Cal Chancellor Announces Plans For School To Assume Portion Of Athletic Department Debt
Cal Chancellor Carol Christ on Thursday said that the school's central campus will "assume a portion of crushing annual debt" from the athletic department related to the Memorial Stadium and training center projects, according to Jon Wilner of the San Jose MERCURY NEWS. The move will have "sweeping implications for Cal’s athletic department." Christ also announced that athletics "must balance its budget" by '20. Wilner writes the move is "potentially a game-changer" for the athletic department in matters "ranging from coaching salaries and recruiting budgets to the hiring" of a new AD. As such, it has the "potential to impact the Pac-12." Cal is the conference’s "premier public university, with a huge alumni base and global reach." A fiscally stable and competitive athletic department, specifically the football and men’s basketball programs, would "carry far-reaching benefits." There is "no timetable for the implementation of the debt transfer, nor did Christ reveal the structure." But it "figures to be a significant percentage." It is "simply not possible for athletics to be responsible for the full debt load and balance its budget and maintain its current size (30 sports)." The assumption of debt by the central campus is "viewed by some in the Cal administration as a moral issue: The UC Regents ordered the Bears to retrofit the 95-year-old facility, which sits on the Hayward Fault, because of public safety concerns." While the total debt of $460M "includes the cost of the Simpson training center and upgraded amenities to the stadium," the portion "directly related to seismic improvements is believed to be at least" $230M. The athletic department is "expected to close" FY '17 with a $16M deficit, but that "includes" the $18M in debt service (San Jose MERCURY NEWS, 11/3).