The Consultants were asked to assess UTSA's current and future financial issues pertaining to considerations for NCAA Division I-AA/I-A Football. To place this potential advancement in the proper regional and national context, the Consultants analyzed data comparing UTSA's position to selected benchmarks. This activity along with a review of selected Athletics and University planning documents assisted the Consultants in developing a set of revenue and expense considerations. The benchmark data included the following:
- UTSA Athletics FY 2006 Budget, as provided by the University Office of Business Affairs and the Athletics Department.
- Recent EADA data from the top 25 Division I-AA football schools, a I-AA Conference (Southland) and three I-A conferences: Conference USA (C-USA), the Sun Belt Conference (SBC) and the Western Athletic Conference (WAC); this data was presented in the 2005 Division I Financial Report-University of Texas at San Antonio, Athletics Financial Services, LLC.
- Revenue and Expense Benchmarks with 10 public regional I-A Athletic Programs - representing C-USA, Big East Conference, WAC and the SBC.
The Consultants developed a ten-year pro forma budget projection for Fiscal Years 2006 through 2015 (University of Texas at San Antonio Athletics Pro Forma Financial Projections through FY 2015). Revenue and expense assumptions for the 10-year period are presented in Attachment 1. It is important to note that such pro forma data is used for analytical purposes assuming all assumptions are static without flebility for contingencies.
The University understands that additional student fee funding will be an essential revenue stream for the addition of football, especially until Athletics' External Affairs Support Systems are fully implemented. Moreover, institutional support is typical of most Division I athletics programs.
Conclusions and Recommendations are summarized at the end of this section.
The consideration by UTSA to add the sport of football would place UTSA in that group of 237 NCAA Division I institutions that sponsor football at the I-AA (119) or I-A (118) level. UTSA, classified as I-AAA, is one of 91 institutions who do not sponsor football.
Historically, the institutional financial commitment to the sport of football is significant with more than three-fourths of the athletics programs' revenues provided by direct institutional budget support, student fees and/or government support. Most I-A athletics departments are able to generate less than one-fourth of their total operating revenue from gate receipts, donations, conference distributions and miscellaneous sources such as television, radio, corporate sponsorships and special events.
The average I-A program expends the majority of its funds on salaries and scholarships with each category accounting for over one-third of the total budget. Other sizeable expense categories include team travel and equipment while a smaller percentage is spent on recruiting.
If UTSA adds football, Athletics expects its near term revenue to come primarily from student fees and University funding; significant financial augmentation from annual donors, corporate sponsors and ticket sales is expected beginning in FY 2007-2008. On the expense side, using comparative EADA data, the Top 25 Division I-AA programs in FY 2005 had a total budget of over $4 million more than that of UTSA; the margin between UTSA and the 10 public regional I-A programs is around $12 million. With the addition of football, UTSA's future budgets will escalate dramatically due to the costs of scholarships, personnel and operations. UTSA's strategy for adding Football is built into the Pro Forma.
Revenues
Using the most recent comparative EADA data, UTSA Athletics' FY 2005 total revenues of $6,808,591 are $4.8 to $12.5 million less than the average revenue budgets for the SBC, WAC and C-USA revenues for FY 2005.
Football revenues range from $1 million in the Southland Conference to $2.1 million for the Top 25 I-AA schools. The revenue amounts and range is even greater at the benchmarked I-A conferences with a low of $2.8 million in the Sun Belt Conference to a high of $4.9 million in Conference USA.
UTSA's Men's Basketball and Women's Basketball combined to generate appromately $436,000 of the Department's total revenue in FY 2005 [1]. The Top 25 I-AA schools' Basketball programs combined to generate $1.26 million of the athletics department's revenue. In the I-A benchmarked conferences, the combined basketball revenue ranged from $1.45 million in the Sun Belt to $2.27 million in Conference USA. Substantial growth in basketball related income will also be an important factor in the overall success of the Athletics Department competing in the I-AA/I-A football conference environment.
The Pro Forma estimates that Student Fees will increase from $5.8 million in FY 2006-07 to $12.9 million in FY 20145 to support football. Student Fees combined with Tuition Waivers and a University Allocation place the Institutional Support total to nearly $7.25 million in FY 2006-07. Comparatively, the 10 regional Division I-A benchmark schools received an average of $7.5 million in Institutional Support in FY 2005; institutional funding with those schools ranged from $4.7 million to $13.8 million. UTSA's total Institutional Support is projected to reach $14.5 million in the first year of Division I-A (FY 20145).
Expenses
UTSA's FY 2005 budget was $6,808,591; therefore, it is apparent that UTSA must increase its Athletics budget to compare with an average of $10,819,655 found in the Top 25 Division I-AA schools. There is also a sizable difference between the total average expenses of UTSA and those of three regional I-A conferences: the total average expenses for the Sun Belt Conference ($11,710,339), Western Athletic Conference ($13,909,078) and Conference USA ($18,378,423).
Assuming UTSA "fast tracks" to Division I-A, the Pro Forma projects scholarship expenses increasing from $2.6 million to $6.8 million by FY 20145. This substantial growth is the result of adding 85 scholarships for football and an estimated 7 percent annual cost increase in tuition, fees, food and housing. Additionally, salaries and benefits, including cost of living, for coaches grows from $1.6 million to $3.26 million in FY 2014-2015. Administrative staff salaries, benefits and cost of living would increase from $1.6 million to $2.9 million by FY 2014-2015.
The University allocation is projected to remain constant while Athletics has determined that it will raise a total of appromately $13.1 million during the eight year period from FY 2007-2008 through FY 2014-2015 to offset expenses and balance the budget.