Question

Central University of Illinois has a newly appointed president, Catherine Husker. This has been a challenging budget year due to the difficulties of getting a state budget passed in the State Legislature. It appears from all reports that the budget that may get passed will be only 90% of last year’s state appropriations for the University. This means the University will have to cut their own operating budget for next year because of the State’s expected reduction in appropriations to higher education.

Husker just had a meeting with the athletic director of the university, Gareth Connor, to discuss the budget for the athletic department. Central University has been a men’s football and basketball powerhouse for the last several decades. However, the women’s athletic program has had less success. Last year, though, the women’s basketball team was one of the team’s selected to participate in the NCAA Women’s Basketball Competition through an “at-large bid” due to their outstanding season.

Connor and Husker discussed the 2020 Athletic Department budget, which Connor believed was the final draft. The meeting did not go well. In fact, it went terribly.   Husker discussed four grave concerns she had about the Athletic Department budget and requested Connor to review and revise the budget in light of her concerns below. Draft II of the budget is due in two weeks time.

Concern 1: The Athletic Department is budgeting a loss of over $3 million. Given the tight fiscal position of the university, this outcome is unacceptable to Husker. A budgeted loss of $1 million is the most she will tolerate for 2020. By 2021 the Athletic Department has to operate with a balanced budget. She tells Connor this is nonnegotiable.

Concern 2: The low allocation of money to the women’s athletic program. Fox Valley News, a tabloid television show, recently ran a program titled “It’s a Man’s World at Central University Athletics’ Program.” Husker said Connor is treating woman athletes as “third-class citizens.”

Concern 3: The low academic performance of the men’s football athletes, many of whom have full scholarships. She notes that the local TV news recently ran an interview with three football-team students, only one of which “exemplified the high academic credentials she wants Central to showcase to the world.” As for the other two students, she calls one student “incoherent” and another “incapable of stringing sentences together.”

Concern 4: The outrageous salary paid to “Bull” Mason, the football coach. She notes it is twice that of the highest paid academic person on campus, a Nobel Prize winner. Moreover, Mason receives other payments from his “Football the Central Way” summer program for high school students.

Below is Draft I of the Athletic Department Budget:

Central University 2020 Athletic Department Budget ($ millions)

Revenues:

          Men’s athletic programs                      $10.350

          Women’s athletic programs                     0.780

          Other (endowment income, gifts)            3.400       $14.530

Costs:

         Men’s athletic programs                      $11.040

          Women’s athletic programs                     2.800

          Other (non-assigned to programs)*         3.700       17.540

Operating Income                                                              $( 3.010)

*Other non-assigned programs include rugby, soccer and volleyball

Men’s Athletic Programs:

                              Football       Basketball       Swimming              Other       Total

Revenues               $8.600         $1.500             $0.100      $0.150   $10.350

Costs                      7.400             2.700               0.300        0.640     11.040

Full Scholarships         37                 21                   6                  4        68

Women’s Athletic Programs:

                                                  Basketball       Swimming              Other      Total

Revenues                                   $0.600             $0.080      $0.100   $ 0.780

Costs                                            1.800               0.200        0.800       2.800

Full Scholarships                              11                   4                  2        17

REQUIRED:

Connor will be holding a half-day meeting with key officials of the Athletic Department (of which your team are some of these key officials) to discuss the university president’s concerns. In order for your team of officials to be prepared to discuss the concerns of the president at this meeting, please answer the following questions prior to the meeting.

Questions:

1. Who are the stakeholders? (Worth 5 pts.)

2. The Athletic Department is operating at a loss. What are some of the ways the Department can increase revenues? Are there any potential pitfalls or problems with any of your ideas? (Worth 10 pts.)

3. Are there any ways that the Athletic Department can decrease costs? Are there any potential pitfalls or problems with any of these suggestions? (Worth 10 pts.)

4. What are some of the gender issues that Husker raised and how would you attempt to address them? (Worth 5 pts.)

Answer 1

1. The stakeholders in this situation are Catherine Husker, Garreth Conner and the university students and staff.

2. -Since women are given a low priority in athletic programs despite giving a good performance, more focus on women's athletic programs would definitely increase the revenue.As can be seen , the costs of the women's athelete program are very high and there are no revenues to recover it. Focus on women athletic programs will help to recover this cost.

- Since the men's atheltic program is already a success, the rates can be increased for watching the program as it will generate higher revenues.

The potential problems are that men might not take well to women receiving a place of prominence since it has been the opposite situation past many years. Further, higher rate for the tickets might make people view the University has a money making institution.

3. The ways the athletic department can decrease costs are as follows:

- Since the football coach is paid an exorbitant salary, his salary can be cut down.

- Since many athletes who have full scholarships do not excel academically, a new criteria can be introduced which factors in academic and sport performance for grant of scholarships.

The pitfalls of these measures may be that the coach might quit due to decreased salary. There can also be an outrage among the athletes due to withdrawal of scholarships.

4. A new program on the University's athlete program accused it of treating its women as " third class citizens". This is primarily due to women not getting equal prominence as men when it comes to sports. This can be tackled by creating a quota for women scholarships and taking the number from 17 to say atleast 30 to stay on par with men.