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Transcript of Maryland report on athletic department debt
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REPORTOFTHE
PRESIDENTSCOMMISSIONON
UMDANDBIGTEN/CICINTEGRATION
UniversityofMaryland
CollegePark,Maryland
June30,2013
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REPORTOFTHEPRESIDENTSCOMMISSIONON
UMDANDBIGTEN/CICINTEGRATION
UniversityofMaryland
June2013
Background
Intercollegiateathleticshavealong,storiedhistoryattheUniversityofMaryland(UMD)
thestatesflagshipinstitutionofhigherlearningandapreeminentpublicresearch
university.Since1892,whenrecreationalsportswereformalized,athleticprograms
havemadevaluablecontributionstothecampusandtheStateofMaryland,notonly
providingabasisforpersonalgrowthandpositivecampusspirit,butapointofcontact
foralumni,friends,supporters,andstudents.
Inthefallof2012,theUniversitybegananewchapterinitshistorywhenitwaspresentedwiththeopportunitytojointheBigTenConferenceanditsacademicalliance,
theCommitteeonInstitutionalCooperation(CIC).Aftercarefulexaminationofthe
implicationsandconsultationwithmajorstakeholders,UMDPresidentWallaceLoh
announcedonNovember19,2012,thattheBigTenacceptedUMDsapplicationfor
membershipstartinginacademicyear2014-15.MembershipintheCICwillbeginon
July1,2013.
InhisformalannouncementPresidentLohstatedthatmembershipintheBigTen
ConferenceisinthestrategicinterestoftheUniversityofMaryland.Itwillensurethe
financialvitalityofMarylandAthleticsforyearstocome.PresidentLohwentontopointouttheuniversity-wideadvantagesofjoiningtheBigTen,includingthecapability
toimprovesupportofourstudent-athletesintheclassroomandonthefield.He
furtherstatedthattheextensiveopportunitiesintheCICforcollaborationswithour
peerAssociationofAmericanUniversities(AAU)andflagshipuniversitiesineducation,
research,andinnovationwillboosttheUniversityofMarylandsascendancyin
academicexcellence.
OnDecember6,PresidentLohfollowedupbycreatingtheCommissiononUMDandBig
Ten/CICIntegration,whichwastaskedwithensuringthattheUniversitywasprepared
tocompeteintheconference,aswellastakefulladvantageofthenewopportunities
available.
MembersoftheCommissionwereappointedtorepresentkeyuniversityconstituencies:
BoardofRegents,UniversityofMarylandCollegeParkFoundationBoardofTrustees,
UniversitySenate,AthleticCouncil,UniversityofMarylandAlumniAssociation,
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undergraduateandgraduatestudentgovernment,StudentAthleteAdvisoryCouncil,
faculty,staff,administrators,M-Club,andTerrapinClub.Acompletelistofmembers
canbefoundattheendofthisreport.
ThisreportrepresentsmonthsofcollaborativeworkbytheCommission,andincludes
theresultsofitsfactgatheringandaseriesofrecommendationsdesignedtousherthe
UniversityofMarylandintotheBigTenConferenceandtheCICwithallpossiblesuccess
andbenefits.
TheBigTenConference
Formedin1896,theBigTenConferencehasattainedrecognitionasoneofthe
preeminentathleticconferencesinthenation.Itsmembersworld-classacademic
institutionsdedicatethemselvestothepursuitandattainmentofeducational
excellence.BigTenschoolsstriveforstudentathleticsuccessonthefieldandintheclassroom.
BasedatheadquartersinParkRidge,IL,theconferencemaintainsmorethan60
committees,managesnearly1,000broadcasteventsyearly,provideslegislativeand
complianceservices,operates25differentsportchampionshipsandtournaments,
providessupportservicestomorethan400coachingandadministrativepersonnelon
BigTencampuses,andhandlesmediaandfanservices.Theconferencesponsors
championshipeventsforallitssportsexceptwomensvolleyball.Inmostcases,hosts
aredeterminedthrougharotationamongconferenceschools.
TheBigTenisgovernedbyitsCouncilofPresidentsandChancellors(COP/C),with
supportandadvicefromfacultyrepresentativesandanadministrativecouncil.The
COP/CholdsultimateauthorityandresponsibilityforBigTenConferenceoperations
andpolicy.LegislativeauthorityforconferencerulesisdelegatedtotheFacultyAthletic
Representatives.MatterspertainingtothemanagementoftheConferencesathletic
programsaregovernedbynegotiatedagreements.TheAdministratorsCouncilhas
legislativeauthorityovertheseAgreements.
BigTenMemberInstitutions:
IndianaUniversityHoosiers,Bloomington,IN MichiganStateUniversitySpartans,EastLansing,MI NorthwesternUniversityWildcats,Evanston,IL OhioStateUniversityBuckeyes,Columbus,OH PennsylvaniaStateUniversityNittanyLions,UniversityPark,PA
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PurdueUniversityBoilermakers,WestLafayette,IN UniversityofIllinoisFightingIllini,Champaign-Urbana,IL UniversityofIowaHawkeyes,IowaCity,IA UniversityofMichiganWolverines,AnnArbor,MI
UniversityofMinnesotaGoldenGophers,Minneapolis,MI UniversityofNebraskaCornhuskers,Lincoln,NE UniversityofWisconsinBadgers,Madison,WI UniversityofMarylandTerrapins,CollegePark,MD(asofJuly1,2014) Rutgers,TheStateUniversityofNewJerseyScarletKnights,NewBrunswick,NJ
(asofJuly1,2014)
TheUniversityofMarylandsfullmembershipbenefitswillbegininJuly2014,including
fullvotingrightsandchampionshipeligibility.OnJuly1,2020,UMDwillbecomean
equitypartnerintheBigTenNetwork.
BigTenNetwork(BTN)
LaunchedinAugustof2007,theBigTenNetworkcanreachanestimated80million
householdsthroughagreementswithmorethan300cable,satellite,andtelcoaffiliates
inall50statesandCanada.TheBTNairs24hoursaday,365daysayear.Annuallyit
televisesmorethan350liveevents,andstreamsviatheinternetmorethan400others.
BigTenstudentsproduceandannouncethesestreamedeventsaspartoftheStudentU
initiative.Someofthesewebcastslateraironthetelevisionnetwork,offeringaunique
opportunityforstudentstogainreal-worldtelevisionexperience.Eachcampushastheopportunitytoproduceoriginalprogramminghighlightingqualitiesthatdistinguishthe
university.Additionally,BTN2GoInternationaldigitallydeliversliveandon-demand
programmingtosubscribersoutsidetheU.S.,includingCanadaandselectCaribbean
islands.
CommitteeonInstitutionalCooperation(CIC)
TheCommitteeonInstitutionalCooperationwasestablishedbythepresidentsofthe
BigTenConferencein1958asitsacademiccounterpart.AconsortiumoftheBigTen
memberuniversitiesplustheUniversityofChicago,theCIChashelpedthemadvancetheiracademicmissions,generateuniqueopportunitiesforstudentsandfaculty,and
shareexpertise,campusresources,andinnovativeprograms.Governedandfundedby
theProvostsofthememberuniversities,CICactivitiesarecoordinatedbyastafffromits
Champaign,Illinoisheadquarters.
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CommissionCharge
OperatingwithinthesystemsoftheBigTen,andtakingadvantageofitsmany
opportunities,requiresconsiderableplanningbytheUniversity.TheCommissionwas
createdtoinvestigateandrecommendhowbesttoaccomplishthesegoals.
PresidentLohsspecificchargecallsfortheCommissionto:
PlanstrategicallyandadvisethePresidentonhowwecanmaximizetheadvantagesofmembershipintheBigTenandtheCICtoadvancetheUniversitys
excellenceintheareasof(1)athletics;(2)financeandbusinessadministration;
(3)communications,fundraising,andmarketing;and(4)education,research,and
innovation.
BeguidedbythecommitmentoftheUniversityanditsDepartmentofIntercollegiateAthletics(ICA)tothesuccessofourstudent-athletessothat(a)theyarewellsupportedtosucceedintheirstudiesandcareeraftergraduation,
and(b)theyandeverysponsoredteamhavetheresourcestocompete
successfullyintheBigTenandnationally.
ReviewtheoperationsandfinancesoftheICA,whichisaself-supportingenterprise.Reviewthefinancesofteamseliminatedin2011duetobudget
deficits,andrecommendwhichteams,ifany,shouldbereinstated,andonwhat
timeline.GivenanticipatedrevenuesfromtheBigTen,comeupwithaplanto
ensurethefinancialhealthofMarylandathleticsforatleastthenexttwo
decades.
ArticulatethevaluesandprinciplesthatwillguidetheUniversityinthenexttwodecadesinallocatingsomeoftheBigTenrevenuestosupportUMDsacademic
missionandstudentfinancialaid.
Examinethecurrentfundraisingorganization.RecommendhowtoelevateICAdevelopmenteffortstoprovidebettersupportforUMDsstudent-athletes.
ConsiderhowwecanusetheBigTenNetwork(BTN)totelltheUniversityofMarylandstory,inacademicsandathletics,tothemorethan80million
householdstheBTNreachesintheU.S.andabroad.
ReviewandmakerecommendationsregardingtheopportunitiesprovidedbytheCIC,whichislikeasuperuniversityinitsbroadarrayofofferings.Theseopportunitiesincludeeducation,research,andadministrativeefficiencies.
Performitsworkasconsultativelyaspossible.
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Inresponsetothischargeandtoaccomplishitswork,theCommissioncreatedfour
workgroups:
Athletics FinanceandBusinessAdministration Communications,Fundraising,andMarketing Education,Research,andInnovation(CIC)
Toallowformaximumcommunityparticipationandtobenefitfromtheexpertiseofthe
Marylandcommunity,non-Commissionmemberswereaddedtothegroupsas
appropriate.Acompletelistingoftheworkgroupmembershipisincludedinthe
appendices.
TheCommissionmetsixtimesasawholebetweenJanuary16andJune30,2013.It
heldanopenforumonApril8,2013,toreceiveinputfromtheUniversitycommunity.Approximately250peopleattended.Awebsitewassetuptoreceivecommentsfrom
thecommunity.Workgroupsmetindependentlymorethantwodozentimesduringthis
period.
CommissionRecommendations
Afterreviewingthefourworkgroupreports(includedasappendicestothisreport)and
basedonthebroadinputwehavegathered,theCommissionrecommendsthefollowing
actionstepsandprinciplestoguidetheUniversitythroughitstransitiontotheBigTen.
Takentogether,theserecommendationsreflectthevaluesimplicitinourpresidential
charge:ParticipationintheBigTenConferenceandtheCICrepresentanopportunityto
advancethequalityandreputationoftheUniversityandbetterservestudent-athletes
andtheentirecampuscommunitywhilecreatingsustainablefinancesfortheICA.At
eachstep,wemustactonthesegoalsinafiscallyresponsiblemanner.
TothriveintheBigTenandtheCIC,theCommissionencouragesacampus-wide
commitmenttothefollowinggoals,thegoldstandardthatwehaveimplicitlyembraced
inourrecommendations:
Commitmenttoathleticexcellenceandcompetitiveness; Commitmenttoprovidestudent-athletestheresourcesneededtocompeteat
thehighestlevelonandoffthefield;
CommitmenttoinvestinthefuturefinancialhealthoftheICAattheearliestdatepossiblebybankingresourcesaswellasattendingtoimmediateneeds;
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Commitmenttoleverageathleticsuccessandprominence,aswellasmembershipintheCIC,toadvanceUMDsacademicreputationand
achievements.
Thebasisfortherecommendationscanbefoundintheworkgroupreports.
1. TheMensOutdoorTrackandFieldprogramshouldbefullyrestoredinFY15andgivensufficientresourcestomeetNCAAstandards.
2. Priorityshouldbegiventominimizingmissedclasstimeincreatingteamtravelguidelines.
3. Allstudent-athleteswhoreceivefullboardasacomponentoftheirathleticscholarshipshouldbeprovidedwithmealplansthatoffer21healthymealsper
week.
4. Toprovideforthebroadhealthandacademicneedsofstudent-athletes,staffinglevels,includingacademicsupport,training,nutrition,sportsmedicine,etc.,shouldbeenhancedtobolsterstudentservices.Enhancementsshouldbe
allocatedamongprogramsanddepartmentsinamannerconsistentwithICAs
strategicplan.
5. ThefollowingvaluesandprinciplesshouldbeappliedinallocatingnewrevenuesgeneratedbyBigTenmembership:
Meettheacademicneedsofstudent-athletestoensuretheirachievementandgraduationlevelsarecomparabletothoseofotherBigTeninstitutionsas
wellastonon-athletesatMaryland.
UsenewrevenuesasmatchingfundstospurexternaldonationsforhighimpactinitiativesthatwillenhancethestatureoftheUniversity.Examples
includeneedandmerit-basedscholarships,initiativestopromoteinnovation
andentrepreneurship,andinitiativestoenhanceaccessandstudentsuccess.
6. OnceICAisfinanciallystable,fiftypercent(50%)ofexcessrevenuesshouldbeusedtorepaythedebtitowestotheUniversityfortheloanfromNon-State
AuxiliaryFunds.Theotherfiftypercent(50%)shouldbesetasidetobuildICA
reservesandtomakeadditionalinvestmentsinICA.Annualreviewsshouldbe
conductedofICAfinancialresultscomparingthemwiththeplanforBigTen
integration.
7.StartinginFY15,someICArevenuesshouldbeprovidedtosupporttheacademicenterprise.ThesefundstomeettheUniversitysacademicpriorities
willbephasedinoverthenextnineyearsandareexpectedtoreachatleast
$1Mperyear.
8. Facilitiesneeds,includingpracticefields,anindoorpracticefacility,andaVarsityTeamHouse,shouldbeviewedascapitalexpensesandshouldnotbefinanced
withrevenuesfromtheBigTen.
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9. University-widedevelopmentandalumnirelationsefforts,includingICA,shouldadoptacentrallymanaged,distributedmodelofoperations.University-wide
fundraisingwillbecentrallycoordinatedoutoftheofficeoftheVicePresidentof
UniversityRelations.Further,UMDandICAshouldinvestinaninformation
managementsystemthatprovidessharingofdatabetweentheAdvance/BSR
andPaciolansystems.
10.ICAsfundraisingoperationshouldbeexpandedandtheheadofICAsfundraisinggroupshouldreportdirectlytotheOfficeoftheVicePresidentof
UniversityRelations,withadottedreportinglinetotheDirectorofAthletics.
11.TheVicePresidentofUniversityRelationsshouldworkincollaborationwiththeAthleticDirectortoalignstructurallytheICAfundraisingandfriend-raising
groupsunderthedirectionofUniversityRelationsinordertomaximize
coordination,efficiencyandeffectiveness.
12.Existinguniversity-widevisualidentitystandardsshouldbereaffirmedandenforcedtoprovideaconsistentandprofessionalbrand.Outdatedlogosshouldberemovedfromallathleticfacilitiesandreplacedwithcurrentmarks,priorto
ourBigTendebutinsummer2014.
13.TheUMDlicensingandmerchandisingprogramshouldbeexpandedandrelocatedtotheOfficeofUniversityMarketingandCommunications.
14.ThecategoriesofcorporatesponsorshipsshouldbeexpandedandICAshouldhaveaddedflexibilityinadvertising,consistentwithpracticesintheBigTen.
15.BecauseofthevalueofthemarchingandpepbandsandtheTestudomascotinestablishingteamsupportandspirit,adedicatedandenhancedbudgetin
supportoftheseactivitiesshouldbeestablished.
16.ThecostsandbenefitsofinitiatingticketingforOlympicSportsshouldbealignedwithcommonpracticesatotherBigTenathleticprograms.
17.TheUniversityshouldmaximizewebandbroadcastopportunitiesontheBigTenNetwork(BTN)byproducinghigh-qualityacademic,researchandathletic
programming.
18.TheUniversityanditsfansshoulddoeverythingpossibletohelpfacilitatetheBTNestablishmentofagreementswithlocalandnationalcableandsatellite
televisionproviders.TheseagreementswillensurethatMarylandathleticsis
availabletothemaximumnumberoftelevisionhomes.
19.TheUniversityofMarylandshouldparticipateinCICprojectsandactivitiestothemaximumextentthatresourcesallowbecauseofthebenefitsthis
associationwillaffordourfaculty,staffandstudents.
20.TheUniversityshouldestablishitselfastheCICgatewaytothenationalCapitalregion,whichishometonumerousgovernmentandnon-government
organizations.
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21.TheProvostshouldconsidercreativecollaborationswithCICcolleagues,includingbutnotlimitedtohostingacademicconferences,developingjoint
servicelearningprojects,andcreatingjointresearchprograms.
22.FundingshouldbeprovidedfromcentraluniversityfundstocoverthecostofobligatoryCICcontributions.ThecostofcontributionsforCICoptionalprograms
shouldbepaidbytheunitsbenefittingfromparticipation.
TheCommissionurgesacceptanceoftheserecommendationsbecausewebelievethese
stepswillpromotemechanismsforthesuccessfultransitionoftheUniversityandICAto
theBigTen.Ourstudents,faculty,andstaffwillbenefitinsignificantwaysasoutlinedin
thisreport.
TheCommissionexpressesitssincereappreciationtoAthleticDirectorKevinAnderson,
allthemembersoftheICAstaff,andespeciallytothestudentathletesandcoachesfor
theirthoughtfulcomments,assistance,cooperation,andsupport.
CommissionMembership
Co-Chairs
Mr.BarryP.Gossett
Principal,GossettGroup
Dr.LindaM.Clement
VicePresidentforStudentAffairs
Members
Ms.MarjorieBaker
President,M-Club
Mr.RobertA.Bedingfield
Partner,Ernst&YoungLLP
Mr.DavidColn-Cabrera
President,GraduateStudentGovernment
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Dr.NicholasJ.Hadley
FacultyAthleticRepresentative;Chair,AthleticCouncil
Professor,DepartmentofPhysics
Mr.CliffordM.Kendall
Chairman,VSECorporation
Mr.KerryMcCoy
HeadCoach,Wrestling
Dr.DarryllPines
ProfessorandDean,A.JamesClarkSchoolofEngineering
Mr.ColinPotts
President,TerrapinClub
Mr.MarvinH.Rabovsky
Chair,ExecutiveCommittee,UniversityofMarylandCollegeParkFoundationBoardof
Trustees;President,AlliantCompanies
Dr.MaryAnnRankin
SeniorVicePresidentandProvost
Professor,DepartmentofBiology
Ms.CathyReese HeadCoach,WomensLacrosse
Ms.AnnaRoth
Student-Athlete,CrossCountryandTrack
President,StudentAthleteAdvisoryCouncil
Ms.TimmyF.Ruppersberger
President,UniversityofMarylandAlumniAssociationBoardofGovernors
Mr.HarveyL.Sanders
ImmediatePastChair,UniversityofMarylandCollegeParkFoundationBoardofTrustees
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Dr.MarthaNellSmith
Chair,UniversitySenate
Professor,DepartmentofEnglish
Mr.RobertM.Specter
FormerVicePresidentforAdministration&Finance
Dr.StephenB.Thomas
Professor,SchoolofPublicHealthandDirector,MarylandCenterforHealthEquity
Dr.BonnieThorntonDill
ProfessorandDean,CollegeofArtsandHumanities
Ms.TracyeTurnerVicePresidentandChiefOperatingOfficer
OptimalSolutionsGroup,LLC
Mr.PeterB.Weiler
VicePresidentofUniversityRelations
Ms.SamanthaZwerling
President,StudentGovernmentAssociation
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APPENDIXA:TheAthleticsWorkgroup
Chair:NickHadley,ProfessorofPhysicsandFacultyAthleticRepresentative
Commissionmembers:
MarjorieBaker,President,M-Club CathyReese,HeadCoach,WomensLacrosse HarveySanders,PastChair,UniversityofMarylandCollegeParkFoundation
BoardofTrustees
StephenThomas,ProfessorandDirector,MarylandCenterforHealthEquityAdditionalmembers:
ElaineAnderson,Chair,FamilyScience SarahBauder,AssistantVicePresident,EnrollmentServicesOperations JayGilchrist,Director,CampusRecreationServices BarbaraGill,AssistantVicePresident,UndergraduateAdmissions LandonGreer,ChiefofStaff,StudentGovernmentAssociation EricKasischke,Professor,Geography NanBernsteinRatner,ProfessorandChair,Hearing&SpeechSciences DonnaWiseman,ProfessorandDean,CollegeofEducation LoriEbihara,SeniorAssociateAthleticsDirector/SeniorWomanAdministrator,
ICA
ThefourteenmembersoftheAthleticsWorkgroupbeganmeetinginFebruary2013.
TheworkgroupbeganbyreviewingthechargeandinformationabouttheBigTen,its
memberuniversities,andthesportstheysupport.TheworkgroupthencollectedinformationbymeetingwithICAstaff,teamcoaches,andstudent-athletes.
RyanBowles,AssociateAthleticDirectorforAdministration;ChrisUchacz,Associate
AthleticsDirectorforAcademicSupport&CareerDevelopment;andDarrylConway,
AssistantAthleticsDirectorforSportsMedicinemetwiththeworkgrouptodiscussthe
areasofcompetitiveness,academicsupportandcareerdevelopment,andsports
medicineandstudent-athletewellness.
Theworkgroupalsometindividuallyorhadphoneoremaildiscussionswiththecoaches
ofall20currentteamstolistentotheirthoughtsandconcernsaboutjoiningtheBigTen.
Inaddition,theworkgroupmetwiththemembersoftheStudentAthleteAdvisory
Council,whichiscomposedoftwostudent-athletesfromeachteam,tolistentotheir
thoughtsandconcernsaboutjoiningtheBigTen.
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OnejointmeetingwasheldbetweenthemembersoftheAthleticsWorkgroupandthe
membersoftheFinanceandBusinessAdministrationWorkgrouptodiscusstheissueof
restoringteams.Inordertoassureexcellentcommunicationandcoordinationbetween
thesepanels,theirchairs(BobBedingfield,Finance;NickHadley,Athletics)attendedthe
meetingsofbothworkgroups.
TheAthleticsWorkgroupusedmultiplemethodstocollectquantitativeandqualitative
datatoidentifytheessentialfactorsforallteamstobecompetitiveintheBigTen.In
additiontotheinformationfromcoaches,ICAadministrators,andstudent-athletes,the
workgroupcollectedpublicly-availableinformationonthebudgetsofBigTen
universitiesandthenumberofmenandwomensteamsthattheysponsor.Whilethere
areuniqueissuesassociatedwithspecificsports,therearewidelysharedareasof
concernatUMD.Theseincludebutarenotlimitedto:
ThepotentialnegativeimpactoftheextratimerequiredfortraveltoBigTenschoolsandtheresultingadditionalmissedclasstime. Thelackofcontinuityduetostaffturnover,especiallytheuseoffellowsas
trainers.
Thelackofadequatespaceforbotheffectivetutoringandacademicservices. Thelackofappropriatespaceforsportsmedicinefacilities. Theneedformorepracticefields. Theneedforanindoorpracticefacilitythatcouldserveseveralsports. TheneedforrenovationandupgradestotheVarsityTeamHouse. Theneedforadequatespacetohelpteamscompeteatthehighestlevel,
includingbutnotlimitedto,sufficientlockerspace,meetingroomsandfilm
rooms,andothersportspecificneeds.
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APPENDIXB:BusinessandFinanceWorkgroup
Chair:RobertBedingfield,Partner,Ernst&Young
Commissionmembers:
NickHadley,ProfessorofPhysicsandFacultyAthleticRepresentative CliffordKendall,Chairman,VSECorporation DarryllPines,ProfessorandDean,A.JamesClarkSchoolofEngineering RobertSpecter,FormerVicePresidentforAdministrationandFinance TracyeTurner,VPandCOO,OptimalSolutionsGroup,LLP SamanthaZwerling,President,StudentGovernmentAssociation
Additionalmembers:
FrankAlt,Professor,RobertH.SmithSchoolofBusiness MicheleEastman,AssistantPresidentandChiefofStaff JulieWright,AssistantDean,CollegeofArtsandHumanities KellyMehrtens,DeputyDirectorofAthletics MarvinLewis,AssociateAthleticsDirectorforFinance&Administration
TheworkgroupbeganmeetinginFebruary2013tostudyexistingdataandproject
futurerevenuesandexpenses.Also,wemetjointlywiththeAthleticsWorkgroupand
withmembersoftheStudentAthleteAdvisoryCounciltolearnabouttheneedsof
student-athletesandtheathleticprogramsconsistentwithourchargetorestoreand
maintainbudgetarystability.Throughoutthiswork,thegroupstrivedtoberealistic
andconservativeinitsapproach.
Theguidingprincipleinallouranalyseswas:Tosupportourstudent-athletesinsucha
mannerthattheycanbesuccessfulonthefield,intheclassroom,andinlife.
WecarefullyandsystematicallyexaminedallaspectsofICAsfinances,includingcurrent
andprojectedfuturerevenuestreams,theimpactofservicingICAsdebt(capitaland
operational),andcarefullyreviewedexpenses.Belowarethefindingsandconclusions
oftheBusinessandFinanceWorkgroup.
CurrentState
InitsmostrecentStrategicPlan,ICAarticulatedanunrelentingfocusonitsvisionof
beingthebestintercollegiateathleticsprogramwhileproducinggraduateswhoare
preparedtoserveasleadersinthelocal,state,andglobalcommunities.Thisvisionwill
servetheUniversityofMarylandandallstakeholdersquitewell.Thecurrentfiscalstate
ofICAisassessedbelowasthefirststepintheprocessofprovidingresourcestoachieve
thisvision.
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AconfluenceoffactorsaccountsforthecurrentfiscalstateofICA:
1. Becauseofaseriesofhistoricaleventsanddecisions,ICAhasbeenoperatingatadeficit,andhasnoreserves.Asaresult,ICAborrowedmoneyfromUniversity
Non-StateAuxiliaryFunds.ByJune30,2013,ICAwilloweapproximately$6Mto
theUniversityforthiscumulativeoperatingdeficit.
2. Inadditiontothisdeficit,theACChasbeenwithholdingUMDsconferencesharerevenuesandNCAAstudent-athletesupportfundssincethedecisiontotransition
totheBigTenwasannouncedinNovember2012.Thesefundsrepresenta
significantportionoftheICAsrevenuestream,andthiswithholdinghaswidened
thedeficit.Tocompensate,theUniversity(Non-StateAuxiliary)isloaningICAthe
amountoffundswithheldbytheACC.Thetotaldeficitwillexceed$21Mbythe
endofFY13(June30,2013).Also,iftheACCwithholdsrevenuesforFY14,ICA
wouldneedanadditionalloanfromUniversityNon-StateAuxiliaryfundswhichcouldamounttoanadditional$20M.
3. UMDiscurrentlyinthelowestquartileofspendingperstudent-athletewhencomparedtoourcounterpartsinotherBigTenmemberuniversities.
ExaminingpriorCommissionsprojections
Theworkgroupbeganbystudyingandupdatingfinancialprojectionsfromthe
PresidentsCommissiononIntercollegiateAthletics(2011),whichweredetailedand
substantive.Thispriorcommissionprovidedastrongfoundationfortheworkofthis
group.Still,newimportantvariableshadsurfacedthatrequiredsignificantdollarrevisions.
Thesecenteredonadropinanticipatedmiscellaneousrevenues,footballticketsales,
andfootballguarantees.Forexample,thepriorCommissionincludedrevenue
projectionsforconcertsinComcastbeginninginFY13.However,necessarytechnical
rigging(forlighting,staging,soundsystems,etc.)wasnotinplace,andtheadditional
revenueshavenotmaterialized.Actualfootballticketsalesfellshortofprojections.
Therevenuesandexpendituresassociatedwithfootballguaranteeswererevisedbased
oncurrentschedulingparameters.
ProjectingRevenues
Adetailedreviewofcurrentandpotentialrevenuestreamswasundertaken,including
conferencedistributions,ticketsales,andfundraising.Thesethreestreamsaccountfor
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two-thirdsoftotalICArevenue.Additionally,theworkgroupanalyzedotherrevenue
sources,suchascorporatesponsorships,studentfees,andguarantees.
TofacilitateUMDstransitiontotheBigTen,theconferencedistributionisfront-loaded
andpeggedtoapproximateUMDsprojectedACCrevenuestream.Inyearsevenand
beyond,revenueissettostarttobuild.
Becauserevenueisstaggeredinthisway,theworkgroupusedthestandard,most
appropriatemeansofevaluatingICAfinancialhealthwhataccountantscallthe
accrualmethod.Theideaistoreflectpredictableincomeevenbeforeithasbeen
received.Thiscreatesamoreaccuratefinancialsnapshotunobstructedbythevagaries
ofcashflow.Inthiscase,theaccountingaveragestheincomeevenlyovera12-year
period.
Ticketsalesaredrivenbyfootballandmensbasketball.Thereissome,butnotasignificantamountofopportunitytoincreaseticketsalesinmensbasketball,the
workgroupfound.However,thereisanopportunitytoenhancerevenuethrough
increasedfootballticketsales.Inthecalculations,theworkgroupassumedagradual
increaseinthesaleoffootballtickets.
Toexaminetheopportunityforgrowthinfundraising,thisworkgroupconsultedwith
theCommunications,FundraisingandMarketingpanel.Also,wereliedheavilyonthe
workofthepreviousCommissionregardingfundraisingandmarketinggrowthgoalsand
opportunities
ItshouldbenotedthatMarylandnowfallsinthelowestquartileforrevenuesper
student-athletewhencomparedtoitsBigTenpeers.Inordertosupportourteamsso
theycancompeteatthehighestlevel,theworkgroupbelievesthatstudent-athlete
revenuesneedtobeincreasedtoatleastthemeanvalueoftheotherBigTenschools.
ServicingDebt
ICAsdebtfallsintwocategories.Thefirstisthefixedanddeterminablecapitaldebt
approaching$80MatthecloseofFY13(June30,2013).Thisdebt,theresultofbuilding
ComcastCenter,ByrdStadiumexpansion,andTyserTower,ispaidaccordingtopre-
determinedschedules.Servicingthisdebt,whichamountstoapproximately10%of
totalrevenues,isahighpriorityofICA.
ThesecondtypeofdebtinvolvesmoneyborrowedfromtheUniversity(loanfromNon-
StateAuxiliaryFunds)tocoveroperationalexpenses,approximately$21Mattheclose
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ofFY13.Thisdebtresultedfromhistoricalbudgetdeficiencies,aswellasthegap
createdwhentheACCstoppedpayingMarylanditsshareofconferencerevenuesin
November2012.
Forplanningpurposes,theworkgroupassumedthebudgetgapwouldcontinuetogrow
untiltheICAreachesaprojectedbudgetsurplusinFY18.Asrecommendedbytheprior
PresidentsCommission,ourprojectionsassumedthatassoonastheICAbeginsto
operatewithabalancedbudget,fiftypercent(50%)ofanysurpluswouldbeusedto
servicethedebttotheUniversity.Theotherhalf(50%)wouldbeappliedtobuildICA
reservesandusedtomakeadditionalinvestmentsinICA.
ProjectingExpenses
InestimatingICAexpenses,theworkgroupconsideredcarefullyhowmuchourathletic
programswillhavetospendtocompetesuccessfullyintheBigTen.Thisreviewincludedexpensesrelatedtodebtservice,scholarships,operations,utilitiesand
overhead,student-athletesupportservices,andstaffcompensation/benefits.These
areasaccountforhalfofallprojectedexpenses.Thereisacurrentlackofoperating
fundsforsportsbudgets,requiringtheuseofsport-specificfundraisingtocoverbasic
programneeds(i.e.,apparel,safetyequipment,computersoftware,etc.)
SpendingPriorities
TheyearpriortothetransitiontotheBigTen(FY14)iscritical.Resourcesinthe
followingareaswillbeneededtomaintaincompetitivenessandstability:
AsUMDpreparestoentertheBigTen,ICAshouldpositionitselfforsuccessbyallocatingadditionalsupplies,equipment,andfundstocoverexpensesrelatedto
recruitingefforts.
Allocateadditionalfundstocoveroperatingexpensesthathavereliedonsport-specificfundraisingactivities.Thefreed-upmoneyshouldberedirectedfor
scholarships,supplies,orcapitalneeds.
CompetingintheBigTenwillincreasetheneedforadditionalairtraveltoreplace
somebustrips.Greaterdistances,coupledwithanemphasisonminimizing
missedclasstime,requireICAtoallocateadditionaltravelfunds.
AsdiscussedbythepriorCommissionandtheAthleticsWorkgroup,ICAneedsadditionalstaffinvariousstudent-athletesupportareas.
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Higherthandesiredstaffturnovernegativelyaffectsthestudent-athleteexperience.Werecommendcreationofaretentionpooltoaggregateresources
sotheICAcanbeamorecompetitiveemployer.Ourstudent-athletesdeserve
highqualitystaffmemberswhoaremotivatedtostayoncampus.
ICAhasoperatedwithoutanycontingencyfunds.That,coupledwithitsaccrueddebt,leavestheprogramvulnerable.Accordingly,werecommendadoptinga
soundbusinesspracticeofannuallysettingasidemoneytocoverunexpected
contingencies.
Theworkgroupreviewedfundingathleticscholarships(grant-in-aid)andallowancespermittedunderNCAArules.Wefoundthatnotallstudent-athletes
receivethemaximumallowanceofmeals.Toachieveequityinthisarea,a
budgetaryincreaseofapproximately$1Mannuallywouldberequired.
EvenwhenfactoringtheseincreasesintoICAspending,itisdoubtfulthattheUniversity
willreachthemeanperstudent-athletespendingofourBigTenpeersduringthenext
twelveyears.Weneedtocontinuefocusingonraisingourlevelofinvestmentsothat
ourstudent-athletesandtheICAcancompeteeffectivelyintheBigTen.
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APPENDIXC:TheCommunications,Fundraising,andMarketingWorkgroup
Chair:TimmyRuppersberger,President,UMDAlumniAssociationBoardofGovernors
Commissionmembers:
KerryMcCoy,HeadCoach,Wrestling ColinPotts,President,TerrapinClub AnnaRoth,President,StudentAthleteAdvisoryCouncil PeterWeiler,VicePresidentofUniversityRelations
Additionalmembers:
KarabellePizzigati,PastPresident,TerrapinClub NicolePollard,President-Elect,AlumniAssociationBoardofGovernors GeorgeSolomon,Director,ShirleyPovichCenterforSportsJournalism NatePine,DeputyDirectorofAthletics BrianUllmann,AssistantVPforMarketingandCommunications
TheUniversityofMarylands(UMD)entranceintotheBigTenin2014andthe
CommitteeonInstitutionalCooperation(CIC)inJuly2013provideUMDwithaunique
opportunitytoreview,reevaluate,andrealignitspracticesastheyrelatetoengagement
withalumni,friends,andthegreatercommunity.
WithanoverallgoalofdetermininghowUMDcanbebestpositionedtomaximizethe
experienceofourstudent-athletes,theworkgroupreviewedthefollowing:(1)the
currentfundraisingstructure,particularlyhowtheUniversityworkswithdevelopment
teamsinIntercollegiateAthletics(ICA)andschoolsandcolleges;(2)whereUMDbenchmarksascomparedtootherBigTenmemberschoolsinavarietyofareas,(3)
UMDbranding,marketing,andsponsorshippractices;and(4)trademark,licensing,and
merchandisingpracticesandpolicies.
Throughoutourreview,severalthemesemerged,themostconsistentbeingtheneedto
maximizeresourcesandresultsthroughclosercollaborationamongunits.The
decentralizedmodelcurrentlyinplaceinseveralkeyareasisnotabestpracticemodel.
Oureffortsinfundraising,branding,sponsorships,licensing,andmerchandisingwillbe
betterleveragedwithacoordinatedeffortamongallconstituentgroupsandcentralized
accountability.
AsubsetofourworkgroupmettodiscusstheimpactandfundingoftheUniversitys
marchingbandandmascotcostume.Thesub-panelconcludedthatenhancementsto
bothareessentialfortheUniversitytocompetewithitspeers.Thisincludes
investmentsinnewequipmentandstaff.
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APPENDIXD:Education,Research,andInnovation(CICparticipation)
Chair:MaryAnnRankin,SeniorVicePresidentandProvost
Commissionmembers:
DavidColn-Cabrera,President,GraduateStudentGovernment BonnieThorntonDill,Professor&Dean,CollegeofArtsandHumanities MarvinRabovsky,President,AlliantCompanies MarthaNellSmith,ProfessorandChair,UniversitySenate
Additionalmembers:
CharlesCaramello,AssociateProvostandDean,GraduateSchool SteveFetter,AssociateProvost MarshaGuenzler-Stevens,Director,StampUnionandCampusPrograms MaryHummel,AssistantVicePresidentforStudentAffairs PatrickOShea,VicePresidentforResearch MarySies,AssociateProfessor,AmericanStudies JamesStirling,Director,ProcurementandSupply PatriciaSteele,DeanofLibraries ChristopherUchacz,AssociateAD/Director,AcademicSupport&Career
Development
BrianVoss,VicePresidentandChiefInformationOfficer WilliamWalters,Professor,ChemistryandBiochemistry
TheWorkgrouponEducation,Research,andInnovationmetfourtimesandreviewed
theopportunitiesavailabletotheUniversityasaresultofmembershipinintheCommitteeonInstitutionalCooperation(CIC).
TheacademicaffiliateoftheBigTenConference,theCICincludesallconference
membersandtheUniversityofChicago(whichendedathleticparticipationin1946but
remainsintheacademicconsortium.TheCICadvancestheeducationalandresearch
missionsofitsmemberinstitutionsbysharingexpertiseandcollaboratingoninnovative
programs.TheCICisgovernedbytheprovostsofthememberuniversities,andits
programsarecoordinatedbyastafflocatedinheadquartersonthecampusofthe
UniversityofIllinois.TheCIChasover60committees,programs,projects,andtask
forcesthatareofficiallysanctionedbythemembersandaresupportedbyCICstaff;ithasacomparablenumberofunofficialgroupsandactivitiesthatareorganizedand
supportedonanad-hocbasis.
TheworkgroupbelievesthattheseCICactivitieswilloffersignificantbenefitstothe
University,andthattheywillenhancetheexperiencesofUMDstudents,faculty,and
staff.
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FollowingathoroughassessmentofCICactivitiesoverthecourseofseveralmeetings,
theworkgroupbelievesthatparticipationwillbenefittheUniversitysignificantly,
enhancingexperiencesofUMDsstudents,facultyandstaff.Someexamplesfollow.
TheworkgroupfoundthattheCICisparticularlyactiveintheareasoflibrariesand
informationtechnology(IT),withmorethanadozenactivitiesineacharea.Eachoffers
anopportunitytosharebestpractices,coordinatepolicies,collaborateonspecific
projects,andtakeadvantageofjointlicensingopportunities.CIClibraryinitiativeswill
significantlyexpandstudentandfacultyaccesstoelectronicandprintbooksand
journals.ITinitiativessupportcollaborativeresearchandensurethatlibraryandother
resourcescanbeeasilyandsecurelysharedacrosstheCIC.
TheCICCourseShareprogramallowsstudentstotakespecializedcoursesofferedat
otherCICinstitutionsfromadistance,andtoregisterforthesecoursesatthesametimeandinthesamewayasregularcourses.Currently,mostsharedcoursesareinless-
commonly-taughtforeignlanguages,suchasPashtoandUzbek.
TheTravelingScholarProgramallowsdoctoralstudentstospenduptoafullacademic
yearatanotherCICinstitution,takingspecializedcoursesandusingresearchfacilities
andotherresourcesnotavailableontheirhomecampuses.TheCICalsosponsorsa
numberofactivitiestoadvancegraduatestudyandcareeropportunitiesfor
underrepresentedminorities,includingtheSummerResearchOpportunitiesProgram;a
programtowaivegraduateschoolapplicationfees;andtheCICDoctoralDirectory.
TheCIChasactivitiestoincreasestudentaccesstointernationalexperiences,to
establishglobalresearchpartnerships,andtoincreaseinternationalopportunitiesforfaculty,
enhancingtheirabilitytointegrateaglobalperspectiveintocoursework.
TheCICalsooffersprofessionaldevelopmentopportunitiesforcurrentandfuture
universityleaders.Theyear-longAcademicLeadershipProgramdevelopstheleadership
andmanagerialskillsoffacultywhohavedemonstratedexceptionalabilityandpromise
asadministrativeleaders.TheDepartmentExecutiveOfficerSeminarsbringtogether
about50departmentchairsfromCICuniversitiesforauniquethree-dayleadership
developmentprogram.
TheworkgroupalsoconsideredwhatdistinctivecontributionstheUniversityof
MarylandmightoffertootherCICinstitutions--inwhatareaswemightplaya
leadershiprole,andpossiblenewcollaborativeactivities.Theworkgroupnotedthatthe
UniversityisuniquelypositionedtoserveastheCICgatewaytothenationalcapital
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region,whichishometomanyfederalresearchfacilities,includingtheNational
InstitutesofHealth,theNationalInstituteofStandardsandTechnology,NASAs
GoddardSpaceFlightCenter,NOAAsCenterforWeatherandClimatePrediction,the
NationalArchives,LibraryofCongress,andtheSmithsonianInstitution,aswellas
numerousothergovernment,nongovernment,andinternationalorganizations.
ThecostsassociatedwithCICmembershipincludeobligatorycontributions,
contributionsforparticipationinoptionalprograms,travelcosts,andotherexpenses.
TotalCICcontributionsaveraged$1.5millionperinstitutionin2012-13.Full
participationinCICmeetingsandoptionalprogramswouldinvolvetraveltoChicagoand
otherCICinstitutions,atatotalcostofabout$100,000peryear.Althoughnoadditional
staffwillberequiredtoparticipateinCICprograms,therewillbeotherinitialand
ongoingadditionalcosts,suchason-campusactivitiesforfacultyinCICprofessional
developmentprograms.Weanticipatetotalexpendituresofabout$1.7millionper
year.
Althoughjointlicensingandpurchasingagreementsmayreducecertaincostsoverthe
longterm,theworkgroupdoesnotanticipaterealizinganyimmediatesavingsthatcould
beusedtooffsetthecostsidentifiedabove.Forexample,Librarieshaveexisting
licensesforsomeresourcesandmustwaituntiltheselicensesexpiretogainwhatever
costsavingsmaybepossiblethroughtheCICconsortium.TheUniversitycurrentlyhas
nolicenseformanyoftheresourcesavailablethroughtheCIC;participationwillallow
theUniversitytoacquiretheseresourcesatalowercostthanotherwisewouldbe
possible,butitwillnotrealizeacostsavingscomparedtocurrentexpenditures.
Togiveanotherexample,althoughconnectiontotheCICOmniPoPfiberopticnetwork
mightreducethecostofexchanginglargeamountsofdatawithresearchersatotherCIC
institutions,andtherebyspurcollaboration,establishinglinkagestothehubinChicago
wouldentailsignificantstart-upcosts($250,000and$1millionperyear).Further,UMD
mayhavealreadyrealizedpotentialsavingswhenithookedintoaregionalmid-Atlantic
hub.
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CICadministrativeopportunitiesandbusinesscollaborations
In1998,CICformedaPurchasingConsortiumforcommoditiesandservices.Byjoining
forces,purchasingdirectorsfrommemberuniversitiesareabletonegotiatebetter
termsandgainsignificantpriceadvantagesonproductswithrelativelyhighmargins.To
date,CICinstitutionshavesavednearly$20million.Examplesincludea45percentcost
reductionontheCiscoroutersusedineveryuniversity.InFY2011,savingsaveraged
about$600,000perinstitution,withfourCICinstitutionseachsavingover$1.3million
peryear.ThePurchasingConsortiumrecentlyexpandedintoservicessuchascarrental
servicesandbackgroundchecksforemployees.Althoughweanticipatethatthe
PurchasingConsortiummayproducesignificantsavingsfortheUniversityofMaryland,
anaccurateevaluationoftheopportunitieswillbepossibleonlyaftertheUniversityisa
CICmember.UMDcurrentlytakesadvantageofUniversitySystemofMaryland
purchasingagreementsforsomegoodsandservices;insuchcaseswewillhaveto
considercarefullytheimpactonotherUSMinstitutionsofusingtheCICPurchasingConsortium.