The Times West Virginian

October 17, 2013

WVU on solid financial footing after turning profit for past fiscal year


Times West Virginian

— Some welcome — and surprising — news came from the West Virginia University Athletic Department last week.

WVU, one year after showing a $12.9-million deficit in its athletic budget as it transitioned from the Big East to the Big 12, claimed an unexpected $4.2-million profit for the fiscal year ending June 30.

“Now that our budget numbers are in, I want to say how very pleased and proud I am of our entire athletic department,” WVU athletic director Oliver Luck said.

“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.”

Indeed, staying on sound financial footing has been a priority at WVU since Fred Schaus returned to WVU as athletic director in 1981 following significant budgetary problems in the department. Ed Pastilong followed the same philosophy following Schaus’ retirement.

 Early in Luck’s tenure, though, WVU had to escape the crumbling Big East if it was going to remain a member of an elite conference, and the Mountaineers began competing in the Big 12 in 2012.

That move, in addition to changing rivalries and making travel more difficult for teams and fans, was expensive — including a buyout to leave the Big East.

“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 earlier this year. “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.’’

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.

Fundraising was critical. Mountaineer Athletic Club contributions 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 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.

The good news is that number will continue to grow. This year it jumps to 67 percent, and It becomes a full share in WVU’s fourth year in the conference (2015-16).

The second-largest revenue provider was ticket sales for all sports – mainly football and men’s basketball — which at $21,411,615 was down about $100,000 from the previous season. Success in football and men’s basketball, obviously, is the major factor here, and it’s also critical in fundraising.

The largest operating expenses for the department came from compensation ($26,397,507), facilities maintenance and repair ($10,669,275), and student aid ($8,737,980). The push to further assist student-athletes could significantly impact the latter number in the future.

As in any business, decision-making must be solid — spending as necessary but doing so wisely.

“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 past decade has shown just how fluid and unpredictable college athletics can be. With WVU showing a profit for its first year in the Big 12, though, it’s well-positioned for the future.