I linked to this Bloomberg piece the other day. It paints a pretty horrendous picture of the finances of the Cal Berkeley athletic department.
By another measure, Cal sports are in big trouble. After completing the most expensive college football stadium overhaul ever, the Golden Bears now owe more money than any other college sports program. Hobbled by debt service payments, the athletic department ran a $22 million deficit last year and expects to end this fiscal year deep in the red.
A university task force is looking for possible solutions, including reducing the total number of Cal’s sports programs. Any cuts could endanger some of the school’s most successful teams, which cost a lot more than they bring in, and Chancellor Nicholas Dirks recently gave the group more time. “Everything is on the table,” said Robert O’Donnell, a lecturer at Berkeley’s Haas School of Business who co-chairs the task force.
“Everything is on the table” is kind of an ironic sentiment in light of the fact that a scant few days later, the school canned football head coach Sonny Dykes. Of course there’s a hefty buyout of his contract, made even worse than you’d expect because of the kind of dumbassery that’s unsurprising in the college athletics business (yeah, I use the term loosely).
With our intercollegiate athletics department’s typical management finesse, we extended our football coach’s contract about a year ago…and fired him this week. He walks away with about $6m in severance, but that’s OK because we’re just finishing up the zillion-dollar severance payments for the previous coach, and the AD who is now at Penn State, so there’s lots of money just lying around that would otherwise be wasted on fixing classrooms, or scholarships for non-athlete students who just play sports for fun and don’t put any eyeballs on TV commercials.
Add to that the money that will have to be laid out to bring in the next staff, and it’s lather, rinse and repeat time at the ol’ hacienda. Even better, Cal’s athletic director has no time for the Rule of Holes.
… Our objective is long-term financial sustainability for our department. In order to do this, we understand that investing in football is critical. We believe that this change will reinvigorate the program, stimulate lagging ticket sales and renewals, and energize our donor base.
In other words, he has to destroy the athletic budget in order to save it.
What passes for leadership in college athletics shouldn’t be entrusted with running a lemonade stand. But let’s keep insulating these idiots from the free market because… well, do they really need a reason?