University Times

The finances of a college sports program aren't any less complex than zone defenses and academic eligibility rules.

For example, Pitt's NCAA Division IA athletics program cost the University either $4.87 million or $8 million more than the program generated last year, depending on how you calculate the program's revenues and expenses.

Athletics department administrators argue that the $4.87 million "unrestricted actual" number more accurately reflects Pitt's financial support of intercollegiate athletics than does the "total University support" figure of $8 million.

"The 'unrestricted actual' number represents the directly attributable revenues and expenses of the athletics department. It's the equivalent of the E&G [educational and general] budget of an academic school or department," said Joseph Phillips, associate athletics director for Administration.

While athletics required $4,869,407 in University "unrestricted actual" support last year, Pitt's administration had budgeted for $5,033,098. So the program actually came in $163,691 under its budget, Phillips said.

The larger "total support" figure includes additional, indirect costs that the University administration attributes to athletics, Phillips said. Examples of such costs include the program's share of Pitt physical plant expenses, building depreciation and administrative overhead.

"Total support" also takes into account several additional, miscellaneous revenue sources such as income from sports camps and clinics.

According to "total support" figures for the fiscal year that ended June 30, 1996, Pitt athletics generated nearly $9.95 million in revenues. Expenses totaled just over $17.98 million.

"Unrestricted actual" figures for the same year show that the athletics program produced $9.6 million in revenues. Major revenue sources included ticket sales and receipts ($3.4 million), NCAA/Big East revenue sharing ($1.94 million), television and radio ($1.47 million), student seating allocation ($1.33 million) and restricted gifts ($1.02 million).

But "unrestricted actual" program expenses totaled $14.48 million. The larger expenses were for salaries and wages ($3.8 million), student financial aid ($3.46 million), travel and business ($1.5 million) and fringe benefits ($1.27 million).

The men's basketball program produced $1 million more than it cost. But football, the other so-called "revenue-producing" NCAA sport, cost $1.12 million more than it earned.

Also failing to meet their expenses were the other men's sports (in which expenses outstripped revenues by $2.02 million), women's basketball ($992,710) and the other women's sports ($1.88 million).

Division IA represents the highest level of NCAA competition.

Like most Division IA schools, Pitt counts on revenue from its football and men's basketball teams to offset much of the cost of its other intercollegiate sports. Only a handful of elite sports powers such as Notre Dame and Michigan run self-supporting athletics programs.

* * * In a report at the Jan. 24 meeting of the University Senate budget policies committee, Athletic Director Steve Pederson and Associate AD Phillips said their department's expenses were "consistent with, and in many cases below" the average spent by other Division IA schools.

But revenues, especially from ticket sales and private giving, were "considerably less than our peers," they said.

Pederson, who became Pitt AD on Dec. 1, said in an interview: "Pitt's done a pretty good job of cutting expenses and costs. The greatest area for us to improve is the revenue stream. That comes down to selling more season tickets and corporate sponsorships, doing the kinds of things it takes to begin to fill our stadium and arenas.

"In basketball, we're a little more locked in because of the size of our arena [the 6,798-seat Fitzgerald Field House]. We've already sold all of the tickets needed to fill that place. But we're going to aggressively market tickets for football and continue to increase our base of corporate sponsorships." Pederson said a detailed marketing strategy hasn't been developed yet, but that Pitt will emphasize the pageantry, tradition and family-friendly atmosphere of its football games.

Pitt will do its best to win more football games, but a winning record needn't be a pre-condition for filling Pitt Stadium, Pederson said. Last year's budget figures compared favorably with those for the fiscal year that ended June 30, 1995, Pederson said. He noted that: * Operating revenue was nearly $2.2 million higher in FY 1996 than FY 1995. The improvement was mainly due to increases in ticket sales ($400,000), football television revenue ($1 million), Big East Conference revenue sharing ($400,000) and NCAA revenue ($300,000).

* Unrestricted budget support was $1.6 million lower last year than in FY 1995. Total University support was $1.7 million lower than in FY 1995.

* Last year, expenses for football and men's basketball combined exceeded revenues by $116,753. But in FY 1995, the gap was considerably worse — $2.5 million. * * * The report by Pederson and Phillips marked the first time Pitt's athletic department shared detailed financial data with a Senate committee (although athletics administrators did present a detailed financial report to the University Planning and Budgeting Committee last year during a closed-door session).

Budget policies committee members had been requesting such information for years. Committee chairperson Richard Pratt attributed the new openness to Pederson's hiring as well as new federal reporting requirements.

The new U.S. Higher Education Act, set to go into effect Jan. 1, 1998, will require colleges and universities that offer athletics-related financial aid to disclose an unprecedented amount of budget data on their athletics programs. The existing Equity in Athletics Disclosure Act requires less detailed disclosure of athletics finances by schools participating in Title IV or Higher Education Act programs.

Pratt said the Pitt athletics department's report "confirms what had been suspected but had been, up until now, fairly tightly restricted information — that the amount of University money invested in the athletics department at this point is quite substantial. The question now is, what do we do about that? "It's widely known that there is a strong commitment among the chancellor and Board of Trustees to maintaining a major college athletics program. I'm sure that among the faculty, you'll find a great division of views, including the opinion that Pitt should do away with big-time sports altogether.

"In the end, it's a question of what the University should be using its money for." — Bruce Steele