WVU Athletics Goes from $13M Loss to $4.2M Profit in One Year

MORGANTOWN - A year after recording one of the largest deficits in its history, West Virginia's athletic department is back in the black, at least for the most recent fiscal year.

And it made a far larger profit that anyone expected.

The school finally completed and released its financial report Friday and a year after losing almost $13 million, the athletic department showed a profit of $4.2 million for the fiscal year that ended June 30.

The exact total was $4,205,104. The department's revenue was $77,706,696 during the fiscal year, compared to operating expenses of $73,501,593.

WVU athletic director Oliver Luck had said in recent months that he expected the department to break even or show a slight profit. His most generous estimate was perhaps $50,000.

The difference came in two areas, but primarily in fundraising. Where the school expected its contributions to be in the $18-19 million range, the final total was almost $24 million.

The school's revenue-sharing check from the Big 12 was also larger than expected - $10 million instead of the $8-to-$9 million range.

"Now that our budget numbers are in, I want to say how very pleased and proud I am of our entire athletic department,'' Luck said. "And I cannot say enough about the job turned in by our Mountaineer Athletic Club staff to reach record-breaking fundraising numbers for the second straight year. I also want to thank the MAC members who rallied around us, and the many fans who purchased tickets to various athletic events. We all know how important it is to have a self-supporting athletic department, and that goal has been reached once again.''

The biggest reason for the $12.9 million deficit during the 2011-12 fiscal year was the school's departure from the Big East Conference for the Big 12. In order to escape from its Big East obligations, the school negotiated a buyout of $20 million. And while roughly half of that was deferred, the school did give up its entire Big East profit-sharing pot of almost $10 million.

For WVU, perhaps the most encouraging aspect of the financial report is what it might bode for the future. The school turned a $4.2 million profit despite receiving only a 50-percent share of revenue from the Big 12. As a new member, that figure grows to 67 percent during the current fiscal year, then to 85 percent and finally to a full share in 2015-16.

The Big 12 distributed shares to its members this year of roughly $20 million. Because of escalating rights fees with television, a full share by the time WVU receives one could be in the $25 million range or more.

And while the department still has some outstanding debts that are scheduled to be paid in the future, the repayment of what remains from the Big East buyout is relatively minimal.

Of the roughly $20 million paid to the Big East, half of that is already off the books because of last year's forfeiture of revenue sharing. The remaining $10 million was paid through a loan from the Big 12, which is to write off half of that. The other half, $5 million, is to be paid with interest in five installments, but not until WVU begins receiving a full share of Big 12 conference revenues. So in essence, that will reduce those 100-percent shares only by about four percent for five years while the debt is being paid.

As for the current financial report, the largest revenue came from contributions of $23,916,171, ticket sales of $21,411,615 and NCAA/Big 12 revenue of $10,354,499. The next-largest income lines were royalties, advertisements and sponsorships of $4,509,641 and student fees of $4,330,002.

The smallest line item of revenue was state and institutional support, just $131,485.

As for expenditures, the largest by far was compensation - salaries for coaches, administrators and staff totaling $26,397,507. The figure also includes severance pay and an accounting of funds committed to employment and post-employment benefits.

There were also large line items for facilities maintenance and rental of $10,669,275 (almost half of which is depreciation), student aid (scholarships paid by the department to the school) of $8,737,980 and team travel of $6,920,683. There is also a line item in the report for "other expenses'' of $8,001,410. The school paid $3,900,414 for game expenses and $3,529,447 for equipment, uniforms and supplies.

WVU ATHLETIC REVENUES, EXPENSES

Revenue Total

Ticket sales $21,411,615

Student fees $4,330,002

Guarantees $2,841,365

Contributions $23,916,171

Direct state/Institutional support $131,485

NCAA/Conference revenue $10,354,499

Broadcast/Radio/Television/Internet $2,350,493

Programs, concessions, novelty, parking $3,437,048

Royalties, advertisements, sponsorships $4,509,641

Endowment and investment income (loss) $1,262,032

Other revenue $3,162,347

Total revenue $77,706,697

Expenses Total

Student aid $8,737,980

Compensation $26,397,507

Recruiting expenses $1,318,022

Team travel $6,920,683

Equipment/Uniforms/Supplies $3,529,447

Game expenses $3,900,414

Fundraising, marketing, promotion $750,605

Direct facilities, maintenance and rental $10,669,275

Spirit groups and camps $1,111,713

Medical expense and insurance $481,628

Professional services/Membership dues $1,682,910

Other expenses $8,001,410

Total expenses $73,501,593

Excess of revenues collected $4,205,104

Reach Dave Hickman at 304-348-1734 or [email protected] or follow him at twitter.com/dphickman1