SBD/June 5, 2014/Colleges

Cal-Berkeley Athletics Reducing Subsidies, Looks To Continue Increasing Revenue

Five of the 227 public universities that were in D-I from the '09-10 school year through '12-13 have "managed to reduce their subsidies for athletics in each of the past three years," and Cal was the "only one of those five to drop its subsidies" by more than $1.2M, according to Berkowitz, Schnaars & Upton of USA TODAY. The other four schools are Illinois, Missouri, South Carolina State and Southern Illinois. Whether Cal and its "30-sport, 850-athlete program can continue on its path remains to be seen." It will "have to keep increasing its revenue" to pay off $445M in "long-term facilities debt and the cost of additional benefits for athletes that could be triggered by Division I governance changes and/or various litigation against the NCAA." Cal has been "helped considerably" by the conference's 12-year, $3B TV contract. Cal went from $57.2M in athletics operating revenue in '09-10 and having $69.3M in "operational spending" to generating $86.9M in operating revenue in '12-13 and having $90.1M in operational spending. Cal is in the midst of a $321M "seismic-retrofitting and renovation of its football stadium" and the construction of a $153M athletics training facility. But AD Sandy Barbour said, "I think it's widely known that we have not blindly followed the arms race." However, Cal's athletic program "did start becoming like many others in undertaking business deals the school never had seen before: selling long-term seat licenses for premium locations in the stadium, negotiating a naming-rights contract for the stadium's field, adding 15 people to its in-house sales and service staff and leasing space in the stadium to other campus units." Still, other "unprecedented moves have come more recently," including hosting an Inter Milan-Real Madrid friendly and moving its game against Oregon to Levi's Stadium (USA TODAY, 6/5).
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