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May 13, 1999

Athletics subsidy reduced slightly

Athletics subsidy reduced slightly

Depending on how you keep score, intercollegiate athletics cost Pitt either $7.38 million or $10.55 million more than the program earned during the fiscal year that ended June 30, 1998.

The $7.38 million "unrestricted actual" figure represents revenue and expenses directly attributable to the athletics department. This number more accurately reflects Pitt's subsidy of athletics, department administrators argue.

The $10.55 million figure includes additional, indirect costs that Pitt attributes to athletics, such as building depreciation and administrative overhead.

Pitt's unrestricted support for athletics was $264,229 less last year than in FY 1996-97, even though the department's expenses increased by $3 million.

Athletics Director Steve Pederson and Jim Earle, associate AD for business, finance and personnel, reported on athletics finances at the April 30 meeting of the University Senate budget policies committee.

"Overall," Pederson said, "we're very pleased with what we're presenting today because it reverses a trend pretty dramatically over what's happened over the last few years."

A year ago the athletics department attributed Pitt's unusually high $7.6 million unrestricted annual subsidy in FY 1996-97 to a number of one-time factors that year: the hiring of a new AD and football coaching staff (Pitt continued to pay their predecessors for much of the year), a weak home football schedule and the loss of two Civic Arena basketball games, among other factors.

During FY 1995-96, Pitt's unrestricted actual subsidy had been just $4.9 million.

Athletics is budgeted to receive a $7.96 million unrestricted subsidy during the current fiscal year. With seven weeks left in FY 1998-99, "the projection is that we'll be right on budget this year" despite disappointing seasons for the football and men's basketball teams, Associate AD Earle said.

For the fiscal year that ended June 30, 1998, athletics department revenues increased by $3.3 million over the previous year, from $9.2 million to $12.5 million.

The biggest increases were in the following areas:

Ticket sales (a $1.2 million increase, all of it generated by the football team). Pederson and Earle attributed the increase to better marketing and a successful 1997 season.

Pitt still had to subsidize football last year by $779,249. But that was down from $2 million in FY 1996-97. For the current fiscal year, the football subsidy is budgeted at $543,993.

Football is one of the NCAA's two so-called "revenue producing" sports. The other is men's basketball, which does generate more money for Pitt than it costs. But basketball revenue surpluses are declining: from $594,083 two years ago to $458,154 last year, with a budgeted surplus of $189,325 for the current fiscal year. Pederson attributed the decline to disappointing seasons and limited seating in the Fitzgerald Field House.

Liberty Bowl ticket sales/guarantee receipts ($890,231). It was Pitt's first bowl game appearance in nine years.

Marketing/corporate sponsorship ($775,100). "This was the result of aggressive partnering with corporations in Pittsburgh to get them on our team. We see the corporations as representing a major revenue opportunity for us," Pederson said.

Athletics department expenses increased last year by $3 million, from $16.9 million to $19.9 million.

Women's sports accounted for much of the increase. To comply with federal Title IX requirements, Pitt has created women's soccer and softball teams in recent years, and gradually will add even more women's sports. "We don't want to just throw new teams on the field without the right kind of preparation," Pederson said.

Over the last two years, Pitt has increased its subsidy of women's sports by $1.04 million, to $4.97 million.

During that same time, the subsidy for men's sports increased by $272,439, to $3.98 million.

"And we still have a way to go to be in full compliance" with Title IX, Pederson said.

In general terms, the law requires universities to:

* Allocate equal resources to women's and men's sports.

* Expand opportunities for female student-athletes.

* See to it that the ratio of men and women on university sports teams is the same as among the student body. In recent years, women have made up slightly more than 50 percent of Pittsburgh campus undergraduates, but not nearly that high a percentage of student-athletes. This year, 290 men and 158 women competed on Pitt intercollegiate sports teams.

"We're in compliance with the first two requirements, but we can't quite catch up fast enough on the third," Pederson said. Creating softball and women's soccer teams added just 45 female players, he noted.

Other major expense increases last year included:

Liberty Bowl travel and expenses ($533,057).

Additional team travel ($527,047). To allow players to compete to the best of their abilities — and, in some cases, just to protect their safety — Pitt's non-revenue producing teams began traveling and sleeping in better style last year.

"Sleeping four or six or even eight people to a room, which used to be common for some of our teams, just isn't healthy," Pederson said. "Starting last year, we reduced it to two to a room."

Also, players and coaches on non-revenue producing teams now travel by bus, with professional drivers. "It used to be that the wrestling team, for example, would be traveling by van at 2 a.m. [after some matches], with one of the coaches driving. That's dangerous," Pederson said.

Gameday marketing of football ($352,400), including pre-game "Fan Fests" and PantherVision shows during games.

After Pederson described efforts to make Pitt Stadium more "fan friendly," budget policies committee member Sean Hughes suggested that the University administration should follow athletics' example and adopt a "faculty friendly" policy.

"It's interesting," the education professor said, "that our athletics teams are sleeping two to a room in hotels, while most of the faculty have to travel on their own, without any University support whatsoever" to academic conferences.

The new Pitt Stadium scoreboard ($305,000) for maintenance beyond the capitalized cost of the scoreboard itself. When Pitt Stadium is demolished, Pederson said, the scoreboard will be saved and used elsewhere, although its new home has not been determined yet.

Printing/publishing ($214,365) increases related to Pitt athletics' new logo and team colors.

Moving home football games to the Steelers' new stadium in fall 2001 and building the convocation center will open up new opportunities for increasing revenue through increased attendance, sales of higher-priced exclusive seating, and improved player recruitment as a result of vastly improved facilities, Pederson said.

"As I told this committee a couple of years ago, our problem isn't with expenses. We've cut our expenses about as far as you can cut them. Our problem is with generating more revenue," he told the budget policies committee. "For the next couple of years, we're predicting, realistically, that it will be tough to increase our revenues by very much," Pederson said.

He estimated that construction of the convocation center will be finished two years after demolition of Pitt Stadium begins. But Pederson said he doesn't know when the demolition will start.

Pederson denied rumors that the Steelers are proposing to pocket all income from sales of food and other items during Pitt football games in the new stadium. "I feel very comfortable with the agreement we're reaching with the Steelers on concessions and merchandising," he said, declining to reveal specifics of the deal.

Pederson said the University is searching for new, post-Pitt Stadium home sites for its track and soccer teams, "as adjacent to campus as we can get." The administration has a few locations in mind, Pederson said, but he refused to identify them. "As soon as you mention them publicly, the property prices shoot up," he explained.

Negotiations to upgrade the city-owned Mazeroski Field, adjacent to Mervis Hall, for Pitt softball games are progressing — slowly — while attorneys for Pitt and the city work out details, Pederson said. Currently, the softball team plays at Frick Park.

"There's no political opposition to the idea," Pederson said. "It's about permit and usage issues, and who's going to do what." He called it a win-win proposal, with the University helping to upgrade the field and the city retaining access when Pitt's softball team isn't using it.

— Bruce Steele

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