WSU’s Board of Regents met Jun 9 and approved the athletic budget adjustment for 2023, the transfers to cover the 2023 athletics deficit, approval of the athletic budget for 2024 and the delegation of authority to President Kirk Schulz related to the WSU’s athletic media rights. 

Leslie Brunelli, finance and administration executive vice president, said there is an anticipated $11.5 million budget shortfall for this fiscal year.

“We did have some positive variances,” Assistant Vice President of Business and Financial Services, John Haarlow said. “We outperformed in ticket sales, we outperformed in our revenue, in our sponsorship and advertising,”

Haarlow said the biggest negative was the $1.4 million shortfall in the Pac-12 and NCAA distributions.

Some other negatives WSU Athletics endured included a $700,000 decline in the purchase of student sports pass, fees and waivers due to decreased enrollment. They also suffered a $600,000 shortfall in other revenues such as parking and concessions.

According to the slideshow presentation at the meeting, when it comes to expenses WSU Athletic expects a $5.5 million shortfall.

There is a $300,000 compensation budget due to overtime pay, student wages and increases to contractual employees.

The financial aid this fiscal year was $400,000 over budget due to a larger anticipated amount of medical and degree completion aid awarded. This is where a student-athlete has exceeded their athletic eligibility but WSU Athletics still honors their scholarship as they complete their degree, Haarlow said.

“We are still seeing ramifications from COVID. During that time the NCAA expanded roster sizes and expanded scholarship amounts we could award and we are still seeing those amount of student-athletes as they continue through their coursework,” Haarlow said.

Since then roster sizes have been reduced back to normal.

According to the presentation, other team expenses such as travel, recruiting and student-athlete meals exceeded the budget by more than $4.8 million.

When WSU Athletics went into May, they realized something was wrong with the athletic budget and they then proceeded to implement steps to help mitigate a shortfall, Brunelli said.

According to the slideshow, they created a hiring freeze throughout WSU Athletics, which still remains and will remain until further review and start dates will be delayed. Non-essential travel and purchases were and still are halted. All new professional development is paused and a new policy regarding it with being revised and implemented and all expenses/purchases must receive advance approval by a sports administrator or deputy athletics director.

They did this in order to give their team time to figure out what had happened with the budget, WSU Athletics Director Pat Chun said.

What people will see going further will be more communication and work between athletics and financial administration, Brunelli said.

Fiscal Year 2024 Budget is planning for an increase in donations and contributions because this was a place they have done well in the past and can see it expanding and growing, Haarlow said.

According to the fiscal eyar 2024, a couple of the major areas they have revamped for the budget include the NCAA/PAC-12 which includes the shortfall for the next year. Waivers and student fees were changed based on the current enrollment.

WSU adjusted expenses compensation based on the civil service mass salary increases and reset student wages. When it came to scholarships they took into consideration the tuition increase. Sports programs, which include travel, medical and student-athlete meals were cut down to a lower standard and debt payments were increased to help the budget for 2024.

Haarlow said there is still work to do to close that gap but with the collaborative work between finance and athletics feel they confident in moving forward.  

Brunelli said this plan in its entirety took four weeks to pull together. 

“This really started over a decade ago because of the verbalized forecast of what the Pac-12 Network was supposed to be. Kirk’s predecessor [Elson S. Floyd], my predecessor [John Johnson], what was told to them what it would look like on the high end $10 to $12 million a year specifically from that one network. So decisions were made in that moment where that we used to receive $5 to $6 million in additional university support, that was reduced,” Chun said.

Where WSU Athletics is today they get $2 million a year in university support, he said. 

One of the major miscommunications between WSU Athletics and the coaches included how much money they had to spend, Chun said.

“The budgets they were spending to were unfortunately not set correctly,” he said. 

As a resolution to this, Chun, Brunelli and other staff will conduct monthly budget-to-actual reviews for the full Athletics budget including all revenues and expenses at the department level, Brunelli said.

They will also meet with the president to review the budget-to-actual summary and discuss any variance and corrective adjustments required to maintain a balanced budget.

Currently, the financial office needs to hire an Athletics Financial Officer who originally did not report to Chun but will now, she said.

Once they hire someone athletics will create a Budget and Finance Manager position to report to the Athletics AFO, Brunelli said.

According to the presentation, other ways Athletics is planning to strengthen financial management include reviewing the cost center and program structure to identify opportunities to streamline reporting to align with responsible unit leaders within the Athletics organization. They are doing additional training for coaches, and are a formal budgetary process, review approval levels for hiring, compensation, operating, capital expenses and ensure that the athletics business office completes a monthly reconciliation.

During the meeting Student Regent Reanne Chilton asked as to what would happen if WSU did not cover the deficit.

Brunelli said the deficit needed to be covered. 

Action item one regarding the adjustment to fiscal year 2023, two regarding the transfers to cover the defict and four regarding WSU Athletic media rights were agreed upon unanimously, however, action item three regarding the 2024 budget was voted with only one member, Judith McDonald, opposing the budget.

“I will emphasize that this a symbolic vote to say that we got to do better, it’s not a reflection of a disagreement,” she said.