The University of Hawaii Athletic Department has serious competition in 2010. With a schedule boasting some of the nation’s elite programs and a Western Athletic Conference that’s proved it can hang with the Big Boys, fans will have ample reason to rise to their feet this year.

That, of course, is assuming the university can afford the team’s bus fare.

Since 2002, UH’s athletic department has been hemorrhaging money. Suffering from a shaky economy, declining ticket sales and some of the highest operating and travel expenses in the country, UH estimates it will be $10.1 million in debt by the end of this budget year.

University officials have floated the idea of charging all students a $50 athletic fee to stem the losses. That’s a step in the right direction, but that alone won’t help pay back the debt.

The financial skid is no surprise to administrators. The department has had a deficit seven out of the last eight years, losing roughly $1.1 million annually. The exception came in 2008 when former football head coach June Jones orchestrated a 13-0 season and the team was awarded a BCS Sugar Bowl bid. The athletic department made $295,243 that year.

Instead of addressing the shortfalls, administrators chose to dip into university funds to keep athletics afloat.
“The deficit has been attributed to the department’s inability to generate sufficient revenues to cover increasing operating costs,” UH Associate Athletic Director for Administrative Services Carl Clapp told Civil Beat. “Essentially, we have been borrowing money from the university reserves that we need to pay back. It’s as simple as that.”

The University of Hawaii pools all of the money the school receives. The athletic department borrowed from these funds — which could have gone to other academic programs — and is being charged interest on it.
This raises the question of what the role of sports at a university should be. Even taking into account that UH’s athletic department generated 81 percent of its own revenue in 2008 – when other WAC members averaged about 50 percent – some take issue whenever athletic funding trumps academics.
As bad as the situation seems, however, the athletic department is not alone in its financial woes. Not by a long shot.

Across the country, the recession and inflating costs of sports programs have proved overwhelming. Of the 119 schools that play Division 1 football, 95 of the athletic programs were unprofitable in 2008. According to a report published by the National Collegiate Athletic Association, between 2004 and 2008, less than six percent of all Division 1 athletic departments had positive net revenues.

Hoping to break away from statistics like these, UH Athletic Director Jim Donovan has taken steps to lighten his department’s burden, Clapp said. To start, Donovan either terminated or stopped funding 17 of his support staff positions. This, combined with leaving vacant 12.5 percent of the department’s 48 full staff positions, has saved $580,000 annually.

Donovan also cut the administrative and support services budget by $359,750 from fiscal year 2009 to 2010.

Unfortunately, these steps will only scratch the surface of the problem. In order to achieve a completely balanced budget, the athletic department has proposed a more drastic measure.

A $50 athletic fee is being considered for all full and part-time students and would be applied each semester. Donovan estimates that the fee would generate up to $2 million solely for athletics.

But that $2 million would only be enough to cover the department’s operating deficit — it wouldn’t help pay back the $10 million debt.

Currently, UH is the only school in the WAC that doesn’t already mandate a fee. While the prices vary from $2 a credit at Nevada to $124.12 for full-time students each semester at Idaho, the average payment in the WAC comes to $62.29.
If the fee is approved by the Board of Regents, it could take effect in 2011. Despite the possible revenue increase and the cutting of much of the athletic fat, there are still areas in the department that might appear bloated.

For starters, University of Hawaii spends the second highest amount on its coaches in the WAC. Salaries and benefits came out to $5,647,822 in 2008. At Boise State, arguably the conference’s preeminent program, coaches earned less, $5,369,233. While the difference isn’t massive, comparing the two team’s accomplishments is telling. In football, UH has shared two WAC titles in its history as well as an outright championship in 2007. Boise State’s program, on the other hand, has earned seven WAC titles and has had two BCS Bowl wins.

You do the math.

The truth is that there is nothing straightforward about the UH athletic deficit. The department does not want to be borrowing money from university funds any more than taxpayers want it to. Times are exceptionally difficult and the program deserves kudos for an above-average job maintaining most of its own expenses.

But, foe or friend to the cause of athletic subsidies at universities, the unrelenting fact is that UH has $10 million to account for. For Jim Donovan, who became the school’s 20th athletic director in March 2008, that’s 10 million reminders that he has a very hefty task in front of him.