Washington State University Athletic Department Financial Problems

Earlier this year an internal audit found mismanagement in the distribution of football tickets in the Washington State University athletic department.  Specifically, more tickets were provided to IMG (Sports Marketing Partner) than were contracted (Washington State IMG contract) and some athletic department employees received discounted tickets, which may be in violation of state laws.  At the same time, the athletic department at WSU is running a $67 million budget deficit, and projected to reach nearly $85 million over the next couple of years.  "WSU projects a cumulative deficit of $74.8 million at the end of FY2019, $80.1 million in FY2020, $83.1 million in FY2021 and $85.1 million in FY2022 before finally breaking even, and reaching a single-year surplus, in FY2023".  So the goal is to turn the budget deficit to either being balanced or in surplus by 2023.

In an effort to close the gap, the athletic departments plan is "contingent on media-rights fees, record donations to the Cougar Athletic Fund, improved ticket sales, corporate sponsorships and a spike in student fees".  Currently student fees account for $1.6 million in athletic department revenue, and the increase (subject to student voting it's approval).  Last month the WSU regents approved the athletic department plan to reduce the athletic department deficit.

In an effort to see how the athletic department at Washington State arrived at such a large budget deficit, I draw on two sources of athletic department financial data:  the first is athletic department data reported to the NCAA Membership Financial Reporting System.  This data comes from two places, The Chronicle of Higher Education (FY2010-2014) and Washington State University website (FY2013-2017).  This data reports more detailed athletic department data, including athletic department debt service and debt balance, which I will report below as well.  The second athletic department data source is the Equity in Athletics data that athletic departments provide to the US government.  The EADA data provides both total revenue and total expenses by program and for the university athletic department.  I will just report the athletic department total revenue and total expenses in columns two and three below using the EADA data.  I calculated the profit/loss and cumulative losses using the EADA data starting with the 2006 fiscal year.  Finally, I use the NCAA MFRS data to report the athletic department debt service and debt balance in columns six and seven.

FY	Total Revenue	Total Cost	Profit/Loss	Cumulative Losses		Debt Service		Debt Balance
2006	$2,012,672	$7,579,472	-$5,566,800	-$5,566,800
2007	$2,167,260	$7,805,984	-$5,638,724	-$11,205,524
2008	$3,881,169	$8,341,941	-$4,460,772	-$15,666,296
2009	$5,068,118	$8,528,930	-$3,460,812	-$19,127,108		$2,075,044		$22,570,000
2010	$4,829,643	$9,408,665	-$4,579,022	-$23,706,130		$1,588,344		$21,950,000
2011	$5,811,864	$9,723,756	-$3,911,892	-$27,618,022		$1,588,044		$21,305,000
2012	$6,632,081	$10,542,840	-$3,910,759	-$31,528,781		$1,586,744		$136,110,000
2013	$6,417,812	$12,073,525	-$5,655,713	-$37,184,494		$8,481,471		$147,247,582
2014	$7,170,045	$14,042,909	-$6,872,864	-$44,057,358		$9,400,862		$143,262,393
2015	$8,083,509	$14,779,057	-$6,695,548	-$50,752,906		$9,382,269		$140,047,315
2016	$8,958,684	$14,606,887	-$5,648,203	-$56,401,109		$9,250,560		$135,566,832

First, note I only begin with the 2006 fiscal year and do not have access to the most recent fiscal year's data.  As you can see, the athletic department at Washington State has been running consistent losses since at least 2006.  While the debt service and debt balance were manageable up until 2011, the sizable increase in debt and the payments on that debt are resulting in the current athletic department financial situation.