David Tax is the athletics director of Maritime University (MU). He has been director for more than 10 years. MU is a men's football and basketball powerhouse. The women's athletics program, however, has had less success. Last year, the women's basketball team finally had more wins than losses.

Tax has just had a meeting with Laura Medley, the newly appointed president of MU. It did not go well. Medley and Tax discussed what she called "Draft I" of the 2016 athletics department budget. He had believed it was the final draft. Medley expressed four grave concerns about Draft I in particular and about the MU athletics program in general:

• Concern 1. The athletics department was budgeting a loss of more than $3.6 million in 2016. Given the tight fiscal position of the university, this was unacceptable. A budgeted loss of $1.2 million was the most she would tolerate for 2016. Draft II of the 2016 budget was due in two weeks' time. By 2017, the athletics department had to operate with a balanced budget. She told Tax this was nonnegotiable.

• Concern 2. There was very little money allocated to the women's athletics program. Frontline, a tabloid television show, recently ran a program titled "It's a Man's World at the Maritime University Athletics Program." Medley said Tax was treating female athletes as "third-class citizens."

• Concern 3. The men's football athletes, many of whom had full scholarships, had poor academic performance. Medley noted that the local TV news recently ran an interview with three football team students, none of whom "exemplified the high academic credentials she wanted Maritime to showcase to the world." She called one student "incoherent" and another "incapable of stringing sentences together."

• Concern 4. The salary paid to Bill Madden, the football coach, was outrageous. Medley noted it was twice that of the highest-paid academic on campus, a Nobel Prize winner! Moreover, Madden received other payments from his "Football the Atlantic Way" summer program for high-school students.

The following exhibit is a summary of the Draft I athletics department budget for 2016.

Maritime University 2016 Athletics Department Budget (in $ millions)

Instructions
Form groups of two or more students to complete the following requirement.
Required
Your group should discuss the concerns noted both from quantitative and qualitative perspectives. What should be addressed in preparing Draft II of the athletics department's 2016 budget? This draft will form the basis of a half-day meeting Tax will have with key officials of the athletics department.

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Revenues: Men's athletics programs Women's athletics programs Other (endowment income, gifts) $12.420 0.936 4.080 17.436 Costs Men's athletics programs Women's athletics programs Other (not assigned to programs) 13.248 3.360 4.440 21.048 Operating income $(3.612) Men's Athletics Programs Other Total Football Basketbal Swimming S1.800 3.240 $10.320 S0.120 S0.180 $12.420 Revenues Costs Full student scholarships Women's Athletic Programs 8.880 0.360 0.768 13.248 37 21 68 Revenues Costs Full student scholarships Basketball S 0.720 2.160 Swimming S0.096 0.240 Other S0.120 0.960 Total $0.936 3.360 17