Athletics deficit still on the rise
Published: Tuesday, May 1, 2012
Updated: Tuesday, November 20, 2012 17:11
Dozens of SMU students, faculty members and staffers spent the first Thursday of the 2012 spring semester celebrating a new era at the university — SMU’s invitation to join the Big East Conference.
The Hughes-Trigg Student Center was filled with excitement as President R. Gerald Turner announced that joining the Big East meant SMU had finally made it back to the national stage of college athletics.
What Turner didn’t say is that while SMU is enjoying greater success on the field and landing high-profile coaches like Larry Brown and June Jones, its athletic department is piling up substantial losses.
Over the past seven years, its losses have topped $113 million. The deficit is equal to almost half of all tuition and fees paid by students in the 2011 to 2012 school year.
The losses shocked students.
“After hearing this, I find it ridiculous and humiliating,” Mark Butler, a senior finance major, said. “With all of the smart individuals involved at this university, you would think that we could find ways to not burn through cash over such a secondary priority. I think any student should be outraged at this fact.”
The athletic department’s annual deficit rose dramatically after Turner selected Steve Orsini as athletic director in 2006.
During the three years before Orsini arrived, the athletic department lost an average of $12.9 million a year.
In Orsini’s first four years, the annual losses jumped to an average of $18.6 million — an increase of 44 percent.
Orsini acknowledged that the data was accurate, saying that SMU knows about the operating deficit and approves it as a part of the university’s budget.
The reality that the SMU Athletic Department loses money hardly makes it unique among U.S. universities.
What is startling — and unknown to most students — is the size of those losses.
A 2010 NCAA report examined the athletic department budgets of SMU and the other 119 Football Bowl Subdivision (FBS) schools.
Ninety-eight lost money. Between 2007 and 2010, the median annual deficit for these colleges was about $9.6 million.
During this same period, the SMU athletic department lost $18.6 million annually — nearly twice the median deficit of the other schools.
The total median deficit for the 98 FBS schools was $38.47 million from 2007 to 2010. The total deficit for SMU during that time was $74.42 million.
According to Dan Fulks, a Transylvania University accounting professor and research consultant for the NCAA, only about 15 of the 98 net loss schools lost more than SMU.
Dan Orlovsky, the faculty chair of SMU’s athletic policies committee, says SMU’s comparatively high losses are a result of little television money, low attendance at football games, high expenditures in recent years and travel expenses.
Orlovsky calls SMU athletics a business.
“It costs money to do business, that’s the bottom line. You can’t make money if you don’t put money in,” he said.
SMU officials deny that the athletic department operates under a deficit.
Instead, they consider it a budgeted university subsidy — an investment that brings national exposure.
According to a prepared statement issued through SMU’s Office of Public Affairs, Chris Regis, vice president for business and finance said, “Athletics does not operate with a deficit, rather is supported at an acceptable level from institutional resources as they do bring significant value to the university.”
Since 2006, Turner has served as the co-chair of the Knight Commission on Intercollegiate Athletics, a watchdog group that presses for greater fiscal responsibility and increased transparency by college athletic departments all over the country.
In April 2010, Turner told USA Today, “It’s important that these issues about athletic expenditures be brought out to where there is some public support for more rational approaches to this.”
Turner’s message apparently has not registered with the SMU Athletic Department. Kristopher Lowe, the associate athletics director for business at SMU, refused to provide spending figures to The Daily Campus.
“Based on the purpose of your request, I am not able to provide this information at this time,” he said in an emailed response.
While the athletic department wouldn’t provide budget documents, Brad Sutton, the associate athletic director over public relations and marketing, did say in an emailed statement that “The 2011 fiscal year was SMU Athletics’ best fundraising year to date, as the Mustangs added more than $6.5 million to the coffers in annual gifts, while also setting a record in royalties received.”
Still, the athletic department’s lack of transparency upsets some students.
“Students should definitely be able to see where the money is spent,” Ricky Townsend, a senior, said.