Trustees hear financial update on Intercollegiate Athletics

UNIVERSITY PARK, Pa. – Sandy Barbour, director of Intercollegiate Athletics (ICA), and Rick Kaluza, associate athletic director of finance, provided a status report today (Sept. 18), which included a review of the ICA organizational structure, sports sponsorship, various measures of institutional control, five-year historical and five-year prospective financials and a capital plan overview.

According to a report to the Board of Trustees Committee on Finance, Business and Capital Planning, Barbour indicated that ICA currently supports 840 student-athletes across 31 varsity sports (16 men’s and 15 women’s), with just over 60 percent of these student-athletes receiving some type of grant-in-aid/scholarship support. Effective Sept. 1, 2014, the broad-based student-centric recreation program, which included club sports, student intramurals, on-campus fitness facilities, tennis, aquatics and Stone Valley was transferred out of ICA and into Student Affairs.

Kaluza reported a net operating loss of approximately $1.3 million for the year ended June 30, 2014, and an ending cash reserve of $5.2 million after including the first in a series of three separate $10 million external loans.

Kaluza highlighted baseline budget projections that remain hampered by lack of conference bowl distributions and flat revenue streams over the short term but presented a number of revenue enhancement and expense reduction initiatives to close the budget gap over 5 years. Those initiatives included:

-- Improving football attendance beyond the current 88 percent of capacity;

-- Potential football ticket and parking price increases as early as 2015; 

-- Concession enhancements;

-- University reduction of interest payments related to payment of the $60 million NCAA fines;

-- Exercise caution in major maintenance and capital expenditures over the five years.

Barbour then addressed the progress made in athletics facilities since 2007. While some have been completed or are underway (e.g. Softball Stadium, IM Fields, Pegula Ice Arena, IM Building), others are in various states of progress.

Barbour concluded the presentation by acknowledging that the next five years will still be a critical period for ICA, financially. However, the combination of short-term financing and the implementation of a variety of potential revenue enhancements and cost reductions, combined with the ultimate restoration of bowl revenues and the potential of additional conference television revenues should brighten ICA’s prospects to remain financially self-supporting.

Last Updated September 18, 2014