Athletic Costs Weigh on Universities
By Shelby Oppel Wood, the Oregonian

BEAVERTON -- The Oregon State University athletic department has pulled out of the red after 12 years operating at a deficit, President Ed Ray reported to the State Board of Higher Education on Friday.
 
In the past year, Oregon State erased a $5.8 million deficit largely by tying the debt to its “Raising Reser” campaign to expand the football stadium, Ray said. Donations first were used to balance the books before they were applied to the expansion.
 
Yet, the athletic departments at Oregon State and Portland State continue to receive millions of dollars each year from the universities, money that otherwise could go to academic departments. Oregon State athletics received $3.9 million from the university for the 2003-04 fiscal year, about 14 percent of the department's $27 million budget.
 
Portland State's athletic department, which saw its football team post a 4-7 record last season, had an operating loss of $3.4 million in fiscal 2003-04, a figure officials blamed in part on poor ticket sales and fewer donations. The university subsidized nearly the entire loss to keep athletics in the black.
 
At the University of Oregon, athletics received no such subsidy, with the exception that UO discounted tuition for nonresident student athletes below what other nonresident students must pay.
 
Higher education board members commended Oregon State for eliminating its debt. But they raised questions about how much universities should spend to keep athletics healthy in a time of frozen faculty salaries and rising tuition.
 
Historically, the board has expected athletic departments at the state’s three largest universities to support themselves, which requires football and men's basketball to generate enough revenue to pay for themselves and non-revenue sports.
 
At Portland State, 115 student athletes compete in football and men's basketball, sports that are supposed to pay for their programs and cover 195 student athletes in other sports. And unlike UO and Oregon State, Portland State's football and basketball teams receive little revenue from national and regional television and radio contracts.
 
Don Blair, a board member who is Nike’s chief financial officer, asked campus administrators if they plan to wean athletics from university support soon or if the departments will continue to require annual cash infusions.
 
“The UO athletic department became self-supporting about three years ago,” provost John Moseley said. “The cost of discounting tuition for nonresident student athletes probably will be covered by private donations next year,” he said.
 
Oregon State’s athletic department plans to cut its annual subsidy to $2 million “in the short term,” Ray said, and to shrink it further over time.
 
Portland State, however, can’t cut off the subsidies until the football team starts to bring in more money.
“I’m not going to say that’s in the next few years,” said Cathy Dyck, PSU’s interim vice president for finance and administration.
 
Portland State's athletics budget suffered when staffers hired to attract sponsorships left for National Guard duty and because the school received less state lottery money than expected in the last fiscal year. But the main culprit was football, which took in nearly $111,000 below projections in ticket sales and $178,000 less in donations.
 
Tom Burman, Portland State’s athletic director, said the department will earn about $350,000 in guarantees from football games against OSU and Boise State next season. But such strategies are secondary to the department's focus on improving the team itself.
 
“First thing we’ve got to do,” he said, “is we’ve got to turn our program around.”


Shelby Oppel Wood: 503-221-5368; shelbyoppel@news.oregonian.com.