Central University of Illinois has a newly appointed president, Catherine Husker. This has been a challenging budget year due to the difficulties of getting a state budget passed in the State Legislature. It appears from all reports that the budget that may get passed will be only 90% of last years state appropriations for the University. This means the University will have to cut their own operating budget for next year because of the States expected reduction in appropriations to higher education.

Husker just had a meeting with the athletic director of the university, Gareth Connor, to discuss the budget for the athletic department. Central University has been a mens football and basketball powerhouse for the last several decades. However, the womens athletic program has had less success. Last year, though, the womens basketball team was one of the teams selected to participate in the NCAA Womens Basketball Competition through an at-large bid due to their outstanding season.

Connor and Husker discussed the 2018 Athletic Department budget, which Connor believed was the final draft. The meeting did not go well. In fact, it went terribly. Husker discussed four grave concerns she had about the Athletic Department budget and requested Connor to review and revise the budget in light of her concerns below. Draft II of the budget is due in two weeks time.

Concern 1: The Athletic Department is budgeting a loss of over $3 million. Given the tight fiscal position of the university, this outcome is unacceptable to Husker. A budgeted loss of $1 million is the most she will tolerate for 2018. By 2019 the Athletic Department has to operate with a balanced budget. She tells Connor this is nonnegotiable.

Concern 2: The low allocation of money to the womens athletic program. Fox Valley News, a tabloid television show, recently ran a program titled Its a Mans World at Central University Athletics Program. Husker said Connor is treating woman athletes as third-class citizens.

Concern 3: The low academic performance of the mens football athletes, many of whom have full scholarships. She notes that the local TV news recently ran an interview with three football-team students, only one of which exemplified the high academic credentials she wants Central to showcase to the world. As for the other two students, she calls one student incoherent and another incapable of stringing sentences together.

Concern 4: The outrageous salary paid to Bull Mason, the football coach. She notes it is twice that of the highest paid academic person on campus, a Nobel Prize winner. Moreover, Mason receives other payments from his Football the Central Way summer program for high school students.

Below is Draft I of the Athletic Department budget:

Central University 2017 Athletic Department Budget ($ millions)

Revenues:

Mens athletic programs $10.350

Womens athletic programs 0.780

Other (endowment income, gifts) 3.400 $14.530

Costs:

Mens athletic programs $11.040

Womens athletic programs 2.800

Other (non-assigned to programs)* 3.700 17.540

Operating Income $( 3.010)

*Other non-assigned programs include rugby, soccer and volleyball

Mens Athletic Programs:

Football Basketball Swimming Other Total

Revenues $8.600 $1.500 $0.100 $0.150 $10.350

Costs 7.400 2.700 0.300 0.640 11.040

Full Scholarships 37 21 6 4 68

Womens Athletic Programs:

Basketball Swimming Other Total

Revenues $0.600 $0.080 $0.100 $ 0.780

Costs 1.800 0.200 0.800 2.800

Full Scholarships 11 4 2 17

REQUIRED:

Connor will be holding a half-day meeting with key officials of the Athletic Department (of which your team are some of these key officials) to discuss the university presidents concerns. In order for your team of officials to be prepared to discuss the concerns of the president at this meeting, please answer the following questions prior to the meeting.

Questions:

Who are the stakeholders? (Worth 4 pts.)

The Athletic Department is operating at a loss. What are some of the ways the Department can increase revenues? Are there any potential pitfalls or problems with any of your ideas? (Worth 6 pts.)