Washington State University’s athletic department is reporting an approximately $31.7 million operating deficit as of January for the current fiscal year.
The department’s outlook was discussed during Thursday’s WSU Board of Regents meeting. University officials said the deficit climbed $9.7 million since athletics reported a $22 million gap in October, reaching a level similar to a $30.4 million deficit reported in August.
Athletic director Pat Chun said the biggest impact came from canceled football games. He said the Pac-12 Conference played only 31 of 45 games required by the conference’s media contract, resulting in an approximately $70 million loss leaguewide. Men’s basketball fared better, completing 97% of contracted TV games, Chun said.
For WSU, university data show revenues dropped $9 million since October, with NCAA/Pac-12 distribution losses accounting for $7.8 million. In addition, bans on fans at all athletic events eliminated ticket, parking and concession revenues.
Expenses, meanwhile, went up approximately $700,000.
“Still, with basketball to complete and then with Gov. Inslee moving everyone to Phase 3, hopefully that means a little bit of something we can do with baseball, which would be nice,” Chun said, referencing the governor’s announcement Thursday that all counties could reopen more starting March 22.
Stacy Pearson, vice president for finance and administration, said the university hopes to return to the board in May with a recommendation for bridging the gap.
University officials have considered using $11 million in savings from debt refinancing done in October, most of which was refinanced from debt linked to athletic facilities. Pearson said a wrinkle with that one-time relief, however, is that the athletic budget would have to somehow account for that amount in future years in order to break even.
Other options included obtaining loan financing through the Pac-12 Conference or through general university revenue bonds like WSU does for other projects, Pearson said. Pearson did not recommend digging into university reserves, however, saying she doesn’t “feel as confident about where we are with our reserves to be able to do that.”
Across the university, the athletic department deficit is among the factors contributing to a $62.2 million revenue loss forecast for WSU’s overall budget for the year. Other factors include losses with housing, dining and parking revenues.
WSU is still waiting to confirm available levels of emergency state and federal aid. Through the $1.9 trillion American Rescue Plan Act of 2021, which President Joe Biden signed Thursday, Pearson said preliminary estimates show WSU is in line for approximately $61 million, of which slightly more than half would be earmarked for student emergency aid.
“I’m not saying here that we would use it to pay for athletics,” Pearson said, “but how can that help the university and our central reserves so that maybe we would be in a stronger financial position for the borrowing?”
The Board of Regents will weigh the options amid levels of scrutiny across the campus community, particularly from university faculty who are also concerned with a proposed $2 million to $3 million annual university subsidy for athletics, possibly starting in the 2022-23 fiscal year.
“We’re all competing, I think, for fewer dollars in an unknown environment,” said Greg Crouch, the Board of Regents faculty representative. “I think the faculty feel that the debt, especially this $30 million projected debt, is not addressing our core mission at the university. I think that’s where the controversy is. I’m not sure how to solve that.”
Acknowledging the faculty’s concerns, board members ultimately expressed confidence in Chun and the administration’s ability to bridge the gap. Board Member Lisa Keohokalole Schauer said she believes enrollment, especially at the Pullman campus, could decrease significantly “if our athletic department is not supported in the way that it should be.”
“There’s been a lot of changes: Coaching changes, a lot of different ways in which we can increase attendance at each of these events – and then COVID occurs,” Schauer said. “I’d like to see us find ways to invest deeper in not only our core mission, but in supporting students, and I think athletics is a big part of that.”