The California football team has yet to take its first snap under new head coach Justin Wilcox, but already, the University has punted, once again, on the future of Cal Athletics. There was one abundantly clear conclusion: "[Athletics] is not immune to budgetary cuts and must absorb its share of the budgetary pain in order to help solve the current budgetary crisis at Berkeley."
In an 11-page report issued on Monday by the Task Force on Intercollegiate Athletics, the 12-member panel made eight recommendations, reached over 18 meetings held over 10 months. None of those recommendations were to eliminate sports. The report itself states that many of the eight consensus recommendations it reached "have been offered before in one form or another in five previous reports on IA stretching back to the Smelser report of 1991."
The task force "was unable to reach a consensus on a number of important issues," because of the complexity of the University's relationship with Intercollegiate Athletics, but did agree that more oversight on Athletics' budget was needed.
The campus is attempting to rein in a $141 million structural deficit, with Athletics, because of payments made on California Memorial Stadium, contributing approximately $22 million this year (for FY18, that number is expected to be cut by $4.65m). The University has included the so far interest-only payments on Memorial Stadium ($18m annually) in Athletics' operational budget, a fact which is not expected to change. The report says that the school cannot have a 30-sport program (the largest among public schools in the Pac-12), have a balanced operating and capital budget and have the entire interest expense for the stadium project on its books.
Beyond that, "'Institutional support' appears as a revenue item, but is entirely offset by an expense item termed 'transfers to institution.' The latter is calculated as a percentage of IA’s revenue," the report says.
http://www.scout.com/college/california/story/1735771-task-force-holds-d... Page 2 of the report says: "The task force was unable to reach a consensus on a number of important issues in part because of the very complicated trade offs involved, the complexity of the issues, the inability to secure an outside operational review of IA prior to the preparation of this report, limitations of data and analysis, and the very different perspectives of the members of the task force. In particular, the task force was unable to reach a consensus recommendation regarding “an appropriate scale and scope for IA’s overall program, including the number of programs and roster sizes” as detailed in the Chancellor’s charge."
Chancellor Nicholas Dirks, who will soon leave the post and be replaced by Christ, issued a joint statement with his successor, that read, in part, "We want to offer assurance that even as all options remain on the table, no decisions have been made."
The main recommendations are as follows:
1) An independent review of Athletics' organizational structure and financial controls, conducted by a third party "with credibility among the entire campus community." That report should focus on reducing administrative costs, and costs not directly related to sports programs. Translation: There's too many administrators making too much and doing too little, and they need to go.
2) Improve governance and clarify lines of communication. Athletics should submit an annual budget and a 3-5 year budget, with the annual budget honored quarterly. These would determine the annual level of "institutional support." Beyond that, "institutional support," the report says, "should be separated between that required for operating costs and that required for capital costs." Any "special items" in excess of $1 million will be submitted to an Executive Committee that reviews expenditures. That report should require who authorized the expenditure and how it was paid for (i.e. litigation, severance agreements, etc.).
3) A more significant role for the Vice Chancellor Administration and Vice Chancellor for Finance in the Athletics budgetary review process.
4) That the campus hire outside professionals to manage and optimize the use of Memorial Stadium (which has limited use because of agreements the University made with the neighboring Panoramic Hill Association before construction).
5) Additional assessment on the ability to monetize "underutilized facilities," or making them available to campus.
6) Directly from the report: "We recommend that the impact of IA on philanthropy to the entire campus be considered in any analysis of the campus’s net cost or benefit from IA. Athletics is the “front porch” to many donors, and any programmatic changes have the potential to significantly impact overall giving." Basically, the cutting of sports will have an impact on not just Athletics, but on overall campus philanthropy, and that should be considered, moving forward. Again, that's something that's been in previous reports.
That front porch argument can't be understated. The hostility of donors to the University from the 2010 attempt to cut five sports, including baseball, men's and women's gymnastics and women's lacrosse, while reducing rugby to a "varsity club" sport still rankles those associated with the programs. Furthermore, several individuals associated with vulnerable programs have said that the impact of the current Task Force -- and the uncertainty surrounding them due to rumors of cutting sports -- has damaged recruiting and philanthropy. Baseball, in particular, has had difficulty bolstering its term endowment because donors don't want to give money to a program that may not be around in 2-3 years. Several sources close to Athletics have expressed concern that incoming chancellor, Christ, will be the one ultimately making the decisions on which sports will be cut, should that happen.
“There is no doubt that this process has taken a toll on our department and has impacted recruiting, philanthropy, the ability to retain and recruit coaches and staff, and staff morale,’’ said athletic director Mike Williams, who served on the task force.
7) That the campus respect all written donor agreements made to support various sports (i.e. baseball, rugby and men's rowing).
8) That a campaign be established to provide permanent funding for Athletics.
That final recommendation is perhaps the most important. Other large, major public schools (Michigan, UCLA, Texas) have endowments to fund Athletics expenses. Cal has partial endowments for some sports, a term endowment for baseball (which is running out) and not much else.
On the point of No. 6, the report elaborates on what the possible costs and benefits of cutting the "scope of the program" would be: A potential $25 million drop in donations if the Athletics department is substantially downsized. Many of the biggest Athletics donors like the Goldman family, Stu Gordon and others give six-figure donations to the University, outside of donations to Athletics.
If the scope of the program were reduced, what would be the potential savings? To bound the problem, we received estimates that reducing the number of intercollegiate sports from 30 to the NCAA minimum of 14 might produce an initial annual savings on the order of $9- 12 million. In addition, total IA annual capital spending of $7-8 million might decline to $3-4 million. Substantial uncertainty surrounds both of these estimates.
Set against these savings is the effect that reducing the number of sports would likely have on philanthropy, not only to IA but also to the entire campus. Development staff estimates that the initial annual impact could be on the order of $25 million. While this estimate is consistent with that made in the 2010 report, this number, like the estimated cost savings from reducing sports, is subject to great uncertainty. Notwithstanding this uncertainty, any recommendation must consider the net cost of scope savings after taking into account the potential reduction in philanthropy.
There was another point of controversy, along with the debate about the scope of the program, and that centered on Title IX. All members of the Task Force "endorse the principles of gender equity in Athletics, and the letter and spirit of Title IX," the report says, but while currently, Cal occupies Prong 3 (requiring the accommodation of the interests and abilities of the under-represented gender), the cutting of any women's sport (which would be necessary should the University decide to reduce the scope of the program) would precipitate a massive cut in men's programs.
http://www.scout.com/college/california/story/1740328-task-force-on-athl... "In effect," the Task Force said, "this requires that Cal add a women’s varsity sport when there is unmet interest, sufficient ability to field a team, and sufficient competition within the our normal competitive region. Such additions have the potential to be a budgetary burden in the future."
In short, Cal could only add, but not subtract, any women's sport.
Because 52% of undergraduates are women, and 42% of intercollegiate athletes at Cal are women, Athletics cannot, at present, occupy Prong 1 (participate opportunities reflect the gender distribution of the undergraduate population).
Some members of the Task Force preferred Prong 1, from a gender equity standpoint, but as stated in this site's report in December, it would mean that cutting a sport as small as women's golf (10 women) would result in a cut of 180 men's spots.
Other members of the Task Force noted that Prong 3 provides greater flexibility should the undergraduate population continue to shift toward female students, and those members felt that the spirit of Title IX is to "provide participation opportunities for women, not to reduce them for men."