With slightly more than a month remaining in the 2001 fiscal year, which effectively ends July 1, the University athletic department expects to have surpassed revenue expectations.
Administrators believe the income from donations and royalties of University-licensed merchandise were the two key contributors to the increase in revenue, both of which will be larger than previously projected. The decreased deficit will mean the department will have to pull less money from its reserve fund to make up the difference.
“Being on budget doesn”t affect spending habits, but affects how much we have to pull from our reserves,” said Jason Winters, executive associate athletic director and chief financial officer.
After the 1997 football team”s championship season, revenue from royalties dropped considerably, plummeting from $5.3 million in 1998 to $3.4 million for 1999. Revenue continued to fall to $2.8 million for 2000 and the athletic department was expecting a decrease to $2 million for this year.
“Over the past two years we have experienced about a 30 percent decline,” Winters said. “We had budgeted another 30 percent decline this year from last. The good news is royalties aren”t going down any further.”
But this year, officials are projecting licensing revenues to be closer to the $2.8 million that they were in 2000, if not more. Winters points to the “volatile” nature of the merchandise industry to explain the decrease in licensing revenue over the past several years, as indicated by the bankruptcies of Starter and Pro Player, two major manufactures.
“The industry as a whole had declined,” Winters said. “We had got hit worse than others. It appears the worst is over.”
Officials also project monetary gift donations to increase 10 percent from last year, a category in which the athletic department was not expecting any increase.
Winters cites efforts to broaden the circulation of donations and increased donations from the Victors Club as the principle reasons for the donation increase.
Despite both these increases, the athletic department is still projecting a $3.3 million deficit with $43 million in revenue and $46.3 million in costs.
To make up for deficit, the athletic department will pull from a three million dollar “discretionary transfer” from the president”s unrestrictive gift account while the rest will come from department reserves which have been accumulated from previous surpluses, Winters said.