Athletics at UC Berkeley run record $13.5M deficit

0 Comments | Oakland Tribune, Dec 28, 2006 | by Matt KrupnickSTAFF

BERKELEY -- From college football's frenetic bowl season to the ultrahyped March Madness, it would be easy to assume sports is a financial boon to college campuses.

At the University of California, Berkeley, however, sports funding has been largely a one-way stream. In the 2004-05 fiscal year, the university spent about $13.5 million more on athletics than it earned, its highest deficit ever.

With Cal's long commitment to sponsoring a broad range of sports in jeopardy, university leaders say they've found ways to raise money without cutting sports. If all goes well, the athletics department could be self-sufficient within 10 years, said Nathan Brostrom, a former banker who became UC Berkeley's vice chancellor for administration this year.

The new revenue would allow Cal to maintain an athletics program that is second in size only to Stanford's among Pacific-10 Conference schools. Cal has 27 teams; Stanford has 31.

But other than football and basketball, few teams bring in enough money to cover their expenses.

According to financial information sent to the U.S. Department of Education, Cal's football and men's and women's basketball teams brought in more than $25 million in the 2005-06 fiscal year. The other 24 teams made less than $8million combined.

The income shortfall has forced the university to pay the difference from its general fund, which also pays for a variety of other campus programs.

But the recent success of the football team in particular has brightened the financial picture for the athletic program as a whole. Cal -- with five straight winning seasons -- will play Texas A&M in the Holiday Bowl today, a far cry from the team's 1-10 record in 2001.

The on-field success has allowed administrators to renegotiate apparel, licensing and marketing contracts that have been in place since Cal was a Pac-10 doormat. Combined with proposed investment tactics and increased fundraising, administrators say they believe they can turn around a deficit that has plagued the department for at least a decade.

Chancellor Robert Birgeneau said he was shocked when he opened the financial books after taking over the campus in 2004.

"When we did the in-depth analysis, we discovered the shortfall was somewhat larger than we previously thought," said Birgeneau. "We absolutely have to decrease the size of the deficit."

Even at football-crazy Cal, not everyone agrees that one of the country's foremost public universities should sponsor a top-tier athletics program. Some faculty members among those on a committee to help solve the deficit have advocated a change of direction.

"I've been studying infections all my life, and that's what this is like for the university," said Loy Volkman, a UC Berkeley virologist who was on the panel. "I don't think we have any business doing it like this. What other part of university life loses $13 million per year?"

Volkman and others also have balked at spending so much on the program when most Cal athletes are admitted to the school only because of relaxed academic standards.

But Birgeneau, the former president of the University of Toronto and dean at the Massachusetts Institute of Technology, said UC Berkeley's broad sports program is essential to the campus and school spirit.

"The esprit among undergraduates is much higher here than it was at Toronto," he said.

The debate has come at a pivotal time for the athletic program. Cal is preparing dramatic renovations of its sports facilities, but residents and city leaders are fighting the proposals with several lawsuits.

Brostrom, the university's administration and budget chief, said very few UC Berkeley programs -- athletic or academic -- break even. Cutting the less-profitable sports teams would save very little money, he said, and the school needs to preserve its women's teams to comply with federal gender-equity laws.

One of the most attractive alternatives, leaders said, is to raise an endowment for each team, from which the interest would pay most expenses. But that would be expensive as well: It would take a $40 million endowment to allow water sports to break even, Birgeneau said.

The chancellor said he intends to ensure the athletic program follows the cue of the university's top-ranked academic departments.

"Everybody understands the importance of intercollegiate sports to the Cal community," Birgeneau said, listing several teams among the nation's best. "If we're going to have intercollegiate sports, we should make sure they're all competitive."