New Mexico State got paid $1.7 million for playing a football game at Alabama this past season. Arkansas State picked up $1.8 million for playing at Georgia. California will receive $1.9 million for playing at Notre Dame in 2022.
The difference is that Cal is a Power Five conference school – the kind that presumably has the wherewithal to say thanks-but-no-thanks to any one-game agreement that involves visiting a powerhouse’s home stadium.
That’s not what Cal has. Instead it has is major financial problems, and a relatively new athletics director and campus chancellor, both of whom are trying to also juggle an array of 30 varsity teams playing on some of the most expensive real estate in the country.
Against this backdrop, Cal last week announced the deal with Notre Dame, with the financial details included in the game contract. It won’t be the first time a Power Five school has made such a deal with another Power Five school. It won’t even be a first for a Pac-12 Conference school. Oregon State collected $1.7 million for a game in 2018 at Ohio State. But in an annual universe of hundreds of non-conference football games involving payments totaling well over $150 million, Power Five schools rarely play one-off games against a peer anywhere other than a neutral site.
“To play Notre Dame is a unique opportunity … two years out, (Cal fans) will be planning this trip and really getting excited about it,” Cal athletics director Jim Knowlton told USA TODAY Sports. “Our budget is not reliant on that (game guarantee). Our budget is based on other things for revenue generation. If someone were to say to me ‘Does $1.9 million help?’ yes, of course it does. But we’re really building our schedule around home and home” series.
And the money from Notre Dame won’t come close to bridging revenue shortfalls that have resulted in Cal’s general fund having had to pump close to $110 million into the athletics program over the past five years, according to Cal’s campus accounting system and data compiled by USA TODAY Sports in partnership with Syracuse University’s S.I. Newhouse School of Public Communications.
Among Power Five public schools, that’s one the greatest totals for this time frame, with Rutgers leading at just over $142 million from student fees and institutional support.
Cal’s total includesjust over $24 million during the 2019 fiscal year, according to the school’s new financial report to the NCAA that Cal provided two weeks ago in response to an open-records request.
This new amount is even with Chancellor Carol Christ having decided that, beginning with fiscal 2019, the athletics department would be relieved of about $9 million in annual debt service associated with the seismic retrofitting of Cal’s Memorial Stadium nine years ago. Christ said she viewed the retrofit as a campus responsibility. The athletics department remains responsible for around $200 million in debt on other stadium enhancements and a new training center built as another part of the project.
But the athletics department is benefiting from athletics-specific endowments worth a total of nearly $230 million, one of the largest such endowment pools held by any public school. Some of those endowments annually help pay for the baseball, rugby, men’s and women’s gymnastics and women’s lacrosse teams, all of which were scheduled to be cut 10 years ago, but reinstated after specific fundraising efforts.
Making all of this particularly galling to Cal’s faculty was that, on the surface, the university appeared to have been providing only about $5 million a year to the athletics department. That was exactly the funding level university leaders had promised following faculty outrage about 10 years ago when annual funding reached more than $12 million.
However, beginning in fiscal 2015, the athletics department began running annual operational deficits — $8.5 million, followed by nearly $22 million, $16 million and $19.3 million.
Christ and Knowlton now say those deficits weren’t treated as accumulated debt, to be repaid by the athletics department at some point. They were simply covered by the university.
This stands in contrast to the situation at the University of California System’s other Pac-12 school, UCLA. After years of balanced budgets helped by student fees and school support of less than $3 million a year, UCLA reported an annual operating deficit of nearly $19 million for the 2019 fiscal year.
The San Jose Mercury News – which first reported UCLA’s new figures – also has reported that the deficit will be covered by an interest-bearing loan from the campus’ central fund.
At Cal, the goal now revolves around a six-year plan to gradually reduce university’s annual support of the athletics department to $13.3 million for the 2025 fiscal year. “That level of support is, in my estimation, both sustainable and fully commensurate with the value Cal Athletics brings to the campus and its community,” Christ wrote in her letter that appears in the winter edition of Cal’s alumni magazine.
Knowlton calls the goal both “achievable and challenging,” and says it accommodates Cal maintaining its current roster of teams.
Knowlton says Cal’s plans for increasing revenue will involve further endowment fundraising efforts tied into a university-wide $6 billion campaign set to begin in public on Feb. 29.The university said in its statement to USA TODAY Sports this week that the athletics department’s “working goal” in conjunction with the campaign will be more than $300 million.
Knowlton said other revenue efforts will involve trying to increase attendance (it’s had a 90% percent football season-ticket renewal rate); anticipated increases in money from the Pac-12 when its TV deals end in 2024; and the sales of naming rights for the football field and stadium.
“I think the combination of all of those things is going to help us be able to reduce the amount of institutional support that we’re going to need,” Knowlton said.