SBD/August 17, 2017/Colleges

New Cal AD Will Face Management Of Athletic Department Having Financial Crisis

Cal's athletic department has lost more than $20M in the past fiscal year
Cal will "hire its next AD amid a financial crisis, dipping alumni satisfaction and tickets sales, and with first-year head coaches leading its two biggest revenue-generating sports: football and men’s basketball" after AD Mike Williams announced he will not seek a contract extension, according to Rusty Simmons of the S.F. CHRONICLE. New Cal Chancellor Carol Christ has been "adamant about a campus-wide neutralization of debt" by '20, and that goal will be a "colossal task." The athletic department "lost more than" $20M in the past fiscal year, "largely because of debt" from a nearly $500M renovation of Memorial Stadium. Christ said that "cutting entire sports is a 'last resort' and that the university may assume a large portion of the athletic department’s stadium debt -- despite faculty opposition." The university has "not specified a timeline for hiring Williams’ replacement or decided whether to employ an outside search firm" (S.F. CHRONICLE, 8/17). The San Jose Mercury News' Jon Wilner, who broke the news of Williams' future, said there is a "revolving door" currently at Cal, as it is a "very difficult environment to educate or administrate in right now, just with the financial situation.” There are a "lot of benefits" to being the school's AD, but the “financial hurdle is gigantic." The pool of candidates "will depend, to a certain extent, on what happens in the next couple of months with the budget situation." Wilner noted Christ has indicated they might "not cut sports, maybe they’ll be able to figure out other ways to manage down the deficit." Wilner: "If they get that resolved and then they start their search, they could have a lot better candidate pool. If they want to bring somebody in to bring the hammer, then it’s going to be a lot tougher” ("1.Question," TURNKEYSEARCH.com, 8/16).

TALE OF THE TAPE: Williams said that academic achievements at Cal have been his "proudest accomplishment." Williams: "Going from worst to first in the APR in football I think, is an extraordinary story. I think that the work we did with the short-term finances, with Under Armour and Learfield and $7 million net new money every year for the next 10 years. Those are pretty extraordinary accomplishments, in terms of that revenue space, I think if you look at the core of Cal athletics, I think it's in a pretty strong space." He added: "There were and there remain a lot of misconceptions about the stadium and stadium financing and that debt. I think, still, there is much work to be done in explaining what the operating budget for Cal Athletics looks like, with and without the stadium debt" (SCOUT.com, 8/16).

GLOOM & DOOM? NBCSPORTSBAYAREA.com's Ray Ratto noted Cal is "staring at quite possibly the bleakest future a major athletic university ever has." Cal’s been "blowing through money it hasn’t been taking in for years upon years, didn’t realize the deficit-cutting benefits of the Pac-12 Network (because they largely don’t exist)." The day of reckoning "looms closer and closer, especially now" that Christ "described the deficit as 'corrosive' and has insisted that the athletic department have a balanced budget" by '20 (NBCSPORTSBAYAREA.com, 8/16).
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