Question

Chapter 7:  

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 2018 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 2018. By 2019 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 2017 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:

Who are the stakeholders? (Worth 4 pts.)

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 6 pts.)

Are there any ways that the Athletic Department can decrease costs? Are there any potential pitfalls or problems with any of these suggestions? (Worth 6 pts.)

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

Answer 1

1. Stakeholders => President Catherine Husker​,Athletic director of the university, Gareth Connor, Key officials of the Athletic Department, Men & Women athletes.

2. The Athletic Department is operating at a loss.Revenue can be increased by involvement in other sports basketball, swimming etc. Also revenue can earned from other non-assigned programs include rugby, soccer and volleyball.No I do not see any potential pitfalls or problems with any of your idea.

3.Athletic Department can decrease costs​ by reducing the salary paid to the team coach, linking scholarships to perfromance, reducing expenditure on non-assigned programs if it doesn't generate revenue atleast to match the cost.No I do not see any potential pitfalls or problems with any of your idea​.

4.Some of the gender issues that Husker raised are low allocation of money to the women’s athletic program, low academic performance of the men’s football athletes, many of whom have full scholarships.​ Allocation of money to women's athletic program can increased by showcasing that fat that 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 last year. Linking full scholarship to performance will bring fair & tranparency.