotape,” continues Halloran. “We also presolicited donors who were willing to give certain amounts of dollars and then come with me on the air and present the check. It was a three-hour celebration of the University of Minnesota Athletics Department.”
Sidebar: Tweaking the Budget
By David Paling
David Paling is the Director of Athletics, Health, and Physical Education for the Middleboro, Mass., public school district.
Here in Massachusetts, a $3 billion shortfall is anticipated in public service entities for 2004, which trickles down to high school athletics in a big way. I spoke with several of my peers in the Bay State, all of whom are scrambling to make ends meet with slashed budgets. Here is a sampling of ideas they will be implementing:
Cutting Sports: Although most athletic directors view cutting sports as a last resort, in some cases it is the best option. At Scituate High School, Athletic Director Kathleen McCarthy will cut three teams: skiing, gymnastics, and swimming.
“These were programs with relatively low numbers of participants that operated at venues off school grounds that cost us money,” she says. “The total kids that will be affected is approximately three dozen.”
At Wareham High, Athletic Director Buddy Carlson will cut sports that have low levels of participation. For example, freshman field hockey will not field a team this fall. Mashpee High School is also considering consolidating all freshman teams into junior varsity programs.
However, Jeff Kent, Athletic Director at Abington High says, “I have serious concerns about cutting lower levels of teams, even though we’re doing it to some extent here. Take freshman football, for example. If you cut the freshman team, then you will have a 15-year old on the same field, at times, as an 18-year old. In a full-contact sport, this bothers me.”
Bob Bancroft, Athletic Director at Whitman Hanson Regional High School, also takes exception to this practice. “It results in a major impact on the future success of the team,” he says. “A program cut for two years can leave an eight year impact. Kids would find outside avenues for participation if we did this, and they would be involved in them for a while. It takes time to recover from something like that.”
Reducing Schedules: At Wareham High, Athletic Director Buddy Carlson will not schedule sub-varsity level games with non-league opponents, thus reducing the total number of games his freshman and junior varsity level teams will play.
At Whitman Hanson, “unless it’s revenue producing,” says Bancroft, “we will schedule one less non-league school in a home/away situation per sport.”
Changing Leagues: Here at Middleboro High, we changed swim leagues, which will essentially cut the costs for the sport in half. Previously, we had a girls’ team in the fall and a boys’ team in the winter. We have since affiliated ourselves with a swim league that allows us to operate the two as a combined team in the winter season. It runs a double dual format encompassing our male and female swimmers in one competition.
Bringing in Money: At Middleboro, we’ve also looked at raising fees for some of the smaller things we do. We raised the field rental fee for the local youth football team as well as the semi-pro team in town, and we did the same for the YMCA squad that uses our pool. Middleboro athletes are now charged for soccer, baseball, and softball socks, baseball and softball hats, and bathing suits—these were items that the school previously purchased, but the athletes kept.
Small But Worthwhile: Small changes can often add up:
• Abington is moving all its night soccer games to afternoon time slots. “If you look at what we pay police, custodians, ticket sellers, electricity bills, and the like, you find that it costs more to run a night game than a day game,” says Kent.
• Whitman Hanson is suspending all athletic awards for the year.
• New Bedford High is putting two teams on a single bus when possible, as is East Bridgewater High.
• Scituate High will operate its track and field program with one fewer coach.
Sidebar: User Fees: A Primer
By David Paling
David Paling is the Director of Athletics, Health, and Physical Education for the Middleboro, Mass., public school district.
Charging student-athletes a fee to participate in athletic programs is a legitimate way to keep programs up and running. However, there are numerous pitfalls to user fees—and many questions that arise. Athletic administrators who find themselves forced to implement this system must foresee the downsides and establish procedures and policies to avoid them. The following questions and answers should get you on the right track.
How much should I charge?
User fees vary widely. Amounts of $50 to $1,000 or more have been levied. To estimate what your fee should be, know how much your budget was cut, take the total number of anticipated participants, and do the appropriate math.
The results may present your first problem. Is your user fee amount affordable enough to allow all your athletes to participate in the sport(s) of their choice? If not, then the total number of participants will certainly decrease. For example, three sport-per-year athletes who find the fees excessive may decide to play two. Team members who don’t experience a lot of playing time in games may opt out altogether. So while the simple math in determining fees is easy to work out, the practical application is another matter.
The wise athletic administrator is one who creates provisions within his or her user fee systems. Families with more than one child involved in athletics, for example, may receive reduced rates. Students with financial challenges may apply for waivers (ask your booster club to start a fund to cover these athletes). Three sport-per-year athletes can be offered a reduced rate.
At Middleboro High School, we charge $75 per sport, regardless of level, and a $150 maximum yearly fee for those who participate in multiple sports. We also have a $350 maximum amount per family per year.
Should fees depend on the sport?
Schools that institute a system based on the costs of individual sports may be penalizing their athletes unduly. The costs of a full football uniform, for instance, far exceed the cost of outfitting a tennis player. Should an athlete be required to pay a heftier user fee based on his or her desire to play a particular sport? The matter becomes muddled further when budgets for other aspects of the programs are examined: longer seasons, coaches’ salaries, field/court maintenance costs. Also, what about sports that generate income as compared to those that do not?
The cost-basis approach presents conundrums that are best avoided. Paying one set fee that applies to all is the cleaner way to go.
How do I handle athletes who don’t finish the season?
From season-ending injuries to athletes who quit midseason, policies must be made for athletes who don’t finish the season. Here’s what we do at Middleboro:
• When an athlete suffers a long-term injury, refunds will be granted on a pro-rated basis.
• Athletes who try out for teams and are cut will be issued refunds.
• Athletes who become ineligible for academic reasons will be issued a refund on a pro-rated basis.
• Athletes who quit a team will not be issued refunds.
Other areas to think about:
• If an athlete removes himself from a team to concentrate on academics, will he get a refund?
• If an athlete is removed from a team for discipline problems, will she receive a refund?
• If you have self-funded teams, should athletes on these teams also have to pay a user fee?
It is important to establish policies to cover all of these possibilities, and to communicate these policies to everyone involved before the season begins.
How should I collect fees?
Collection of the user fees can be a nightmare for the person delegated this responsibility. Hundreds of athletes must be monitored within the constraints of school time. Bounced checks happen and partial payment requests will come in. Careful record keeping is required, particularly during audit times for the athletic department.
To ease the burden on collecting fees, at Middleboro, we’ve made the deadline for the payment of user fees prior to the team’s first scheduled competition. Athletes who have not paid their fee in full by this deadline will be excluded from any further participation. In addition, partial payments are not accepted.
What is the key?
Communication is definitely the key. When parents pay the school directly for athletic participation privileges, the expectation that their kids play in games as much as everyone else becomes an issue. From the school’s point of view, athletics remains a competitive experience where players are going to earn the right to starting positions and playing time. Athletic administrators must work diligently to publicize the fact that even though the financial picture has changed, the fundamental philosophy of the athletics program has not.
It is advisable, if at all possible, to avoid the implementation of a user fee system. Should this type of approach become necessary, however, through the lean times, careful planning and proper execution will help make the program work.