Even the Mighty Can Fall
On May 3 a number of news outlets reported the story that the Florida State athletic department may be forced to cut as much as $2.4 million in expenses for the 2012-13 budget year so that the budget can be balanced. Athletic director Randy Spelman attributed the shortfall to declining revenues from the sale of football tickets.
Among the cuts outlined by Mr. Spelman are an across –the-board cut of 10% in spending for recruiting and travel for every sport sponsored the university. The proposed budget projects a decline of some $550,000 in football ticket sale revenue from 2011-12 to the upcoming year. That continues a 3 year trend of declining ticket revenues as attendance has fallen significantly.
The Seminole football team finished in the top 4 in final season football polls every year from 1989 to 2002. Over the past 3 years the Seminoles have only had a record of 26-14. They have only been to one bowl game and have not beaten their chief rival, the University of Florida.
This downturn on the field has also led to a decline in athletic department giving. Four years ago Seminole Boosters, the organization set up to handle donations to athletics, reported total donations of $42.4 million. Last year these donations had dropped to $32.7 million. Increases in TV revenues and the success of the FSU men’s basketball program have not been able to offset these declines.
Florida State becomes the second Atlantic Coast Conference (ACC) member in six months to announce steps needed to erase athletic department operating deficits. The University of Maryland announced last fall a plan to cut 8 varsity sports to deal with a $4.7 million budget shortfall. The University of California and Rutgers University have also within the past year admitted that their athletic departments would have to make significant cuts because of budget concerns.
Both schools have been criticized for waiting to notify university officials and coaches about the looming problems until long after the problems had begun. At FSU one leading booster called on Seminole fans to write major checks to boost donations to the athletic department.
For over two decades the FSU football program was one of the elite programs in the country. Its teams under Bobby Bowden won national championships in 1993 and 1999 and played for at least 3 others. When schools such as FSU and Maryland (which has historically had a very successful men’s basketball program) are facing difficult financial times it sends a powerful signal around the country.
Given the overwhelming importance of football as the engine that drives the money train for many athletic departments it is sobering to realize that a few down years on the field might translate into major problems for entire departments.
This story was major news recently in The Chronicle of Higher Education. Given the difficult financial times institutions of higher education are facing today, even major players in college sports can ill afford to have to deal with declining revenues in their football programs. In the investment world advisors tell clients to diversify their portfolios and not keep all of their money in one investment. This, however, may not be possible for college athletic departments. Is it possible that the goose may be able to kill the golden egg?