Dear Faculty and Staff:
Happy mid-summer to all of you.
I hope that each of you has enjoyed (or soon will enjoy) some time away from the University to unwind and disconnect before fall semester begins. Noel and I were able to get away in late June and early July, and we returned refreshed and ready to go for the arrival of a record number of students across the WSU system.
During our summer vacationing, Noel and I do not read work-related email and stay off of social media. In fact, we basically unplug from all electronic devices. While it may seem hard to do, I find that some time free of a steady diet of digital information is essential for mentally recharging.
As the fall semester opens, many events take place across our campuses to welcome both new and returning students. One of my favorite activities is the official move-in day on the Pullman campus during which hundreds of our faculty, staff, and other community members pitch in to help students move their belongings into the residence halls.
This is a great opportunity to give a heartfelt Cougar welcome to students and their families. It’s a lot of fun, too. I encourage all staff to join me in volunteering for 1 of 2 opportunities to help this year: August 11 and 15. Three-hour shifts are available, and volunteers will receive a free t-shirt (and lunch if you sign up for 2 shifts).
Mark your calendar for the all-campus picnic on August 17 too. It’s a great way celebrate the new academic year on the Pullman campus while enjoying a barbecue lunch, music, and the community fair.
As I shared in my June letter to the WSU community, our Board of Regents gather twice a year for day-and-a-half long retreats to discuss significant matters that we do not have time to address during regularly scheduled business meetings. In last month’s letter, I shared some of the highlights of progress in our Drive to 25 discussed at the board retreat in June. This month, I want to delve into another issue discussed at the meeting in June that many of you are deeply interested in—intercollegiate athletics. More specifically, I want to provide additional perspective about our investment in athletics and the finances of the athletic department.
Role of intercollegiate athletics
The role of intercollegiate athletics in university life has been extensively debated during the past 100 years. Google “the value of intercollegiate athletics” and you’ll receive a long list of articles on the subject that offer widely divergent points of view.
Each of you no doubt has your own opinion as well. I would like to share my thoughts about the role of sports at a public research university of the twenty-first century.
I believe that there are some elite public and private universities that do not need a high-profile athletic program to build the external visibility of their institution. Harvard, Yale, MIT, and Cal Tech come to mind, for example. They are world renowned universities regardless of the status of their athletic programs.
I believe there is another group of universities for which maintaining a top-level intercollegiate athletics program is a key part of increasing institutional visibility on a national scale. I would argue that Washington State University falls into this category. Having a successful intercollegiate athletics program is a critical component of growing our national reputation and visibility.
And it goes beyond reputation and visibility. Intercollegiate athletics also helps us build the kind of community in which our faculty, staff, and students can join in and cheer on their Cougar athletes. In addition to Cougar Football, Noel and I have attended our women’s basketball, soccer, and tennis matches, among other competitions. We have watched as the WSU community comes together to celebrate the success of our scholar-athletes, on and off the field.
Benefits of Cougar Sports to WSU
Our membership in the Pacific-12 (Pac-12) athletic conference is beneficial to WSU in a number of compelling ways. For example:
- As a Pac-12 member, we are directly affiliated with world-class public and private research universities such as Stanford, Cal-Berkeley, UCLA, USC, and the University of Washington. Numerous Division I schools in the West and Pacific Northwest would salivate at the prospect of gaining the prestige associated with membership in the Pac-12.
- We benefit from academic alliances based upon conference membership. For example, college deans from all of the conference schools meet regularly (e.g., business, arts and sciences). These meetings contribute to the caliber of our teaching, research, and service.
- The opportunity to see WSU compete at an elite level against top athletes from outstanding universities draws thousands of people to Pullman annually, which in turn provides a significant boost to the local economy. These events also create brand ambassadors for WSU—people who share their experiences from attending games and visiting campus through word-of-mouth and social media.
- Our student athletes shine in the classroom. Our NCAA Academic Performance Rate (APR), for example, continues its upward trajectory and is currently at record levels. During spring semester, our student athletes outperformed the general student body from a GPA perspective.
- Successful athletic teams—particularly those competing in the major sports—also assist in recruiting prospective students who desire an educational experience in a setting that includes known, successful athletic teams. It’s worth pointing out that our record enrollments of the past few years have coincided with the remarkable on-field success in both men’s and women’s sports, including what our football team has achieved the past 3 seasons.
- The television broadcasts of Cougar sports deliver the WSU brand to millions of viewers annually, often on a national scale. For example, more than 10 million households nationally watched WSU upset USC in Martin Stadium on September 29 last year.
- Ol’ Crimson, the WSU flag, has been flown at ESPN College GameDay national telecasts of football games for more than 200 consecutive broadcasts. The flag is mentioned each week.
While the value of big-time sports at public universities will continue to be debated, I am convinced that the benefits of participation outweigh the drawbacks here at WSU. It is important that we appropriately fund nationally competitive intercollegiate sports teams. In short, if we are going to participate—let’s do it right.
This does not mean that intercollegiate athletics can spend at will. It means that we need to put in place the financial resources required to successfully compete on the field, but with the caveat that we operate in an environment in which revenues cover all expenses.
Addressing our athletics deficit
To ensure that our revenues cover all costs associated with intercollegiate athletics, we are employing 4 principles as we move forward.
- First, we will need to solve our fiscal challenges ourselves—we can’t look to someone else for a solution. There is no magic pot of money in the offing.
- Second, athletics at WSU must achieve a balanced budget. We cannot and will not continue to deficit spend at the rate we have in the past.
- Third, athletics, like the rest of campus, will need to build reserve funds to ensure that we do not experience a reoccurrence of annual deficit spending.
- Fourth, once we are operating with a balanced budget and have built sufficient reserves, athletics will begin to repay its cumulative deficit to replenish the University’s central reserves.
Present financial situation
So where are we today financially?
As you undoubtedly know, we are proactively addressing a large cumulative deficit in athletics incurred over the course of several years when annual expenses outpaced revenues. The cumulative deficit will total an estimated $68 million at the end of FY18. It is forecast to climb to $85 million in FY22 before annual athletic revenues and expenditures will balance beginning in FY23.
On the other hand, we are rapidly reducing the annual operating deficit in athletics—a critical first step in addressing the cumulative debt. The graph below shows that we will finish the just-completed fiscal year with a deficit of about $8.8 million, an improvement of $4.2 million compared to annual deficits in excess of $13 million just two years ago. We project that we will continue to increase revenue to bring our annual operating deficit to less than $6 million for the next fiscal year.
The revenue trend is encouraging. We set a record again this year for philanthropic giving to WSU Athletics with more than $7.6 million in donations to the Cougar Athletic Fund—an increase of more than $1.3 million from last year. We are extremely grateful to our loyal alumni and all of our athletic supporters for responding to our needs. Going forward, we must continue to build on this loyalty and ask more individuals to make a financial commitment to ensure the future success of Cougar Athletics.
In addition to increasing our fundraising and enhancing other revenue streams, we continue to look for ways to reduce costs. It’s noteworthy, however, that WSU already operates the most financially prudent athletics program among the Power 5 conferences (Atlantic Coast Conference, Big Ten, Big 12, Pac-12, and Southeastern Conference). We clearly are using our resources in a highly effective manner.
I would be happy to discuss these issues in more detail during my town hall visits with our campuses, colleges, and other academic units this fall.