When the book closed on the 2013 fiscal year last July, the University of Washington’s athletics department once again counted itself as a member of an elite club.
It’s among only about two dozen sports departments of 228 NCAA Division 1 public schools that reported generating enough money to cover its own expenses, annual reports submitted to the National Collegiate Athletic Association (NCAA) show.
In fact, the UW Department of Intercollegiate Athletics — bolstered by a resurgent Huskies football team and its cut of Pac-12 TV revenues — posted its best figures in the past decade, reaping a record $8.9 million profit last year.
But at a time when state colleges in Washington grapple for their share of public funding while higher education costs steadily escalate, the UW continues to subsidize its athletics department with annual funding.
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Much like the department’s overall revenues, financial reports show a rising trend line in “direct institutional support” — a yearly grant from the school to athletics that has ballooned by 129 percent since 2005, climbing to $3.3 million last year.
So why does the UW give money to a sports department that doesn’t seem to need it?
Because lawmakers allowed the UW and other four-year state colleges to do so 25 years ago as a way to help pay for ending women’s historical underrepresentation in college sports, officials said.
The Legislature authorized the schools to grant “gender-equity tuition waivers” to female student-athletes as a way to “start up some very nice women’s programs,” UW Athletic Director Scott Woodward recently said.
“And we’re happy to have them,” added Woodward, who touts his department’s otherwise self-sustaining operations. “ … I don’t think we want to take away from (the tuition waivers).”
Yet some people — including the ex-legislator who came up with the idea for granting tuition waivers to female-student athletes — think it’s time to re-examine the issue.
“If the athletics department is making a profit that can support women’s programs, then yeah, it’s time to review this,” said Ken Jacob-sen, a Seattle Democrat who retired from the state Senate in 2010. “Of course, I’ve never known anyone to give up a waiver or tax break willingly.”
Students pay subsidy
In 1989, Washington lawmakers approved one of the only state laws in the nation that seeks to help increase women’s participation in college sports. They did so by authorizing Washington’s four-year public colleges to waive up to 1 percent of overall tuition revenue as a way to fund “gender-equity” scholarships.
Under the legislation, the state doesn’t directly grant money to colleges. Rather, each school helps cover tuition costs for female student-athletes out of its net tuition collections, essentially meaning other students who pay tuition are subsidizing their educations.
At the UW, the school provides three-quarters of 1 percent of its total tuition collections to the athletics department each year to help attain sports gender-balance goals.
Jacobsen, a father of two soccer-playing daughters who chaired the House Higher Education Committee when the law was passed, said he spearheaded the push after conversations with other parents.
“What I kept hearing was that half the team at (the University of) North Carolina — which was the dominant women’s soccer team at the time — had come out of our state, because the UW isn’t interested in women’s sports,” he said.
About the same time, Washington’s Supreme Court ruled state colleges must factor in football — the traditional big-money sport — when setting required gender-equity standards for their intercollegiate athletics programs.
“That put WSU in a pickle,” Jacobsen said. “They couldn’t afford to pay for women’s sports and stay in the Pac-10. They were frantic, so we looked for a solution.”
Along with authorizing tuition waivers, the Legislature spelled out that four-year colleges must provide “athletic opportunities for an underrepresented gender” at the same rate as that gender participated in high-school sports.
The law complies with Title IX — the landmark 1972 federal legislation that outlawed gender discrimination in higher education — but was based on Washington’s Equal Rights Amendment.
The policy initially included a sunset provision that would end the waivers after eight years, but lawmakers extended them in perpetuity in 1997 after the measure proved successful.
Among its achievements, the policy helped launch the UW women’s softball and soccer programs and helped Washington schools build and improve athletic facilities geared toward women athletes. It also increased their overall participation in sports.
But the policy hasn’t been immune to criticism — especially these days.
“The athletics department has the money to at least start winding down these waivers if it wanted to,” said Randy Beam, a UW communications professor.
Tuition support eroded
At the time the law was passed, the state paid most of a student’s education costs, meaning the tuition waivers were “more or less a state subsidy,” Beam said. Today, students pay the bulk of their education costs.
“Basically, you have tuition-paying students subsidizing the opportunity for a relatively small group of undergrads to get a reduced-cost or free education in return for participation in an extracurricular activity,” Beam said. “That’s what this situation boils down to.”
As a faculty member who has seen funding for academic departments slashed in recent years, Beam said he’s raised his concerns to UW administrators, but has gotten no traction. Some officials have pointed out other state schools draw even more athletics subsidies beyond gender-equity waivers, he said.
“There’s also a concern that ending the waivers could undermine UW’s commitment to gender equity in sports, and that’s not an outcome that anyone, including me, would consider desirable,” Beam said.
Yet with or without the waivers, the UW still would be legally required to meet state and federal gender-equity targets.
“Today, the athletics department has the resources to pay for this,” Beam said. “So, I don’t see why there’d be any cuts to Title IX programs if (the waivers) ended.”
Another criticism is that especially for the state’s largest university, the UW, the waivers amount to a football subsidy, said Jennifer Hoffman, a UW education professor who teaches about gender equity in sports.
UW football, which last year generated 82 percent of the athletic department’s $85.1 million in revenues, and men’s basketball, which produced 15 percent, are the department’s only significant moneymakers. Together, they cover operating costs for all of the UW’s 22 sports programs, including 12 for women.
The school spends more money on football than any other sport. Last year, it spent $24 million on football — $9 million more than the total spent on all women’s sports combined.
Meantime, Washington State University, the state’s other big-time football school, struggles to cover its overall athletics costs. Even after receiving nearly $4 million in gender-equity waivers and other subsidies last year, WSU’s sports department still reported a $4.9 million loss — its third straight year in the red.
Because the UW athletic department is self-sustaining, some critics contend the tuition waivers simply allow it to free up an extra few million each year to spend at its discretion, such as on football coaches’ pay, said Hoffman, who noted she doesn’t share the criticism.
Woodward also disagrees with such arguments.
“If these (waivers) suddenly went away, do you think football is going to suffer one bit?” he asked. “Of course not.”
Rather, the proof of how such money is spent can be seen in the school’s robust women’s athletics programs, Woodward said.
“It has given opportunities for young women to compete at this level and allowed us to do great things.”
The contributions edge
Today’s financial success for UW athletics largely is buoyed by two growing revenue pots: Contributions from benefactors and the university’s cut from yearly revenue shares from its host athletic conference, the Pac-12.
Of its $85.1 million in total operating revenues in 2013, the UW athletics department garnered more than $27 million from contributions, which have climbed 166 percent since 2005. Contributions include individual and corporate donations that come with perks, such as special access or luxury seating for sporting events.
“We’re very lucky to have generous donors and loyal fans in a great market in Seattle,” Woodward said.
Success on the football field helps. Washington’s athletics department fell into a fiscal pit when its football team hit hard times last decade.
The Huskies worst season, when the team posted a 0-12 record in 2008, coincided with the Great Recession. In 2009, the UW athletics department reported $6.6 million in operating losses, as contributions fell off by about $5 million from two years earlier.
But in the years since, as the football program’s success has rebounded, so have donations.
The Pac-12 also inked a $3 billion, 10-year TV deal with ESPN and Fox Sports in 2011 that will pay each school an average of $21 million per year. For the UW, total distributions have since skyrocketed — to $22.5 million last year, up by more than $6 million from 2012.
Still, Woodward warned financial success in college sports is “an anomaly.” Potential pitfalls always loom, he said, including concussion liability and the possibility colleges will one day have to pay student athletes.
“This business is very cyclical,” Woodward said. “We’re in a bullish period of revenues right now. … But frankly, it’s just one of these things you never know.”
Yet, reports show the UW athletics department has turned a profit in seven of its past nine years, including the last four straight. At least part of that excess revenue is set aside for required budget reserves, a UW official said.
Projections last year also show the department’s operating revenues will only keep climbing — to nearly $112 million by 2016-17. After subtracting projected expenses and debt service, the department still projects to net $6 million to $7 million annually over the next three years.
But while Woodward said he generally opposes athletics subsidies, he makes an exception for gender-equity tuition waivers, which started long before he arrived in late 2008.
“If (the state) wants us to continue what we’re doing,” he said, “just be careful when you start whacking down and making decisions on these things.”
Lewis Kamb: email@example.com or (206) 464-2932. Twitter: @lewiskamb