Athletics budget deficit $213K less than expected

The IU Athletics Department ended last year with a smaller budget deficit than predicted, but the department is still $7.2 million in debt, said Kathleen McNeely, IU's executive director of Financial Management Services. \nBefore the department presented its $55 million facility upgrades plan Wednesday, McNeely updated the board of trustees on the financial progress the athletics department has made since it introduced its five-year financial plan last year. \nThe department budgeted for a $1.1 million dollar loss last year but ended the year only $887,000 in the red. \n"Athletics actually had, what I would consider, a very, very good year financially," McNeely said.\nIn 2004 the athletics department reported a $2.7 million operating budget deficit. In 2005 it reported a $1.8 million deficit.\n"I think this is very good news, and it exceeds our expectations in the context of the five-year plan which you approved," IU President Adam Herbert told the trustees. \nIncreased football revenue helped bolster the department's numbers, McNeely said. The department made $968,000 more than budgeted in football sales, and it negotiated $401,000 in payments for ticket sales at away games. \nMcNeely also said the department's budget already accounted for former IU basketball coach Mike Davis' contract buyout, estimated at more than $800,000.\nThis is the last year the department will pay former IU football coach Gerry DiNardo, who is still owed $230,000, said Kevin Clark, associate athletics director of business and finance.\nThough the department's total debt is $9 million, $1.8 million of that belongs to the IU golf course, and McNeely said the University considers the athletics department and the golf course two separate entities. \nThe athletics department only borrows money from the University, something trustee Patrick Shoulders wanted to clarify for those in attendance. \n"We're talking -- not owing a bank -- we're talking about owing ourselves," Shoulders said. "It's like taking money out of the right pocket and putting it back over in the left."\nLast year, Director of Athletics Rick Greenspan presented the department's five-year budget to the trustees. The budget eliminated a $30 mandatory student athletics fee but reallocated 500 student seats for men's basketball games to alumni and raised student basketball ticket prices by $5. Last year the athletics department projected $1,016,200 in income from the athletics fee. Without the fee, but including the seat reallocation and ticket price increase, the department expects to make $1,280,400 in revenue. \nThe budget calls for an elimination of a yearly deficit by 2008. The budget did not include any plan to repay the debt the department has already accumulated. \n"President Herbert gave me a charge," Greenspan said. "The charge was explicit: 'Build a financially viable, gender-equitable athletic department on which student-athletes excel academically and athletically.' I have taken this charge seriously and reflect on it daily."\nJudith Palmer, IU vice president and chief financial officer, said the trustees would receive a full financial report on the athletics department during Thursday's meeting.