Washington State University said it will be making some changes to offset recent financial issues that have left the athletic department $11.5 million short this year.
Athletics Director Pat Chun told reporters Friday that 2023’s budget shortfall is “an aberration” and that his office would be working to tighten spending, the Spokesman-Review reported. Chun also said revenue from a new TV deal and the college football playoff expansion has the university on a path to a better financial situation after the close of the fiscal year later this month.
“We’re going to have to make some tough decisions this year,” Chun said, as reported by the Spokesman-Review. “It’s no different than most years.”
In late May, Chun and the university had announced actions they would take to help offset a projected budget deficit, including a temporary freeze on current and future positions, non-essential travel and new professional development.
Related: Faced with Pac-12 Financial Headwinds, WSU Athletics Issues Hiring Freeze
Now WSU said it wants to tap into other university funding and restructure its financial oversight after a combination of Pac-12 woes and overspending this year.
The Board of Regents will meet in Pullman next week, where a plan will be pitched to decision-makers to reconcile this year’s budget and plan for next year’s, the newspaper reported.
Chun also acknowledged the April resignation of Brent Meyer, former chief financial officer of athletics who started at the university in October, and said the department was looking for his replacement.
“We’ve gone five out of the last 13 months without an athletics CFO,” Chun said. “So the transition in that role has impacted us.”
The plan that will be pitched to regents calls for a new infusion of cash into the department labeled as “institutional support,” which will total $1.4 million this year and increase to $2.6 million for fiscal years 2026 and 2027, respectively, the Spokesman-Review reported. Bill Stevens, a spokesman for the university’s athletics department, said the source of the money was “self-sustaining, noncore local funds,” which he said included money on hand for the university that is not intended to be used for academics. He said Friday he could not provide more specifics about the source of that money.
WSU is required to report its athletics budget to comply with a state law passed in 2017 and championed by state Sen. Andy Billig, D-Spokane. The law states if a deficit is expected, the board of regents or trustees must "approve a plan for how programs will reduce operating deficits in future fiscal years."
In addition to its financial reports to the regents, the department includes plans for what it’s calling a change to financial management oversight. Chun and the university’s vice president for finance and administration will meet monthly under the new plan, along with a member of the board of regents and the Faculty Senate to review revenue and expenses.
A new athletics area finance manager position will be created, and the department will have to reconcile its purchases monthly, including travel expenses, under the plan that will be proposed to the board.
The department said its expenses in 2023 exceeded forecasts by $5.5 million. The bulk of that total ($4.8 million) was from travel, recruiting, meals for student-athletes and medical expenses. The rest was due to increases in pay for employees and larger-than-expected financial aid awards to athletes.
The Spokesman-Review reported that the Pac-12 woes also accounted for part of the hole in the department’s budget. The conference has revised its revenue distributions because of overpayment from a TV partner, identified as Comcast in multiple reports, and WSU is expecting $3.5 million less than what it was allotted this year as a result. The conference also spent more than it anticipated moving its headquarters out of San Francisco.
The university does not anticipate having to cut any sports, and financial decisions that are made will have “little to no effect on our current student-athletes,” Chun said. “Our most critical hires are the ones that work directly with our student-athletes,” he said. “Those are the ones that we will prioritize once the calendar turns for us here on July 1.”
In order to reconcile the budget for 2023, the department will ask regents to sign off on a transfer of funds from other departments to cover an ongoing budget deficit that is expected to total about $74.1 million this year. That includes debt from past and future construction projects, including a planned Champions Center on the Pullman campus that will consolidate athletics staff. The project is expected to break ground next year.
“Some of that is existing debt that were decisions made because we needed facility upgrades in the past, and those decisions were made by previous administrations, but the need was there,” Chun said.
The plan calls for moving $57.6 million from housing and dining, $5 million from parking and $11.5 million from unidentified reserves, as reported by the Spokesman-Review.
