Nevada's Athletic Budget Problems Explained

Bumped to the front page.

As most of you have probably heard by now, there were some rumors flying around about Nevada losing their Division 1 status. This is due predominantly to the state's education budget facing some large cuts proposed by the newly elected Governor, but there are several other factors as well. The proposed cuts also affect UNLV in a big way, but they are in less trouble athletically because, unlike Nevada, they do not have to pay an exit fee to their current conference while moving to a new one. While having to pay that exit fee (around $900,000), Nevada is also forfeiting the money they would normally receive from the WAC (around $1-$1.2 million). The following is a rundown of some of the important factors Nevada is facing while attempting to avoid dropping from D1.

Reports have stated that Nevada is facing a $1.5 million dollar cut to their athletic budget. The easiest way to make cuts from the program is to cut scholarships. The problem with that is if they cut too much, they put their Division 1 eligibility in jeopardy. The requirement for D1 status is that they give out $4 million in scholarships annually. Nevada currently awards $4.6 million, however cutting too close to the $4 million line could pose problems because the scholarships are somewhat fluid. Because of this, they need to stay far enough above that line in order to be safe. The other option would be to cut an entire sport, something Nevada has already done recently in cutting their ski program. Per the article linked above, Nevada is already at the minimum for men's sports at six, however they are one above the minimum of women's sports at eight. Cutting one of the women's sports is an option, but carries Title IX concerns so it's unlikely it will happen. This places Nevada in a tough spot because there are simply not many options for them to pursue.

Chris Murray of RGJ.com posted this blog post detailing how the program might venture to solve their budget problems. This is a quick breakdown of his running of the numbers:

So, each scholarship reduced by Nevada would save the department $23,233. If you are looking to save $400,000, that would mean a reduction of 17 scholarships. The Wolf Pack has 15 teams, which is the equivalent of about one scholarship reduction per team. That's doable.

Add a potential $400,000 in scholarship reductions to the roughly $200,000 the department will receive per year in a recent student fee increase to the $400,000 saved by cutting the ski program and that's a $1 million saving. That's still below the $1.5 million the department would lose in budget cuts.

This leaves the program 1/3 short of their goal. The only way then to make up that difference would be to increase revenue or to increase donations, otherwise they may be forced to dip into the university's endowment (something they should avoid if at all possible).

The easiest way to increase revenue is, of course, ticket sales. Unfortunately the school has had a great deal of trouble doing this. Local support for the sports teams is one of the lowest in the country. Chris Murray takes an extensive look at why this is in this article. Last year the football team did well in bringing in money, but the basketball team did not, even though basketball had been the money-maker for the Pack for quite a few years prior. This might be partly due to a massively failed season ticket re-seating program that Nevada attempted to implement in 2009. Though the plan was eventually abandoned, they lost a large number of season ticket holders in the process. The team struggling this year did not help. Even though the program has done well in keeping ticket prices for all sports at some of the lowest prices in the west, the teams have still drawn poorly.

The downtrodden economy is, of course, another reason that ticket sales have suffered. Another factor is the ESPN deal with the WAC. As we all know, ESPN is good for exposure but not so much for revenue. The Wolf Pack moving to the MWC will help this given the TV deal in the MWC. Chris Murray provided a breakdown of the difference in money the move to the MWC will provide. The following are the estimated increases in revenue the program will experience when they move to the MWC:

" Television: $750,000

" Travel: $550,000

" NCAA Tournament: $345,000

" Conference basketball tournament: $130,000

" Ticket sales: $100,000

" Bowl payouts: $75,000

" The Hawaii trade out: $70,000

" BCS: $60,000

" Bottom line: $2.085 million

Murray notes that these figures may change due to the departures of Utah, BYU, and TCU, so its unclear what the exact number will be. However, the move to the MWC should still provide help for the program in the long run.

As I've stated several time on this blog, I think it is incredibly unlikely that Nevada will drop from D1. First I could see them dipping into the endowment if they had to, or perhaps someone comes in to help the program with some generous donations. The other is that the sports programs, while not drawing well, still impact the Reno/Sparks area's economy in a positive way. In this article from Chris Murray, Murray cites a study that says the Wolf Pack sports programs contributed $18.5 million to the area's economy in the 2009-2010 fiscal year. Because of this alone I doubt the program will be allowed to drop from D1, it is too important to the area's economy.

While the sports programs at Nevada and UNLV are being affected, so are the universities themselves. I have not yet admitted this on here, but I am a student at UNLV and have seen first hand some of the impact that the proposed cuts have had on the school. While the proposed solutions at UNLV have changed numerous times over the past few months (it began with some majors being outright eliminated), the one they are currently considering is instead of eliminating entire majors they will eliminate tenure-track professors within certain programs while also eliminating a number of visiting professors. Eliminating tenure-track professors is something I would rather the university did not do, since that would basically be firing the future professors of the university (and therefore eliminating some of the research contributions of the university).

This is a long-term concern for both universities, because it could have a deep impact on the academic prestige of the schools. Both schools are approaching the problem differently, and the proposal I mentioned is for UNLV (I'm not fully sure how Nevada is approaching it, though I've heard some entire majors could be cut). The legislature is currently in session in Nevada, so both schools are hoping for the governors budget to be reworked, presented to the governor, likely vetoed, and then overturned by the legislature. At this point, both schools are in wait and see mode, and it remains to be seen whether the proposed cuts go through at all.