Can Fresno State keep up?
Fresno Bee 3/25/07
After rising nearly 31% from fiscal years 2001 through 2004, the program's revenue has stopped growing, averaging increases of less than 1% annually over the past three years.
The Bulldog Foundation, a booster group that raises more than a third of the program's operating revenue, has struggled, too. Revenue growth was essentially flat from 1999 through 2005, then jumped about 10% last year.
This year's growth expectation: a tepid 1.3%.
Yet the pressure to spend to stay competitive in major-college athletics is as relentless as ever. Western Athletic Conference rival Boise State, for example, expects 4% revenue growth this year not counting its multimillion-dollar payday from this year's Fiesta Bowl football game.
Fresno State athletic director Thomas Boeh says the program can't go on this way. "Revenues are going to have to go up at some point in time," he says.
Can Fresno State, whose athletic program has traveled an immense distance in a relatively short time, find a way to renew its quest for national glory?
Or should this dream, almost taken for granted since the football team moved into Bulldog Stadium in 1980, be scaled back to meet a new fiscal reality?
These questions are much on the minds of top policymakers.
Boeh plans to unveil this summer a new strategic plan for his department.
Fresno State President John Welty has appointed a commission of university and community leaders to explore an overhaul of athletics' finances, with a preliminary report due in June.
Bulldog Foundation Annual Fund president John Wallace is pushing the 57-year-old booster organization to raise a record amount of money and expand its membership throughout the San Joaquin Valley.
And WAC commissioner Karl Benson expects to meet with Welty and Boeh on campus in early April to discuss revenue-growth benchmarks and other goals in the WAC's new five-year strategic plan.
The Bulldog Foundation's challenges explain only part of Fresno State's flat financial picture.
Other reasons include:
The Bulldogs play in a conference with no automatic berth in the lucrative Bowl Championship Series football bowl series. The conference also lacks a lucrative TV contract, unlike high-profile conferences such as the Pac-10.
Only about one-seventh of athletics' budget comes from the state, and university officials see little chance of more taxpayer help.
About two-thirds of ticket revenue comes from football. But there's little opportunity for revenue growth because home crowds at Bulldog Stadium already average about 95% of capacity. And raising ticket prices is hard because of the central San Joaquin Valley's generally modest income levels.
Few dispute the need for more money if Fresno State is to continue pursuing its dream of big-time athletics renown.
There's inflation and ever-escalating scholarship costs. Intercollegiate athletics now pays chief executive-level salaries to many coaches. And top recruits often go to programs with the best facilities.
Fresno State's projected $22.9 million budget in fiscal year 2006-2007 is the WAC's largest. But the university says revenues (and expenditures) are running behind projections.
Easy answers to the Bulldogs' money woes? There are none.
Penny-pinching is often mentioned, and some sports have already been cut. There's hope the Internet will allow greater efficiency and create new marketing opportunities.
Everyone hopes the football team bounces back. Walk-up ticket sales at the last two home games fell about $200,000 short of expectations, but because the team went 4-8 the coaches weren't paid bonuses.
And Fresno State officials are hopeful about several efforts to attract large donations.
The Green V Society is for donors giving $10,000 or more per year. Donors to the "First Team" program fund scholarships for starting positions in football, men's and women's basketball and volleyball. Another program encourages growers to contribute bales of cotton, which are sold to benefit athletics.
But it's too early to tell whether these three ideas will catch fire. University officials hope to raise about $2.3 million this fiscal year; about $1.1 million had been raised as of early March.
And adding to athletics' money woes is a budding civil war. The university is consolidating its control of booster groups, and many boosters resent what they see as a loss of independence and influence.
What's clear is that the decades-long ascent of Bulldogs' finances has stopped.
Wallace sums up the mood among those who care about the Bulldogs' future: "It's a watershed time."
Welty says the next three to eight years "will be very important for the future of Fresno State athletics."
Benson says the Bulldogs' program has no choice but to invigorate its money-making machine -- because "our competitors are growing all around us."
Pressure will only grow
Without a doubt, the Bulldogs are one of intercollegiate athletics' success stories.
Think back 30 years.
There was no Bulldog Stadium, no Bulldog Diamond, no Save Mart Center.
There were no Top 25 football rankings for Fresno State, no NCAA championship softball team, no national TV coverage in any sport.
All this became reality due in large part to community -- make that regional -- sacrifice.
But this success only highlights how much further Fresno State must travel to be comparable to major-conference schools such as Oregon State and Colorado, two of seven programs that the WAC strategic plan sets as yardsticks by which Fresno State is to compare itself.
The athletics budgets at Oregon State ($36.1 million in fiscal year 2004-2005) and Colorado ($36.6 million in 2004-2005) are about two-thirds larger than Fresno State's.
The WAC strategic plan, completed last year and endorsed by chief executives at each of the nine member schools, declares in frank terms that the conference's success depends in part on revenue growth.
But in the race for revenue, Fresno State finds itself falling further behind the big-time programs it hopes to catch.
The NCAA released a report two years ago that found that schools playing Division 1-A football saw overall revenue grow about 17% in fiscal years 2001 through 2003. In the same period, Fresno State's revenue grew 8%.
In a study of conferences for fiscal years 1997 through 2002, the NCAA found that revenue for programs in the Big 12 grew an average of 72.4% during those six years. In the Pac-10, the average was 54.7%. In the same period, Fresno State's revenues grew 24.1%, less than half of the WAC's average.
A 2005 report commissioned by the NCAA found no clear connection between spending on football and basketball and winning.
Then someone like Boone Pickens comes along.
The oilman gave $165 million to Oklahoma State athletics in 2006, and suddenly the studies became irrelevant to a hundred years of college athletics reality: Money counts.
No one at Fresno State is hinting at major philosophical changes, such as de-emphasizing athletics or abandoning the university's football ambitions so aptly captured in coach Pat Hill's vow to play "anyone, anywhere, anytime."
Yet the Bulldog Foundation's Wallace says Fresno State's financial challenges may force the program's hand: "Maybe we reach a point where we say, 'You know, we don't want to keep up with the Joneses.' "
And veteran Bulldogs fans know that a weak financial foundation can overwhelm a school's dreams. Long Beach State, Cal State Fullerton and University of the Pacific -- conference rivals of Fresno State only two decades ago -- dropped their football programs in the 1990s because revenues couldn't keep up with costs.
Bill Shumard, Fullerton's athletics director when it dropped football, says financial pressure on the Fresno States, Boise States and Nevadas -- schools with Division I-A football programs in non-Bowl Championship Series conferences -- will only grow.
"There continues to be an extremely wide gap between the haves and have-nots," says Shumard, now chief executive of Special Olympics Southern California, and previously athletic director at Long Beach State.
"The bottom line is you have to generate the revenue."
Meeting the challenge
Each plan at Fresno State figures to tackle a part of the challenge.
Boeh, who came to Fresno State from Ohio University in mid-2005, says his plan will deal with basics: budgeting, staffing, priorities.
No more rosy revenue guesses when building a budget, Boeh vows. He promises conservative estimates so there's less chance of year-end surprises.
Budget surprises used to be the norm at Fresno State. From fiscal years 1997 through 2005, Bulldogs athletics spent nearly $6.7 million more than it took in. The program was bailed out in part by the Bulldog Foundation.
University officials tout their stricter policies, noting that the 2005-2006 budget was balanced and this year's is on track for a $202,000 surplus.
Yet both would be in the red if planned payments to rebuild the reserve and repay a portion of a budget loan are factored in. This year's budget also was blessed with a $300,000 payout from Boise State's unexpected appearance against Oklahoma in a BCS football game.
Boeh says he must prioritize dozens of proposed capital projects, and find a way to pay for them. They include renovation of the North Gym into a first-class practice facility and replacing Bulldog Stadium's grass surface with artificial turf.
Expansion of Bulldog Stadium also is "on the list," Boeh says. "It's not on the top, it's not on the bottom."
Hill has long championed expanding the stadium's 41,031-seat capacity, suggesting a bump to 70,000 several years ago. Boeh says the 50,000 range is more practicable.
And what about Hill's compensation package? It totaled $1.23 million -- including outside income from deals such as TV and radio programs, benefits and deferred compensation -- in fiscal year 2004-2005, according to Fresno State Athletic Corp. documents.
According to Boeh, Hill's compensation was slightly under $1.1 million in 2005-2006 and is projected to be slightly under $1 million in 2006-2007.
Boeh says Hill's compensation is in line with other Division 1-A coaches with similar résumés. Hill, in his 10th year at Fresno State, led the Bulldogs to consecutive bowls from 1999 through 2005. He is the highest-paid coach in the WAC, according to a USA Today survey through November 2006.
Hill says the pay scale of Division I-A coaches is driven by market forces: "I'm not saying that's right or wrong. It's just what has happened in our industry."
Says Welty: "We're probably at the high end of what we can afford to pay a football coach."
Another worry for Boeh: Revenues in this year's projected $22.9 million budget are expected to grow an anemic 1.9%. Department salaries and benefits, on the other hand, are expected to grow 4%.
"Over a period of years, you can't continue to have a 2% increase in revenue and a 4% increase in personnel costs," Boeh says.
The WAC strategic plan encourages member schools to boost revenues at least 4% a year as they try to catch midlevel programs in higher-profile conferences.
More ominously, WAC rival Boise State, with an annual budget of about $17 million, expects revenues to grow at twice Fresno State's pace -- and that doesn't include the $3 million-plus that the university expects to make after expenses from the Fiesta Bowl. This financial contrast could widen the gap between a Broncos program that has become the WAC's national star and a Bulldogs program that once thought it would fill that role.
"Two-percent growth is just keeping up with basic inflation," says Boise State athletic director Gene Bleymaier.
Making sacrifices
To cut costs, Boeh has curtailed out-of-state recruiting and limited long-distance road trips for some sports.
Many cuts have added anger to an already stressful situation. For example, the university suddenly killed wrestling last summer, in part to save its approximately $76,000 in operating expenses.
Former wrestling coach Dennis DeLiddo calls any suggestion that balancing the budget depended partly on wrestling's few thousands of dollars "a bunch of bull."
Softball, one of the school's most successful programs for decades, has to cut nearly 2% in operating expenses this year. It is not the only sport facing projected cuts.
Softball coach Margie Wright says she understands the need to tighten belts in tough times: "My only hope is that everyone is sacrificing the same amount."
The pain probably is far from over. Fixing Fresno State's budget woes could take three to four years, Boeh says.
Much will depend on the Bulldog Foundation. Executive director Pat Ogle says annual membership renewals were mailed recently. A four-week drive begins April 19, during which volunteers will recruit new members and lobby those who decided not to renew.
Foundation and university officials emphasize they no longer use "goal" when discussing the drive's efforts. Their preferred word is "hope." The hope this year is $8 million: about $4 million in donations for scholarships, about $4 million in ticket sales that help fund daily operations.
Peter Smits, vice president for university advancement, told the Fresno State Athletic Corp. board on March 7 that the university may need $4.3 million to fund all of next year's scholarships.
Near-flat revenue growth isn't the Bulldog Foundation's only challenge. Membership is now about 5,000, down from about 6,000 in 2002.
Both stem in part from member outrage over past upheavals in the men's basketball program, including NCAA rules infractions under the reigns of former coaches Jerry Tarkanian and Ray Lopes and the 2004 murder of Rene Shannon Abbott by former men's basketball player Terry Pettis.
This only puts more pressure on Wallace, morning news show anchorman at KGPE, Channel 47. He began reporting sports on Fresno radio in the late 1960s, and his daughter, Cassandra, is married to San Francisco 49ers quarterback Trent Dilfer, a former Fresno State standout.
Wallace says the foundation wants to expand its membership among women, young people and fans from the Valley's diverse ethnic groups. One idea: Receptions at Bulldogs games so foundation members can explain their organization, Wallace says.
"As closely as possible, we have to make sure we reflect the fabric of the community," Wallace says.
Even if membership grows, Wallace says, foundation generosity has its limits.
"We'll help [Fresno State] as much as we possibly can within reason," he says. "But don't think that we can be the end-all, be-all bailout."
Structural overhaul
The Welty-appointed commission on finances could hold the key to Fresno State athletics' future.
University officials recognized several years ago that the program needed a structural overhaul. They hired Greg Walaitis as associate athletic director in charge of fundraising, redefined the role of booster groups for specific sports and (with cooperation of the group's top officials) restructured the Bulldog Foundation to bring it more under the university's control.
Some longtime foundation members question this concentration of power in the university's hands and loss of their group's independence.
"The feeling is [university officials] are squeezing the old guys out," says Jim Winton, a former foundation president and a member for more than 40 years.
Smits, who oversees fundraising, says a few foundation members "are reacting to change." He says the university has no intention of "leaving the stakeholders in the dust."
Part of the commission's charge is to create a blueprint for these changes already set in motion.
The commission also must find a way to reconcile a conflict at the heart of Bulldogs athletics.
On one hand, the commission is inspired by a recent NCAA national report Welty helped write -- "The Second-Century Imperatives" -- that calls for stronger presidential control of a university's athletics program.
On the other hand, only about 15% of the Bulldogs' annual budget comes from the state.
The rest comes in various forms from a public that, according to Winton and others, is being asked to give more and talk less.
Can Fresno State increase its authority over athletics at the same time it puts more responsibility for funding on supporters who worry they have less influence on the program's direction?
Commission members are aware of this dilemma and are debating whether to hold public hearings about the future of Bulldogs finances.
"We haven't decided yet," says Athletic Corp. board chairman and commission member Paul Oliaro.
One thing is certain, Welty says. Without moderation in intercollegiate athletics' race for money, "there will be a crisis."
Could the university's students be called on to help? It wouldn't be the first time.
In 1999, students by better than a 4-to-1 margin voted to raise student fees to help fund sports and services such as financial aid.
Earlier this month, several Fresno State students advised caution.
Laurie Patterson, a junior majoring in political science and history, says administrators may do as they please with sports "as long as they don't take money from academics."
Sophomore Swentrol Harvey, an undeclared major, says campus officials shouldn't look to the student body if they can't solve athletics' problems: "When everything goes topsy-turvy, it's their fault, not the students'."