Maryland unveils commission to help Terps increase revenue, cut costs
By Liz Clarke and Daniel de Vise,
University of Maryland President Wallace D. Loh said the school has spent more money than it generates on its varsity sports programs “for the past several years,” a pattern that has depleted the athletic department’s financial reserves.
In a statement addressed to the University of Maryland community, Loh made no mention of cutting sports in charging a 17-member commission with finding ways to increase revenue and reduce costs. But he laid the groundwork to do so — saying the commission should consider “all options” — amid austere economic times for universities nationwide.
A charter member of the Atlantic Coast Conference, Maryland boasts an ambitious array of 27 varsity sports for men and women. Few universities offer more than 25.
A state budget document for fiscal 2010, the latest data available, shows Maryland’s athletic program with revenues of $42.6 million and expenses of $43.4 million in that year. University spokesman Brian Ullmann said he couldn’t release the program’s balance sheet for 2011.
Administrators have used reserve funds to balance the budget, but now that fund is running dry. This year, the athletic department is plugging the hole by borrowing money from elsewhere in the university budget, said Linda Clement, vice president for student affairs and co-chair of the new commission.
“We’re facing a challenge right now, which is that our expenses are outstripping revenues,” Clement said. “And so we need to take a careful look at why that is so and how we can ensure that doesn’t happen [again] in the short term and in the long term.”
Clement said it was far too soon to talk about potential cuts to athletic programs: “We haven’t had a single meeting yet,” she said.
Maryland Athletic Director Kevin Anderson was on vacation and could not be reached to comment.
Any decision to cut sports is emotionally and politically charged, given the sentiments of alumni and the legal imperative of complying with Title IX, the federal legislation mandating equal opportunities for men and women at schools that receive federal funds.
Nonetheless, many universities have been forced to drop so-called “non-revenue sports” to keep their athletic departments solvent.
California-Berkeley was met with howls of protest in announcing plans to cut five sports (baseball, men’s rugby, women’s lacrosse and men’s and women’s gymnastics) last September, projecting a $4 million annual savings in paring 29 sports to 24.
Maryland has also struggled financially in football, which along with men’s basketball is one of the two typical “revenue” sports at college athletics’ top levels. Maryland fell more than $500,000 short of season ticket sales projections each of the past two seasons, according to school officials. And Byrd Stadium, which seats 54,000, was filled to 75 percent capacity only once during the 2010 season.
Maryland spent $50.8 million to create 64 luxury suites and 440 mezzanine seats at the football stadium, an expansion project that opened in 2009 to lukewarm response.
Loh’s statement opened with an acknowledgment of Maryland’s “long, proud and storied” sporting tradition and cited the many benefits of college sports. But, he added, the university’s commitment to sustaining athletic success “is now constrained by financial concerns.”
To that end, he appointed the “President’s Commission on Intercollegiate Athletics,” composed of university system regents, campus trustees and representatives of the university senate, athletic council, student government, faculty, staff, alumni and the Terrapin Club booster group.
Loh’s charge was three-fold:
“Review the finances and operations of Intercollegiate Athletics (ICA) and make recommendations to secure (a) greater excellence in academics and athletics and (b) financial sustainability;
“Make recommendations — based on a consideration of all options — on ways to increase ICA revenues and decrease costs, recognizing that longstanding budget issues may require a multi-year plan to implement any changes and restore budgetary stability;
“Be guided by the paramount commitment of ICA to the success of our student athletes, so that (a) they are well-supported to succeed in their studies and in their careers after graduation, and (b) they and every sponsored team are well-supported to be consistently competitive at the highest level.”
The panel’s recommendations to Loh are due Nov. 15. Anderson has until Dec. 1 to respond. Loh’s decision will follow Dec. 31.
Loh’s announcement seems to contradict the claim by former athletic director Debbie Yow that she had successfully balanced the Terrapins’ budget during her 16-year tenure. Yow, now athletics director at N.C. State, defended her record in reining in Maryland’s deficit spending.
“The staff and coaches worked diligently for 16 years to generate the funds needed to pay down the inherited $51 million dollar debt, balance budgets and also to create reserve funds to carry the department through challenging economic times, such as the serious recession over the last few years,” Yow wrote via e-mail. “The fans and donors also stepped up in a major way. Many athletic departments across the nation continue to face considerable financial challenges in this economic environment.”
Staff writers Steve Yanda and Eric Prisbell contributed to this report.