A year after showing a $12.9-million deficit in its athletic budget as it transitioned from the Big East to the Big 12, WVU now is claiming an unexpected $4.7-million profit for the fiscal year ending June 30.
The profit comes unexpectedly.
In fact, last year, after announcing the unprecedented nearly $13-million loss, due mostly to at $20-million payout to the Big East in order to change leagues, athletic director Oliver Luck made this statement:
“We knew going into the Big 12 that the first couple or three years would be a financial hardship. And so far it has been,’’ Luck said. “But you have to look at it mid-term to long-term. Last year was difficult. This year and the upcoming year are still going to be tough.
“But when you crunch the numbers you have to recognize that those tough years will disappear.’’
It just wasn’t supposed to happen this year. In fact, Luck talked during the year of breaking even or turning maybe a $50,000 profit as the best result possible.
Instead, income ($77,706,696) exceeded expenses ($73,501.593) by $4,205,104.
“Now that our budget numbers are in, I want to say how very pleased and proud I am of our entire athletic department,” Luck said in a release from the school. “And, I cannot say enough about the job turned in by our Mountaineer Athletic Club staff to reach record-breaking fundraising numbers for the second straight year. I also want to thank the MAC members, who rallied around us, and the many fans who purchased tickets to various athletic events. We all know how important it is to have a self-supporting athletic department, and that goal has been reached once again.”
So, what happened? How was a healthy profit attained.
It came mainly through fundraising.
The largest source of revenue came from Mountaineer Athletic Club contributions, which reached a record of $23,916,171. That is approximately $4 million more than had been anticipated in preparing the past year’s budget.
Another area that produced more than expected was in revenue from the Big 12, which turned out to be $10,354,499. WVU’s payment from the Big 12 for television revenues was 50 percent of a full share in its first season in the conference.
This year it jumps to 67 percent as part of the deal to pay back money given the school by the Big 12 to help with the exit fee from the Big East. It becomes a full share in the fourth year in the conference (2015-16).
The second-largest revenue provider was ticket sales for all sports – mainly football and basketball — which at $21,411,615 was down about $100,000 from the previous season, not a good sign considering the direction both the football team and men’s basketball team seem to be taking.
“Oliver asked all of us to trim our budgets, but do so in a way that would not affect our competitiveness athletically or hinder our student-athletes in the classroom,” said Michael Szul, WVU Associate athletic director for business operations. “The athletic staff worked with the business office to tighten budgets, and along with our MAC donors’ generosity, we were able to reach our goal of turning an excess.”
The largest operating expense for the department came from compensation ($26,397,507). This line item includes compensation for all coaches, administrators and staff, as well as severance pay. It also includes the accrual for Other Post-Employment Benefits liability as required by the Governmental Accounting Standards Board Statement 45 and the accrual for vacation and compensatory time. While both items are non-cash expenditures, they must be added to compensation operating expenses to be in accordance with generally accepted accounting principles.
It represents a full 36 percent of the entire expenses incurred by the athletic department, three times the $8.7 million given out in student aid to the 358 athletes.
Considering the push that is now being played out in college sports to see that athletes are compensated beyond what they are earning now, one can see that it possibly could mean cutbacks in other areas to allow profits to continue to be made if that passes.
Facilities maintenance and repair ($10,669,275) were 15 percent of the operating costs, but this category also includes a non-cash expense of $5,259,824 for depreciation, which must be included to be in accordance with GAAP.
“The financial statements are prepared in the same categories that are used for the Equity in Athletics Data Analysis (EADA) report that is required by the NCAA each year,” said athletic business administrator Dia Fortney. “We employ Clifton, Larson, Allen, LLP (CLA) to complete our annual NCAA Agreed Upon Procedures. CLA reviews our financial processes each year to ensure reliability, accuracy and effective overall financial performance by the department.”
Follow Bob Hertzel on Twitter @bhertzel.
- Bob Herzel
HERTZEL COLUMN: Big 12 provides plenty of optimism
This past week the Big 12 held its annual media gathering in Dallas and served up a heaping portion of optimism for the 2014 season that is now upon us, West Virginia University opening its preseason practices on Thursday.
This is a time of year when no one has lost a game, not even Charlie Weis at Kansas, and it’s a time of year when opinions are more plentiful than tattoos in an NFL locker room.
HERTZEL COLUMN: WVU needs White to follow in former receivers’ footsteps
A year ago Clint Trickett took a lot of grief as the once potent West Virginia offense came unraveled, but there is more that than meets the eye.
The criticism was not unfounded, of course, although behind each incomplete pass there was the pain Trickett was suffering through to throw it, his rotator cuff in need of surgery.
HERTZEL COLUMN: O’Toole joins long list of eccentric WVU kickers, punters
The star of the Big 12’s annual football media day wasn’t a star at all.
He intrigued the media far more than Bob Stoops, the coach of preseason favorite Oklahoma, and more than Baylor quarterback Bryce Petty, the preseason player of the year.
WVU, N.C. State to meet in football
Following a trend of creating non-conference games against regional opponents, West Virginia University has reached agreement with North Carolina State to play a home-and-home football series in 2018 and 2019.
The Mountaineers are scheduled to play N.C. State in Raleigh on Sept. 15, 2018, and then play host to the Wolfpack on Sept. 14, 2019.
HERTZEL COLUMN: ‘Cheating pays’ remark should draw attention
When Bob Bowlsby, the outspoken commissioner of the Big 12, presented his opening-day picture of the future of college sports in Dallas for the annual media day gathering, his bleak comments were not unexpected.
Holgorsen’s program hits turning point
You can almost sense, as you watch West Virginia University football coach Dana Holgorsen sit before the gathered Big 12 media contingent answering questions in the Omni Hotel in Arlington, Texas, that he senses his program has reached a turning point.
Trickett’s play key factor for Mountaineers’ success
In the end, it comes down to the quarterback.
Always has with Dana Holgorsen, always will.
Quarterback is the offense with the West Virginia University coach. When he does well, the team wins – almost always.
When he does poorly, the team doesn’t stand much of a chance.
Saban, family happy at Alabama
Alabama football coach Nick Saban, whose team opens the season against West Virginia in Atlanta on Aug. 30, denied receiving or turning down this offseason an offer of $100 million to coach Texas, indicating he planned to finish his career as coach of the Crimson Tide.
HERTZEL COLUMN: ‘Quarterback child prodigy’ comes to WVU amidst very high expectations
Has West Virginia football coach Dana Holgorsen finally put the arrow he needs in his quiver with the commitment received Wednesday from high school quarterback David Sills, who is a rather extraordinary story and may also just be a rather extraordinary quarterback?
WVU kicker Molinari ‘All-American boy’
West Virginia kicker Mike Molinari may not be an All-American but he is an All-American boy.
He was honored for that on Wednesday when the Allstate Insurance Company and the American Football Coaches Association announced the West Virginia redshirt senior kicker/punter Michael Molinari is a nominee for the Allstate AFCA Good Works Team.
- More Bob Herzel Headlines
- HERTZEL COLUMN: Big 12 provides plenty of optimism