Consultants find stadium renovation debt weighs-down MSU athletic budget

11/06/2001 BOZEMAN--A team of national consultants has issued a report finding that Montana State University's athletic debt service resulting from its stadium renovation is twice the national average and creates a substantial burden on MSU's athletics operating budget.

The finding was in a 47-page report issued to MSU administrators last week by Carr Sports Associates of Gainesville, Fla. Two consultants, both former athletic directors, visited MSU in August at the request of MSU President Geoff Gamble. Gamble said the visit was prompted by the Athletic Department's $1 million shortfall for Fiscal Year 2001.

"This year's shortfall in the athletic budget is a high priority concern. It is an institutional problem and requires an institutional response." Gamble said. "We plan to aggressively address the fiscal issues in the athletic operations and this report will be an important resource in our efforts. We appreciate the thoroughness of the Carr review."

Carr found that while there are a lot of positives about MSU's Athletic operations, its financial burden is unwieldy and does not appear to be the result of a limited budget.

"Many of the fiscal challenges that currently face MSU Athletics involve the debt associated with a series of much-needed facility improvements substantially completed in 1998," the consultants said. The bond that funded Phase II of the Stadium Project required the Athletics operating budget to absorb "substantial debt service levels." The report noted that MSU's debt service, 6 percent of athletic expenses, is unusually high. It can be compared to 1.6 percent in the Big Sky Conference and 2.7 percent nationally.

"Very few athletic programs would be able to support an annual debt requirement of such magnitude without the identification of a substantial donor base or donor commitment," the report found.

Indeed, the consultants said only "a handful" of athletic programs around the country are self-sufficient and that MSU, like the rest, must rely on institutional funds to support the athletic department budget.

On the revenue side of ledger, the investigation also found that revenue from MSU student athletic fees, some $583,500, is lower by half than the average at other I-AA and Big Sky schools, which also contributes to the budget shortfall.

Craig Roloff, MSU's Acting Vice President of Finance said this is also an item that needs to be examined, and students would be included in the discussion of the student fee issue.

The report found that MSU was doing some positive things in the area of athletics.

"One of the bright spots from the report is the evidence that we do much better than most similar institutions in generating gate receipts and support from corporate sponsors, even though we are, in many cases, in a smaller market," Roloff noted.

Also in line with or better than similar programs are budget allocation and staffing levels, according to Carr.

Allen Yarnell, Vice President of Student Affairs, to whom the athletic director reports, said the report offered many positive suggestions that will assist future athletic administration. Among them, implementation of zero-based budgeting, developing a financial plan based on historic data and realistic future projections, and instituting specific planning tools.

Yarnell said the report will be presented by administration to several campus governance councils in the next few weeks. Members of the administration will study the plan and frame their own suggestions for both short-term and long-term solutions to solve the problem. They are scheduled to present those plans to the University Planning, Budget and Analysis Committee at its Nov. 29 meeting.

"Our plan is to take the findings of this report and determine how to best meet the obligations of our continuing debt service without crippling the operational budget year after year," said Glenn Lewis, interim athletic director.

"We will develop a balanced approach to solving this problem that incorporates the university's priorities, history and tradition," Gamble added.

To see the entire Carr report on-line, go to: http://www.montana.edu/misc/carrreport.pdf.

Send questions or comments to Carol Schmidt: cschmidt@montana.edu. Or you can send letters to Carol Schmidt, MSU Communications Services, 416 Culbertson Hall, Bozeman, MT 59717.

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