Following Cal's first year in the Atlantic Coast Conference, the school reported soaring athletics costs and a widening deficit.
According The San Francisco Chronicle, total operating expenses climbed $165 million in the 2024-25 fiscal year, up from $149 million in the previous year.
Revenues also increase, rising to about $153 million in 2024-25. That's up $33 million year over year, but the Chronicle points out that most of the revenue increase came via payments from UCLA ($10 million) and the system-wide University of California of the President ($15 million).
Overall, Cal's budget deficit stands at $24 million for the most recent fiscal year, which includes $12 million in payments for the renovation of Memorial Stadium and other capital improvement projects.
Cal is also in the middle of navigating direct payments to athletes, which are capped at $20.5 million as a result of the House settlement.
"That will be the biggest change you see for '25-'26, the implementation of the House settlement," Cal co-athletic director Jay Larson said in a Chronicle interview Tuesday. "It adds a $20.5 million expense line. We need to generate the revenue … and we're pleased our donor community has really stepped up, and is primarily funding our revenue sharing."
Cal raised a record $82 million in the past fiscal year, but most of that went to the endowments of five programs, including men's and women's golf, men's swimming, water polo and rubgy.
Larson said that sustaining that level of support could be a challenge.
"That's the question, but we're pleased with the early results," Larson said. "The more success we have, the more revenue we can generate in ticket sales and sponsorships and so forth. The idea is to reduce that deficit over time, and the way to do that is to generate more revenue."
The move to the ACC markedly increased costs for the athletic department, with team travel costs jumping from $14.3 million from $10.3 million year over year. Coaching expenses also increased to $30.8 million from $28.8 million.
Meanwhile media rights revenue dropped, plunging from $25 million in the school's final year as a Pac-12 member to $11 million in its first year as a member of the ACC. Cal and Stanford both conceded to a reduced share of media right revenue for a seven-year period.
"Our first year in the ACC was exactly what we expected from a financial standpoint, exactly what we prepared for," Larson said. "We knew we'd have a reduced (media rights) revenue share, we knew we'd have increased travel expenses, and both things played out as we expected.
"More broadly, we're excited about the framework we're putting in place to enhance our financial future. I think we have the winds at our back."
