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The Case of Budget Cuts in the University

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Abstract

This paper explores a case involving an athletic director of a division I university who finds out that the school will have to undergo a budget reduction for the entire university. The athletic director was notified that $2.5 million dollars will be cut from their $25 million dollar budget in order to fit with the mandate. This athletic director is faced with questions from the media as well as from coaches and students about the circumstances concerning the budget cuts. Many of the people are wondering what programs or who will be cut from the athletic program. The main concern of the athletic director at this point in time is the media and the communication between the coaches and the administrators. This paper will also explore how to deal with the media as well as the people involved, information that will aid in the choice of the athletic director’s decision as well as the process, types of communication that will be partaken, the potential solutions and ramifications, and the criteria based on a final decision. An analysis will be provided that will also include personal commentary as well as a reflection.

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Introduction

Rebecca Jones, who is the athletic director at a division I FCS institution, has a $25 million dollar budget for its athletic program as well as overseeing 25 sports, which is well beyond the minimum requirement of 14 sports for NCAA division I membership. Along with her, she has 15 assistant and associate athletic directors. Jones had been notified by a university official that a budget reduction was to ensue across the entirety of the university by 10 percent. $2.5 million dollars would have to be cut from the athletic program in order to satisfy the new budget reduction.

There are areas of concern with regarding the athletic program’s budget cut and the decision to cut certain programs rather than others. The programs in question are Men’s soccer, Men’s swimming, Women’s volleyball, and the FCS football team. With such a huge decision to make, the athletic director was only given two weeks to come to a decision. As the athletic director of this university, it is Jones’ responsibility to carefully evaluate potential options that will keep everyone satisfied as well as possibly enhance the athletic program as a whole.

Background Information

On Saturday, while a lacrosse game was in the midst of transpiring, the chancellor approached Jones to inform her of an emergency meeting that had occurred the other day. This meeting involved a conversation about the university’s budget and that it was to undergo a 10 percent reduction starting effectively July 1st. The athletic program was going to take a 10 percent hit to its budget as well. Word spread like a wildfire and Jones found three coaches in her office the next day concerning the budget cut as they feared that their programs and jobs were in jeopardy.

The men’s soccer coach as well as the men’s swimming and women’s volleyball coach addressed their concerns and problems about their programs and if the athletic director was thinking about cutting them or not. The men’s soccer coach stated that soccer was a low profile sport for the university, therefore the program was expendable with ease compared to the others. Although men’s swimming was a successful program, the coach had stated that there were necessary upgrades that needed to be done for the facility, therefore the program would be cut since they could not afford the big money project. Women’s volleyball was a high cost and was fully funded, but the coach had mentioned it lacked fan support due to its unpopularity within the region and would probably be cut.

While in this meeting with the coaches, she was interrupted and informed that the media had caught wind of the debacle. Local newspapers as well as local television stations were interviewing coaches as they walked by outside of the basketball arena. One of the questions that one of the reporters had asked was, “Should the FCS football program, which has been running a deficit of $1.3 million and $2.2 million per year over the past couple of years be dropped completely or go nonscholarship?” (Masteralexis, Barr, & Hums, 2015). Two of the athletic director’s concerns were of an immediate nature regarding with the media and the other was of a communication nature whereas dealing with the coaches as well as the administrators that were within the department. Jones was asked to submit a preliminary report within two weeks by the chancellor, which would buy her some time in order to make such a big decision.

Methodology

If I were in Rebecca’s position, the first thing I would do is initiate a crisis management plan. My first obligation would be to regain control over the situation as well as bring unity within the athletic program and focus everyone’s mindset on the particular situation that is at hand. In regards of the coaches and the others in the athletic department, the next thing to do is figure out the severity of the problem and brainstorm ways that could aid in overcoming the dilemma.

In order to solve the problem, it is best to seek the vulnerabilities within the department as they may become possible issues in the future. The formulation of a plan should be developed and then passed onto the senior staff members to take the plan into their department and discuss while explaining the content and details of the plan. I would address the media with factual information concerning the situation as it is and will inform them later about the final decision and the direction that I will take the athletic program into as well as ensuring the prosperity of the athletic program.

The type of information that needs to be collected to make a decision involves data such as a budget analysis within the past seven to ten years from every department, which will include its expenses, profit, and any debt that has accumulated. This information will be very valuable in determining which sports are worth keeping and if the reports show exponential growth within a particular program. A chart will also be created of the current budget distribution within each department. This will determine which programs are getting too little or too much funding. It would also be wise to collect data from at least five to ten different universities that are at the FCS level that complies by the same budget. Another important piece of data is the history of success of each sport during its season within the past 10 seasons and its history of fan attendance. Within each sport, a list of all the current employees as well as their resumes should be taken into consideration also. The evaluation of such current or future projects such as renovations and updates of facilities will also help in determining where to cut the budget.

When it comes to the decision making process, it is often advised to be unbiased, logical, and not based on emotions. It is also wise to consult with others and receive others’ opinions as it can help you in your decision making process. The people that I would involve would be all of the other assistant and associate directors. This would include the executive associate athletics director as well as the associate athletics director, the assistant athletics director, and the director of compliance. If needed, I would also involve the president of the institution if applicable. With this selection of people, together we could discuss the possible solutions as well as the possible outcomes of each solution. The involvement of the director of compliance will ensure that there is no violation of any of the rules during this process. This would ultimately allow me to come to a final decision.

The type of communication that needs to take place is face to face in the form of formal meetings. This issue will be communicated to all faculty members and others within the athletic department. Such issues will be discussed in meetings that will involve everyone coming to a consensus about where in the athletic department the budget reduction will take place as well as any questions or answers that will help further the decision making process. The information that has been collected will also be discussed in these formal meetings. The data will be presented and if these findings show any outlying numbers, they will be addressed. It’ll determine whether or not if excessive spending had taken place or where money shouldn’t have been spent had occurred, which includes luxury items or unnecessary purchases that weren’t essential.

The obvious solutions in terms of the budget reduction could be the cutting of jobs or programs that have a low performance or profit. Other solutions may include increasing the ticket prices of each sport or cutting the travel expenses of each sport. The number of scholarships could also be cut from each sport. Potential ramifications for these solutions may be the loss of coaching jobs, students not being able to participate in their sport, which may negatively affect the attendance of the university as well. Other ramifications is that if ticket prices rise, the attendance may decline and if scholarships are cut from each sport, it limits the prospective talent the team is able to attract due to lack of scholarship money.

In regards to cutting a sport program, the criteria I would use in order to determine which one to eliminate is its operating budget, the revenue that the team generates each season, the expenses and cost to keep it, the success of the program, and the attendance of fans. Another factor to consider is Title IX. According to the NCAA website, “Title IX of the Education Amendments Act of 1972 is a federal law that states: No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance” (“Title IX Frequently Asked Questions”, 2014). The lack of funding should not be an excuse to not comply with title IX.

With the information provided solely based on what the coaches and the media had mentioned to Rebecca rather than factual data gathered, Hypothetically speaking I would incorporate budget cuts within all the athletic programs mentioned in the case study. Starting with men’s soccer, I would possibly take a budget cut from their travel expenses to compensate for it being a low profile sport. With men’s swimming although successful, I would put their facility upgrades into a hiatus until further notice of additional funds that may be acquired from other cuts in the budget. For women’s volleyball, since it is fully funded, I would cut down to it being 70 to 75 percent funded possibly as well as cut down on the scholarships. With the FCS football team, I would most likely keep it, but make it a non scholarship sport to compensate for the deficit that the program is accumulating in hopes that the program could make a turn around and began to generate a profit. If the program continues to cost more to keep, it will inevitably be cut. Other low performing sports programs that don’t turn over a profit may be cut as well.

In conclusion, I believe that this is a hard decision to make when considering the possibilities of risks and rewards when implementing a budget reduction. I commend Rebecca as this is the utmost stressful situation to be in. Between keeping people happy and satisfied as well as making the best decisions for the university’s athletic program, you cannot forget that this is a business. You have to make logical and reasonable decisions regarding the direction you want to take an athletic program into. With this being said, the decision is ultimately up to Jones and as the athletic director, it is her responsibility to carefully evaluate the potential options that will satisfy everyone and possibly enhance the athletic program as a whole.

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