Chancellor’s new advisory group aims to help set Cal Athletics on path to financial sustainability

Chancellor Robert Birgeneau has established a special committee to review the financial model for Intercollegiate Athletics (IA), bringing together a select group of eight leading members of the faculty and alumni community to analyze the department’s current budgetary challenges and propose possible solutions that could be supported by their respective constituencies.

The Chancellor’s Advisory Council on Intercollegiate Athletics Financial Sustainability has been asked to:

• develop an understanding of the recent and current financial and competitive state of the Intercollegiate Athletics program;
• assess alternative approaches to promptly putting the IA program on a financially sustainable course;
• assess possible impacts of changes in the scope of the department on philanthropy to academic programs;
• develop a short list of promising alternatives, including the pros and cons of each.

While the University Athletics Board and the Academic Senate’s “Task Force on Intercollegiate Athletics” are exploring similar issues, the chancellor identified an opportunity to generate fresh perspectives through focused interaction between two of the campus’s most important constituencies.

“It is my view that today we must get our IA programs back on the path to financial sustainability,” Birgeneau wrote in his charge letter to the committee. “For some months, the administration and IA have been exploring a variety of options to ensure we have a department whose size and scope is sustainable. While IA is exploring every possible avenue to reduce costs and increase revenues, it has become apparent that the campus will greatly benefit from well-informed advice and recommendations from important constituencies not directly connected with the department or the administration.” (See below for the full text of the council’s charge letter.)

The members of the council are professors Calvin Moore (mathematics), Fiona Doyle (materials science and engineering), Christopher Kutz (law), and Margaret Conkey (anthropology); and alumni William Ausfahl, Kathleen Correia, Robert Haas, and Robert O’Donnell. The advisory body will begin work immediately in order to deliver a set of recommendations to the chancellor in June.

Birgeneau noted that this complicated endeavor must take into account more than just financial considerations, although the council should be prepared to evaluate all options, and a serious effort must be made to understand the risks and benefits to any changes in Intercollegiate Athletics’ program scope.

“While a final decision is ultimately my responsibility, there are no foregone conclusions. I truly desire input from this dedicated group, and the many people who have the campus’s best interests at heart,” Birgeneau wrote.

“There should be no doubt that we fully intend to provide IA with continued financial support as long as it is required to ensure that we remain true to our tradition of comprehensive excellence. At the same time, we must all be assured that the scope of the overall program and the level of required institutional support are sustainable going forward.”

“Intercollegiate Athletics has a unique relationship with the campus’ internal and external constituencies, and this group of eight highly respected members of the Cal community brings great credibility to the task at hand,” Director of Athletics Sandy Barbour said. “We have spent considerable time working with the administration generating alternatives to our financial situation, and I am certain this committee will offer further alternatives and provide valuable input to this important issue.”

The following is the charge letter from Chancellor Birgeneau for the Chancellor’s Advisory Council on Intercollegiate Athletics Financial Sustainability:

Intercollegiate Athletics (IA) has been and remains an integral part of UC Berkeley’s culture and traditions. It engages our community, including especially our undergraduate students, celebrates excellence, and showcases our student-athletes. While the campus and our students have a decades-long history of providing meaningful financial support for IA, for some time the substantial majority of funding for IA has been self-generated, with the significant support of alumni philanthropy. In recent years, however, costs for IA on our campus have grown significantly. In addition, there is an unfortunate history of our IA program allowing expenses to exceed budgeted revenues in a given year, generating deficits that, on balance, have been passed to the campus to cover. The issue of deficits was carefully discussed in 2006 and IA committed to a financial plan to avoid in-period deficits, to shrink the level of campus institutional financial support while remaining committed to a comprehensive and nationally competitive program. IA delivered on this plan in the subsequent period until it became apparent in late FY2009 that, once again, substantial deficits had developed, largely as a result of less than anticipated revenue and, in part from higher expenses than forecast. As a program highly dependent on external sources of revenue, IA was extraordinarily exposed to the impact of the Great Recession. In recent months it has become clear that, today and in the near future, a significant structural deficit exists in the financial plan for IA at Berkeley. We are not alone; our peer institutions are confronting similar challenges across the country.

It is my view that today we must get our IA programs back on the path to financial sustainability. For some months, the administration and IA have been exploring a variety of options to ensure that we have a department whose size and scope is sustainable. While IA is exploring every possible avenue to reduce costs and increase revenues, it has become apparent that the campus will greatly benefit from well-informed advice and recommendations from important constituencies not directly connected with the department or the administration. Among other things, it is important to have reliable advice on what any possible changes in scope of IA might have on the Campaign for Berkeley and on alumni giving generally, both short and long term.

For these reasons, I am establishing a new Chancellor’s Advisory Council on Intercollegiate Athletics Financial Sustainability. This Council will begin work immediately in order to deliver a set of recommendations to me by early June. The Advisory Council will be made up of four leading alumni and four key members of our faculty. Beyond providing a forum for fresh and diverse perspectives, I also believe there will be significant benefit from interaction between representatives of two of our important constituencies.

The specific charge to the Council will include:

• Understand the recent and current financial and competitive state of our Intercollegiate Athletics program.

• Assess alternative approaches to putting our IA program on a financially sustainable path. Financial sustainability does not equate to complete self-sufficiency in the foreseeable future, but it does require a model whereby the IA department will consistently generate revenues (including campus support) that meet or exceed its expenses.

• Assess possible impacts of changes in the scope of IA on philanthropy to our academic programs.

• With respect to the most promising alternatives, the Council will develop a short list for me to consider, including the pros and cons of each.

Please keep in mind that we have significant budget challenges at the moment and they will likely continue for the near future. Thus, we must be prepared to evaluate all options while remembering our athletic traditions and the benefits, both tangible and intangible, that an IA program committed to excellence brings to our campus and alumni communities.

This is an extraordinarily complicated endeavor that must take into account far more than just financial considerations. A serious effort must be made to understand both the risks and benefits of any change in IA’s program scope. Our commitment to gender equity goes beyond the legal requirements of Title IX. We cannot lose sight of the human impact decisions may have on our student athletes, coaches, and staff. For these reasons, the group will be provided with staff support and access to senior members of my administration who have the most detailed understanding of the challenges that now confront Cal Athletics. I have asked Vice Chancellor Frank Yeary to serve as a consultant to the Council, providing among other things financial advice and explanations of strategies which have been considered so far.

I encourage the Council to seek direct input from our community, especially from our students and from the University Athletics Board, which advises me on issues related to intercollegiate athletics. I also expect that the anticipated report and recommendations from the Academic Senate’s Intercollegiate Athletics Task Force will be reviewed and carefully considered by this Advisory Council.

While a final decision is ultimately my responsibility, there are no foregone conclusions. I truly desire input from this dedicated group, and the many people who have the campus’s best interests at heart.

There should be no doubt that we fully intend to provide IA with continued financial support as long as it is required to ensure that we remain true to our tradition of comprehensive excellence and continue to support a vision for the university that encompasses the broadest possible range of educational opportunities. It is worth noting that substantial institutional support for IA is viewed as an appropriate and beneficial use of campus funds by nearly every single one of our academic peers, both public and private. At the same time we must all be assured that the scope of the overall program and the level of required institutional support are sustainable going forward.

Thank you for your willingness to take on this very important and challenging effort. I personally look forward to talking to you and hearing your advice.