Wednesday, August 14, 2013
Maryland's financial woes not going away
By Adam Rittenberg
Maryland joined the Big Ten for the money.
University president Wallace Loh made that explicitly clear Nov. 19 in announcing the school's move to the Big Ten beginning in 2014. Maryland's athletic program had slipped into financial ruins, leading to the elimination of seven sports following the 2011-12 academic year. The Big Ten, meanwhile, is pulling in record revenues and is poised to cash in on the biggest TV deal in college football history.
But Maryland's financial issues aren't going away any time soon, and the move to the Big Ten hardly will be an immediate panacea.
Maryland on Tuesday released a report put together by Loh's commission on Maryland's integration to the Big Ten. It states that the athletic program won't be on solid financial footing until the 2017-18 academic year. Maryland athletics operated at a $21 million deficit in the past year, a shortfall that can be attributed largely to the revenue the ACC is withholding as part of its plan to collect a $52 million exit fee from Maryland.
From The Washington Post:
According to the report, the university has loaned the athletic department -- which has a goal of being self-sufficient -- upwards of $21 million to overcome the deficit, with additional loans of $20 million potentially required if the ACC continues to withhold revenue. The loans are funded by the university’s Non-State Auxiliary Funds, which are collected from school-run programs such as parking tickets and dining services, according to a university spokesman.
"That's borrowed money," Loh said Monday in a telephone interview. "That's not a gift to athletics. Unless we get [money] back from the ACC, athletics has to pay that back."
The commission report states that the athletic department only will begin repaying the fee in the 2017-18 campaign, when it achieves a budget surplus because of projected Big Ten revenues. Another troubling finding: some Maryland athletes aren't provided with plans that "offer 21 healthy meals per week." So much for training table.
From The Post:
The commission's report also expressed concern about Maryland’s ability to compete with better-funded Big Ten teams, even after it begins to receive its full share of revenue from the conference’s lucrative television network in 2020. Maryland's athletic department currently falls "in the lowest quartile for revenues per student-athlete when compared to its Big Ten peers," according to the report, which expressed doubt that "the University will reach the per student-athlete spending of our Big Ten peers during the next 12 years," or until around 2025.
The big question for the Terps football program is whether it can compete in a bigger, better league, especially in a division (East) with Ohio State, Penn State, Michigan and Michigan State. What's clear from the report is Maryland will enter its new league with the dubious distinction of being the only Big Ten program without an indoor practice facility
. The commission's report states that such a facility shouldn't be funded through Big Ten revenues. Maryland must raise the funds, estimated at $50-$80 million, on its own.
"I'm prioritizing the Big Ten revenues for things such as academic support, training, nutrition, sports medicine and bringing back some teams, rather than $70 or $80 million for an indoor facility," Loh said. "In my judgement, the things I’ve mentioned are more important priorities for a facility. Other people may disagree, but in my mind, providing students with three square meals, having trainers and nutrition and academic support so they can graduate on time, is more important than a shiny, new indoor facility."
Loh makes a totally reasonable point, but facilities are integral to recruiting, especially when you're competing with heavyweights like Michigan, Ohio State and Penn State. Thankfully, Maryland should be able to sell a decent nutrition program, but wide-eyed recruits are looking for so much more.
It's odd to see the deep-pocketed Big Ten associating itself with a school in such dire financial straits.
The Washington D.C. market had better be worth it.