Conference switch costs uncertain

Published Aug. 29, 2012

Butler University will incur increased costs as a result of the move to the Atlantic 10 Conference. However, administrators say they expect to make up the cost with increased revenue.

“We didn’t ignore the costs, but at the end of the day, those are immaterial,” said Bruce Arick, vice president of finance and administration. “The expectations down the road are that the (revenue) increase will be more than enough to offset any cost now.”

Travel Expenses Add to Cost
Butler’s athletics department spent almost $13.7 million for all 17 sports in 2010, according  to documents from Equity in Athletics Data Analysis.

That number is expected to increase this year due to additional costs in traveling to other A-10 schools.

The university and athletics department would not release specific numbers regarding the budget. As a private university, it is not required to do so.

Administrators also said they were hesitant to cite specific numbers with regard to the A-10 move because they would not know the exact figures until after the academic year.

President Jim Danko said he is estimating an increase of approximately $700,000 in travel expenses alone.

The actual figures are still uncertain, and Tom Crowley, associate athletic director for internal operations, said Butler is relying on estimations to determine the anticipated athletic budget.

Crowley said administrators have looked at other Midwest schools, including Xavier, Saint Louis and Dayton, to estimate and compare modes of transportation, hotel costs and the average per diem required for food.

“We looked at it from a big-picture standpoint and decided (the conference change) was for the best,” Crowley said. “There is a cost increase, but it allows us to increase recruitment, sell more tickets and be a vehicle for the university in the plan to grow.”

Finances were one of the major considerations of the A-10 when deciding whether to accept Butler or not.

“Butler is a perfect fit because of their flagship sport in men’s basketball, and academically they are a great institution,” A-10 Commissioner Bernadette McGlade said. “But we also respect their financial commitment to the program and to the success of athletics as a whole.”

Where the Money Comes From
The university takes that commitment seriously, as shown by the $4.3 million allocation from the university budget to the athletic department every year.

The allocation comes from a variety of sources, including tuition and fees, net revenue, room and board fees, fundraising, endowment draw and general interest income.

Arick said he expects the allocation amount to remain the same. He added that he is  going to continue working with Danko and Athletic Director Barry Collier to make sure everything works.

“I see (the move) as very manageable on the economic side, but I will work with them to cover any gaps if there are any,” Arick said.

Danko said that he would be willing to use extra marketing budget money for the branding benefits of getting the university’s name out on the East Coast.

However, both Arick and Collier said they will not know specific costs until after the year is over.

“From a financial side, there is some risk because we are working with very rough estimates, but I can say comfortably it is a good move,” Arick said. “Obviously we will know for sure in a year.”

Administrators will rely on donations to make up a large part of the difference. As the university said, it hopes the athletic department’s fundraising efforts will cover the majority of extra costs.

Donations Could Increase with Change
Bill Lynch, associate athletic director for development, said the reaction he has received from fans and donors has been positive, but there is still pressure to raise more money.

“I think we all feel the need to continue to raise money so that we can serve all of our student-athletes,” Lynch said. “Our athletes are stepping up their level of competition, and that means we all have to step up in what we do.”

Not only does the university expect donations to increase, but Danko said he is projecting an increase in ticket sales and conference revenue sharing.

Collier said that with all of these facts taken into consideration, he is confident that it was the best move.

“We looked at this long-term and the fact is there are going to be more costs, but we think the long-term revenue will overcome that,” Collier said. “The expenses will be worth it.”


Related posts