SBD/May 2, 2012/Colleges

SMU Sees Athletic Department Debt Continually Rise Since Orsini Brought On As AD

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SMU athletics have lost an average $18.6M annually over the last four years
Southern Methodist Univ. has enjoyed "greater success on the field and landing high-profile coaches” in recent years, but the school's athletic department “is piling up substantial losses,” according to Mackenzie O’Hara of the SMU DAILY CAMPUS. Over the past “seven years, its losses have topped $113 million.” The deficit is equal to “almost half of all tuition and fees paid by students" in the '11-12 school year. The athletic department’s annual deficit “rose dramatically” in ’06 after Steve Orsini was hired as AD. During the three years prior to Orsini's arrival, the athletic department “lost an average of $12.9 million a year.” However, during Orsini’s first four years, annual losses “jumped to an average of $18.6 million -- an increase of 44 percent.” Orsini “acknowledged that the data was accurate, saying that SMU knows about the operating deficit and approves it as a part of the university’s budget.” SMU Athletic Policies Committee Faculty Chair Dan Orlovsky said that the school's comparatively high losses “are a result of little television money, low attendance at football games, high expenditures in recent years and travel expenses.” Orlovsky: "It costs money to do business, that’s the bottom line. You can’t make money if you don’t put money in.” O’Hara reported SMU officials “deny that the athletic department operates under a deficit” and instead consider it “a budgeted university subsidy -- an investment that brings national exposure.” But budget documents show “spending has accelerated since Orsini started calling the shots.” Expenses amounted to $26.6M in '07 and increased to $35.8M in '10, the "most recent year that actual figures are available.” Orsini said that the jump in expenses is a “result of increased scholarships for student athletes.” However, the figures show annual grants-in-aid in the Orsini era “have increased by $3.26 million, or 41 percent.” Excluding scholarships, annual expenses “post-Orsini have increased by $5.91 million, or 35 percent” (DAILY CAMPUS, 5/1).

MISMANAGED MONEY: Univ. of Southern Mississippi interim AD Jeff Hammond said that it “will take years for the athletics department to overcome debt of more than $1 million.” Hammond said, “It was due to a lack of leadership. It was due to mismanagement. It was due to a lack of accountability and probably a lack of creative thinking in ways to develop revenue, such as scheduling." Hammond last Friday said that the department's debt “was discovered through an internal audit.” In Mississippi, Patrick Magee noted the athletic department's budget “is about $20 million.” Hammond said that he “wasn't ready to disclose in detail what brought about the debt.” However, he added that he and his staff “have taken new measures to make sure that the university works within its means to help shrink the budget shortfall.” Hammond also said that he “plans on looking into football and basketball road games that could be revenue producers for USM.” Hammond in January replaced retiring AD Richard Giannini, who had been with the school for nearly 13 years (HATTIESBURG AMERICAN, 4/28).
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