University President Wallace Loh
With less than a year to go before the university officially joins the Big Ten, a presidential commission has outlined a transition plan, which includes restoring one team once at risk of elimination and diverting some new athletic revenue streams for academic purposes.
Two weeks after university President Wallace Loh’s November announcement that the university would leave the ACC — a conference it helped found 60 years ago — for the revenue-sharing Big Ten, he charged a commission to craft guidelines to help ease the conference move, which has garnered national attention and prompted drastic changes within the ACC.
Among its 22 recommendations, the commission said money for new athletic facilities cannot come from Big Ten revenues. That includes practice fields, an indoor practice facility and a Varsity team house. This university will be the only school in the conference without an indoor facility, which would cost $50 million to $80 million.
The athletic department has accrued a $21 million deficit this year, Loh said. The ACC has begun withholding television revenue, the athletic department’s primary source of revenue, to help pay the $52 million exit fee the university faces for leaving the conference.
“From the very beginning, I’ve said this is not just about athletics; this is about academics and helping students with financial need,” Loh told The Diamondback. “There should always be tight budgeting because that’s how we got into this problem in the first place.”
Tight budgeting is why the commission proposed fully restoring only one of the eight teams slated to be cut from the university’s formerly 27-sport athletic program: men’s outdoor track and field. The program was the only one of the cut teams able to raise enough money to sustain itself through 2013, and additional revenue from the Big Ten will enable the athletic department to fully support it.
Despite various efforts to raise money in an attempt to save the other teams — including men’s and women’s swimming and diving, men’s indoor track, men’s cross country, water polo, gymnastics and men’s tennis —the athletic department’s ballooning deficit made that nearly impossible.
“When you have a deficit of $21 million, it would not be prudent at all to bring back a whole bunch of other teams,” Loh said. “That’s what the university did for years — kick the can down the road.”
Instead, the commission proposed better supporting each student-athlete. It found that the athletic department could not afford to provide some athletes with 21 meals a week, which equates to three meals a day. This university ranked last in support per student-athlete in 2010 among the ACC’s then-12 schools.
“Some teams have been playing for national championships year after year and other teams are doing well enough, but they can do better,” said Athletic Director Kevin Anderson. “That’s what we’re striving for.”
The commission also proposed using some athletic revenue to support academic enterprises, such as scholarship funds and various programs, beginning in fiscal year 2015. Because the Big Ten is a revenue-sharing conference, all members receive an equal share of the money generated, meaning the university will make millions more each year. In 2012, each Big Ten member made about $24 million, except Nebraska, which joined in 2011.
The university’s slumping football and men’s basketball ticket sales led to the athletic department’s downfall. When Loh charged a commission in 2011 to examine the department’s finances, it found the department’s reserves had been completely depleted and the deficit was expected to reach $4.7 million that year.
To avoid a repeat of the catastrophe, the athletic department will save 50 percent of its excess revenues once it is financially stable — meaning all its debts to the university are paid off and it is no longer operating at a deficit — and set aside the other 50 percent to build reserves and make additional investments in athletics.
There will also be annual reviews of athletic department finances comparing them with the commission’s outline to successfully join the Big Ten.
Since this university’s departure, the ACC’s now-15 members have signed a grant of rights deal, meaning the ACC owns members’ television rights. The deal effectively locks in the ACC’s members until 2027, quieting speculation that the conference would be the next to fall apart.
The university last month joined the Big Ten’s Committee on Institutional Cooperation, an academic consortium made up of conference members and the University of Chicago that enables universities to share resources and academic programs.
“Don’t expect miracles in the first year or two, but if you look down the track, all along the way, we’re making progress,” Loh said. “We would never have gotten out of this hole if we had stayed in the ACC.”
Check back for updates on this developing story.
