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The Financial Crunch Around the Patriot League

If you blinked, you might have missed it: a tiny blurb at the end of a Morning Call article about "Kutztown boots soccer, sinks swimming teams". But the harsh realities of the credit crunch and Depression 2.0 finally hit home at Lehigh athletics in a measurable way:

Other area college officials contacted by The Morning Call said they know of no plans to cut sports teams.

Lehigh University, however, is trimming its athletic budget, spokeswoman Linda Harbrecht said.

''In response to the current economic climate, Lehigh is making reductions in total spending -- including the budgets that support the sports program -- in an effort to ensure that sufficient financial aid resources are available for current and future students,'' she said.

Pretty big news - that the budgets supporting the sports program are having cost reductions. Not the sort of thing you'd announce with fireworks, to be sure. But it's still a huge announcement that makes one wonder about the state of all the schools of the Patriot League - not just Lehigh - in the near future.

To be sure, these budget cuts didn't exactly come out of the blue. On February 25th, Lehigh president Alice Gast sent out an economic update which detailed the effect that Depression 2.0 is having on Lehigh's finances:

We have worked hard to constrain our budget and proposed the lowest tuition increase at Lehigh in 40 years. The undergraduate tuition and fees for 2009-2010 will increase by 2.9 percent over last year. We expect this will be among the lowest increases of any college or university.

In addition to restraining the rate of growth in tuition, we are taking steps to reduce expenses. For example, each department head has been asked to identify a 10 percent reduction in non-salary administrative expenditures for fiscal year 2010. These reductions, and savings we achieve in the current fiscal year, will be placed in the financial aid reserve.

...

All departments will reduce overtime and wage costs, and the Provost's Office will work with the college deans to reduce adjunct teaching staff costs by 15 percent. All new campus renovation and construction projects that are not fully funded by gifts will be put on hold, except renovation directly related to the arrival of new tenure-track faculty.

Certainly in retrospect, that February 25th announcement certainly seems to bear out what the Lehigh spokeswoman told the Morning Call with some specific numbers: 10% cost reduction across the board, which "adjunct teaching staff" wages getting chopped by 15%. And the cost of those savings are to be put, according to the statement, into financial aid - not just for athletes, but for all students with households that make less than $90,000 a year.

And Lehigh's not the only Patriot League school that's going to feel the crunch. A few weeks ago, the Patriot League also announced cost-saving measures for the entire league:

At their recent meeting, the Patriot League athletic directors unanimously adopted several cost-saving measures that pertain to the conduct and administration of the Patriot League regular season and Championships.

These measures were endorsed by the membership for implementation in 2009-10 and are in response to the current financial climate and anticipated budgetary impact on their respective campuses. It is expected that the measures will be in place for at least two years, pending further review of the economic condition.

Specifically, the measures adopted by the athletic directors include the creation of a sport specific travel squad size policy for all 23 sports, the elimination of awards banquets at League Championships for all sports and the use of teleconferencing for all head coaches meetings and select administrative committees.

"In response to the current economic situation we have adopted and will continue to review cost-savings policies that will save all of our institutions and the League significant money without altering the student-athlete competitive experience," said Colgate Athletic Director David Roach, Chair of the Patriot League's Committee on Athletic Administration."

In addition to the strategies already adopted, the athletic directors will continue to discuss cost-saving measures during their May meeting. In particular, they will focus on ways to reduce spending in areas such as the League governance meeting structure, officiating, regular-season scheduling policies and Championship formats.


While nothing was said about sport-specific or school-specific initiatives to cut costs, it does make one wonder: what might happen to the postseason banquets sponsored by the University? The Wednesday "meet the team" conferences at the Copperhead Bar & Grill? The TV programs shot and paid for by the athletic department? Can they be justified when the League itself is shutting them down for their championships?

It also makes one think: Can football scholarships really be on the table when this is happening around the Patriot League?

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As has been reported elsewhere, Fordham's football program (in which they are an associate member in football, and in the Atlantic 10 in all other sports) has reportedly delivered an "ultimatum" to the Patriot League: offer scholarships, or we're going to take our chances as an FCS independent in 2010. For Fordham, who is already at 58 equivalencies, this wouldn't mean that much more spending. To them, it seems like a simple accounting change: just change it from the "need-based" column on the balance sheet to the "scholarship" column, and that's it.

For nearly every other Patriot League program, however, there would be some extra costs incurred to the atheltics department with the changes, whether to increase the amount of financial aid to match Fordham's number, or to increase the amount of partial aid to become full aid for exisitng football players - and the resulting women's scholarships that might be required with Title IX.

For Lehigh, who is widely specualted to be runnning with around 50 equivalencies, this may not be a huge deal to change some partials and ramp up a few men's scholarships. But for a school like Georgetown - who is more likely to be around 30 - this could be a deal-breaker.

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Prof. Murray Sperber of Indiana (PA), a published author who has been critical of university athletic departments in the past, recently commented on Georgetown athletics in the New York Times concerning the influence of March Madness. Here's what he said about March Madness, Georgetown, and Georgetown football:

The money is less a bonanza for colleges and universities than a lottery. To get a ticket, the N.C.A.A. requires every Division I school to have many teams in many sports and many athletes on scholarship — and almost all of these teams are in money-losing sports. Indeed, last year in the Chronicle of Higher Education, the N.C.A.A. conceded that almost every athletic department in the United States, including those at schools participating in March Madness, generates red ink.

...

In the last decade, the N.C.A.A. has raised the cost of its lottery tickets. As a result, a number of schools like Georgetown University, with outstanding basketball teams but no Division I football squads, were coming close to breaking even in their athletic department finances until the N.C.A.A. stepped in and required the school to field an expensive, money-losing football program.

It's an incorrect statement that the NCAA "required" them to field a football team - that's ridiculous, otherwise teams like, say, Gonzaga and Marquette would be "required" to field football teams as well. But the assertion that Georgetown's athletic department would break even without football is another issue entirely, and could very well be true.

[UPDATE: A rabid Hoya fan has contacted me and said that this is not the case.]

That they're doing so despite such a financial challenge is a real tribute to the Hoya football program - but it also shows how precarious the financial sitation their athletics department is perceived to be in.

Georgetown, and the other Patriot League football schools, haven't formally announced anything about cutting costs at their schools - yet. Lehigh's announcement will probably mean the other Patriot League schools, one by one, may announce some cost cuts of their own soon.

The signs are mixed at the other football schools.

Fordham seems ready to spend what it takes to enable scholarships, But at Bucknell, who was recently anointed one of the most expensive universities in the country, a brand new "virtual campus tour" was unveiled - perhaps to cut down on costs of having students make the trip to Lewisburg to visit. At Colgate, prexy Rebecca Chopp is stepping down to become president of Swarthmore - and leaving behind some unfinished fundraising for an ambitious building project ahead. Neither Bucknell or Colgate seems like they are in great positions to expand athletics.

[UPDATE: Bucknell's athletic director has weighed in on this issue in a formal statement. "[I]t is evident that our department is going to be facing unprecedented financial challenges moving forward...For Bison Athletics, this means that for the foreseeable future, we will not be operating in the mode of 'business as usual.' While we do not yet know the full extent, it is almost certain that our department, like many others at Bucknell, is going to be faced with an operating budget reduction."]

But Lafayette, who just recently completed the multi-million dollar Kirby Sports complex, seem do be doing fine: their big concern over the past month has been how to work their Coke contract to allow the Pepsi-sponsored Gatorade Replay to occur in a few weeks at Fisher Field, the original place where the Easton/Phillipsburg football game occurred. (Lafayette and Pepsi worked through their differences.) And at Holy Cross, the news has been about expanding scholarships, not contraction: the Crusaders recently announced that in order to stay competitive, they will start offering scholarships in ice hockey, men's and women's soccer, and field hockey starting this fall. At a minimum, they seem like they are status quo - or, like in Holy Cross' case, they're expanding spending.

It's hard to see this landscape as positive in regards to adding extra spending.

****

Around the area, schools are making changes. Rutgers is charging $10 more per seat per football game in order to generate (they hope) more revenue. Kutztown is chopping men's soccer and swimming to save money. Iona chopped non-scholarship football at the end of 2008 to save money. Tuition in places like Manhattan College are going up.

You'd think Villanova, with their Final Four appearance on the way this weekend, would make a mint from their athletics programs, but in this Philadelphia Inquirer article they state that Villanova atheltics survives with a $13.9 million subsidy from the university. While this weekend will be a boost to the university, you know there are plenty of folks that wonder: at what cost?

The credit crunch is affecting every institution of higher learning in this area, every school in the Patriot League, and every school nationally. Everywhere athletics departments will be asked to do more with less. That seems to be the only prediction that can be made for 2009.

Comments

DFW HOYA said…
"But the assertion that Georgetown's athletic department would break even without football is another issue entirely, and could very well be true."

Not true.
ngineer said…
I would think going back to Mens' an Womens' Doubleheaders in basketball would save significant travel costs. No reason both teams can't travel on one bus to where ever.
I would also expect across the board expenditure cuts in athletics regarding expenses outside of the grants in aid.

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