The Department of Athletics presented to the Board of Regents July 19 a proposed budget that projects an operating surplus of $1.1 million for the year ending June 30, 2002. The department also announced a projected deficit of $2 million for the 2001 fiscal year, a $3 million improvement over the budgeted deficit of $5 million.
We are pleased to project an operating surplus in 2002 after three consecutive years of actual deficits, said William C. Martin, director of athletics.
It is a constant struggle to balance our revenue streams, Martin added. The Athletic Department funds all of our sports to the full NCAA scholarship limit, and our mission of competitive excellence in all 25 sports comes at a significant financial commitment.
The favorable results for fiscal year 2001 resulted from continued cost control and greater-than-expected licensing revenues and donations, said Jason Winters, the departments chief financial officer. The proposed budget surplus for fiscal 2002 is primarily the result of the departments Nike contract renewal, increased football ticket prices for the upcoming season and higher television rights fees projected to be distributed through the Big Ten conference office.
Winters noted that while the Athletic Department projects an operating surplus for fiscal 2002, there are several long-term facility renewal and renovation projects that we need to address going forward. The department has budgeted for approximately $2.8 million in capital expenditures for fiscal 2002 that will be partially funded by cash reserves.
While we are pleased to have stabilized our operating cash flow, the net result is that we will have $1.8 million less in cash reserves at the end of next year after capital expenditures, Winters said. Reserves built up from operating surpluses in prior years were approximately $5 million as of June.
Winters also cautioned that the department still faces many financial challenges. We must make a significant investment in our aging physical plant, he said. In addition to addressing the programs long-term infrastructure needs, the costs of training, development and scholarship support for world-class student-athletes continues to grow.