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The CSU athletic director has made his most public waves by suggesting that the university build a new, on-campus stadium. But a presentation he delivered to the CSU Board of Governors on Aug. 3 suggests that Graham has much more in mind for a department that he has controlled for less than a year.
The plan, as might be expected, includes character-building goals for athletes, winning games and ensuring players adhere to academic requirements. But perhaps the most interesting parts of his presentation were those related to a financial makeover of the athletic department.
According to the presentation, titled “The Case for Investment in Athletics,” the financial goals for the program are to “build athletic programs and athletic department capabilities that will enable the department to, over time, wean itself from university subsidies.”
Ideally, the presentation states, the department will become profitable and contribute revenue back to the university.
In making the presentation, Graham dug into financial details of the department that often escape the public’s attention.
Graham told the Board of Governors that CSU’s athletics budget in fiscal 2011 was $25.9 million, $9.6 million less than the average amount spent by institutions in the Mountain West Conference. This number accounts for about 3.3 percent of CSU’s total budget, below the conference average of 6.9 percent, he said.
CSU athletics’ revenue streams fall well below conference average as well. Ticket sales, donations and contributions, game guarantees, concessions, parking and programs, and advertisements and sponsorships all add up to $9.4 million, $5.9 million less than conference average.
“We are last or in the bottom quartile in all financial results that are tied to department business capabilities,” the presentation says. “The long-term solution is to develop winning athletic programs and effective business capabilities that deliver meaningful self-generated revenue.”
The presentation states that improving the program will require two things: people and capital. Specifically, the presentation calls for the hiring of as many as 15 additional employees at an estimated cost of approximately $1.5 million annually.
In addition, the presentation calls for releasing a $4.5 million reserve held by the athletic department so that those dollars can be folded into its operating budget and a capital infusion by the university that will average approximately $2.5 million annually over a four-year period.
Graham’s presentation also asks the Board of Governors to consider allowing the department to incur up to $15 million in debt, so long as it meets two conditions.
These conditions are that “adequate, unencumbered” capital is raised to finance the potential stadium to “minimize the risk that the department or the university will be over-burdened with debt service,” and that adequate self-generated revenue is being realized or is imminent to support the athletic department budget.
Other considerations proposed to the board include a $2 million increase to the department’s base university support above current scholarship levels and, of course, supporting the construction of the proposed stadium, a $246 million project.
In the event that the stadium is approved, it is supposed to be funded entirely through private donations and stadium revenue, but CSU has also said that a backup plan exists that involves getting a loan for between $167 and $270 million if the funds can’t be secured through other means.
The Board of Governors did not act on any of Graham’s suggestions. Its next meeting is in October.