maryland report on athletic department debt

7/27/2019 Maryland report on athletic department debt

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REPORTOFTHE

PRESIDENTSCOMMISSIONON

UMDANDBIGTEN/CICINTEGRATION

UniversityofMaryland

CollegePark,Maryland

June30,2013


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REPORTOFTHEPRESIDENTSCOMMISSIONON

UMDANDBIGTEN/CICINTEGRATION

UniversityofMaryland

June2013

Background

Intercollegiateathleticshavealong,storiedhistoryattheUniversityofMaryland(UMD)

thestatesflagshipinstitutionofhigherlearningandapreeminentpublicresearch

university.Since1892,whenrecreationalsportswereformalized,athleticprograms

havemadevaluablecontributionstothecampusandtheStateofMaryland,notonly

providingabasisforpersonalgrowthandpositivecampusspirit,butapointofcontact

foralumni,friends,supporters,andstudents.

Inthefallof2012,theUniversitybegananewchapterinitshistorywhenitwaspresentedwiththeopportunitytojointheBigTenConferenceanditsacademicalliance,

theCommitteeonInstitutionalCooperation(CIC).Aftercarefulexaminationofthe

implicationsandconsultationwithmajorstakeholders,UMDPresidentWallaceLoh

announcedonNovember19,2012,thattheBigTenacceptedUMDsapplicationfor

membershipstartinginacademicyear2014-15.MembershipintheCICwillbeginon

July1,2013.

InhisformalannouncementPresidentLohstatedthatmembershipintheBigTen

ConferenceisinthestrategicinterestoftheUniversityofMaryland.Itwillensurethe

financialvitalityofMarylandAthleticsforyearstocome.PresidentLohwentontopointouttheuniversity-wideadvantagesofjoiningtheBigTen,includingthecapability

toimprovesupportofourstudent-athletesintheclassroomandonthefield.He

furtherstatedthattheextensiveopportunitiesintheCICforcollaborationswithour

peerAssociationofAmericanUniversities(AAU)andflagshipuniversitiesineducation,

research,andinnovationwillboosttheUniversityofMarylandsascendancyin

academicexcellence.

OnDecember6,PresidentLohfollowedupbycreatingtheCommissiononUMDandBig

Ten/CICIntegration,whichwastaskedwithensuringthattheUniversitywasprepared

tocompeteintheconference,aswellastakefulladvantageofthenewopportunities

available.

MembersoftheCommissionwereappointedtorepresentkeyuniversityconstituencies:

BoardofRegents,UniversityofMarylandCollegeParkFoundationBoardofTrustees,

UniversitySenate,AthleticCouncil,UniversityofMarylandAlumniAssociation,


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undergraduateandgraduatestudentgovernment,StudentAthleteAdvisoryCouncil,

faculty,staff,administrators,M-Club,andTerrapinClub.Acompletelistofmembers

canbefoundattheendofthisreport.

ThisreportrepresentsmonthsofcollaborativeworkbytheCommission,andincludes

theresultsofitsfactgatheringandaseriesofrecommendationsdesignedtousherthe

UniversityofMarylandintotheBigTenConferenceandtheCICwithallpossiblesuccess

andbenefits.

TheBigTenConference

Formedin1896,theBigTenConferencehasattainedrecognitionasoneofthe

preeminentathleticconferencesinthenation.Itsmembersworld-classacademic

institutionsdedicatethemselvestothepursuitandattainmentofeducational

excellence.BigTenschoolsstriveforstudentathleticsuccessonthefieldandintheclassroom.

BasedatheadquartersinParkRidge,IL,theconferencemaintainsmorethan60

committees,managesnearly1,000broadcasteventsyearly,provideslegislativeand

complianceservices,operates25differentsportchampionshipsandtournaments,

providessupportservicestomorethan400coachingandadministrativepersonnelon

BigTencampuses,andhandlesmediaandfanservices.Theconferencesponsors

championshipeventsforallitssportsexceptwomensvolleyball.Inmostcases,hosts

aredeterminedthrougharotationamongconferenceschools.

TheBigTenisgovernedbyitsCouncilofPresidentsandChancellors(COP/C),with

supportandadvicefromfacultyrepresentativesandanadministrativecouncil.The

COP/CholdsultimateauthorityandresponsibilityforBigTenConferenceoperations

andpolicy.LegislativeauthorityforconferencerulesisdelegatedtotheFacultyAthletic

Representatives.MatterspertainingtothemanagementoftheConferencesathletic

programsaregovernedbynegotiatedagreements.TheAdministratorsCouncilhas

legislativeauthorityovertheseAgreements.

BigTenMemberInstitutions:

IndianaUniversityHoosiers,Bloomington,IN MichiganStateUniversitySpartans,EastLansing,MI NorthwesternUniversityWildcats,Evanston,IL OhioStateUniversityBuckeyes,Columbus,OH PennsylvaniaStateUniversityNittanyLions,UniversityPark,PA


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PurdueUniversityBoilermakers,WestLafayette,IN UniversityofIllinoisFightingIllini,Champaign-Urbana,IL UniversityofIowaHawkeyes,IowaCity,IA UniversityofMichiganWolverines,AnnArbor,MI

UniversityofMinnesotaGoldenGophers,Minneapolis,MI UniversityofNebraskaCornhuskers,Lincoln,NE UniversityofWisconsinBadgers,Madison,WI UniversityofMarylandTerrapins,CollegePark,MD(asofJuly1,2014) Rutgers,TheStateUniversityofNewJerseyScarletKnights,NewBrunswick,NJ

(asofJuly1,2014)

TheUniversityofMarylandsfullmembershipbenefitswillbegininJuly2014,including

fullvotingrightsandchampionshipeligibility.OnJuly1,2020,UMDwillbecomean

equitypartnerintheBigTenNetwork.

BigTenNetwork(BTN)

LaunchedinAugustof2007,theBigTenNetworkcanreachanestimated80million

householdsthroughagreementswithmorethan300cable,satellite,andtelcoaffiliates

inall50statesandCanada.TheBTNairs24hoursaday,365daysayear.Annuallyit

televisesmorethan350liveevents,andstreamsviatheinternetmorethan400others.

BigTenstudentsproduceandannouncethesestreamedeventsaspartoftheStudentU

initiative.Someofthesewebcastslateraironthetelevisionnetwork,offeringaunique

opportunityforstudentstogainreal-worldtelevisionexperience.Eachcampushastheopportunitytoproduceoriginalprogramminghighlightingqualitiesthatdistinguishthe

university.Additionally,BTN2GoInternationaldigitallydeliversliveandon-demand

programmingtosubscribersoutsidetheU.S.,includingCanadaandselectCaribbean

islands.

CommitteeonInstitutionalCooperation(CIC)

TheCommitteeonInstitutionalCooperationwasestablishedbythepresidentsofthe

BigTenConferencein1958asitsacademiccounterpart.AconsortiumoftheBigTen

memberuniversitiesplustheUniversityofChicago,theCIChashelpedthemadvancetheiracademicmissions,generateuniqueopportunitiesforstudentsandfaculty,and

shareexpertise,campusresources,andinnovativeprograms.Governedandfundedby

theProvostsofthememberuniversities,CICactivitiesarecoordinatedbyastafffromits

Champaign,Illinoisheadquarters.


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CommissionCharge

OperatingwithinthesystemsoftheBigTen,andtakingadvantageofitsmany

opportunities,requiresconsiderableplanningbytheUniversity.TheCommissionwas

createdtoinvestigateandrecommendhowbesttoaccomplishthesegoals.

PresidentLohsspecificchargecallsfortheCommissionto:

PlanstrategicallyandadvisethePresidentonhowwecanmaximizetheadvantagesofmembershipintheBigTenandtheCICtoadvancetheUniversitys

excellenceintheareasof(1)athletics;(2)financeandbusinessadministration;

(3)communications,fundraising,andmarketing;and(4)education,research,and

innovation.

BeguidedbythecommitmentoftheUniversityanditsDepartmentofIntercollegiateAthletics(ICA)tothesuccessofourstudent-athletessothat(a)theyarewellsupportedtosucceedintheirstudiesandcareeraftergraduation,

and(b)theyandeverysponsoredteamhavetheresourcestocompete

successfullyintheBigTenandnationally.

ReviewtheoperationsandfinancesoftheICA,whichisaself-supportingenterprise.Reviewthefinancesofteamseliminatedin2011duetobudget

deficits,andrecommendwhichteams,ifany,shouldbereinstated,andonwhat

timeline.GivenanticipatedrevenuesfromtheBigTen,comeupwithaplanto

ensurethefinancialhealthofMarylandathleticsforatleastthenexttwo

decades.

ArticulatethevaluesandprinciplesthatwillguidetheUniversityinthenexttwodecadesinallocatingsomeoftheBigTenrevenuestosupportUMDsacademic

missionandstudentfinancialaid.

Examinethecurrentfundraisingorganization.RecommendhowtoelevateICAdevelopmenteffortstoprovidebettersupportforUMDsstudent-athletes.

ConsiderhowwecanusetheBigTenNetwork(BTN)totelltheUniversityofMarylandstory,inacademicsandathletics,tothemorethan80million

householdstheBTNreachesintheU.S.andabroad.

ReviewandmakerecommendationsregardingtheopportunitiesprovidedbytheCIC,whichislikeasuperuniversityinitsbroadarrayofofferings.Theseopportunitiesincludeeducation,research,andadministrativeefficiencies.

Performitsworkasconsultativelyaspossible.


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Inresponsetothischargeandtoaccomplishitswork,theCommissioncreatedfour

workgroups:

Athletics FinanceandBusinessAdministration Communications,Fundraising,andMarketing Education,Research,andInnovation(CIC)

Toallowformaximumcommunityparticipationandtobenefitfromtheexpertiseofthe

Marylandcommunity,non-Commissionmemberswereaddedtothegroupsas

appropriate.Acompletelistingoftheworkgroupmembershipisincludedinthe

appendices.

TheCommissionmetsixtimesasawholebetweenJanuary16andJune30,2013.It

heldanopenforumonApril8,2013,toreceiveinputfromtheUniversitycommunity.Approximately250peopleattended.Awebsitewassetuptoreceivecommentsfrom

thecommunity.Workgroupsmetindependentlymorethantwodozentimesduringthis

period.

CommissionRecommendations

Afterreviewingthefourworkgroupreports(includedasappendicestothisreport)and

basedonthebroadinputwehavegathered,theCommissionrecommendsthefollowing

actionstepsandprinciplestoguidetheUniversitythroughitstransitiontotheBigTen.

Takentogether,theserecommendationsreflectthevaluesimplicitinourpresidential

charge:ParticipationintheBigTenConferenceandtheCICrepresentanopportunityto

advancethequalityandreputationoftheUniversityandbetterservestudent-athletes

andtheentirecampuscommunitywhilecreatingsustainablefinancesfortheICA.At

eachstep,wemustactonthesegoalsinafiscallyresponsiblemanner.

TothriveintheBigTenandtheCIC,theCommissionencouragesacampus-wide

commitmenttothefollowinggoals,thegoldstandardthatwehaveimplicitlyembraced

inourrecommendations:

Commitmenttoathleticexcellenceandcompetitiveness; Commitmenttoprovidestudent-athletestheresourcesneededtocompeteat

thehighestlevelonandoffthefield;

CommitmenttoinvestinthefuturefinancialhealthoftheICAattheearliestdatepossiblebybankingresourcesaswellasattendingtoimmediateneeds;


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Commitmenttoleverageathleticsuccessandprominence,aswellasmembershipintheCIC,toadvanceUMDsacademicreputationand

achievements.

Thebasisfortherecommendationscanbefoundintheworkgroupreports.

1. TheMensOutdoorTrackandFieldprogramshouldbefullyrestoredinFY15andgivensufficientresourcestomeetNCAAstandards.

2. Priorityshouldbegiventominimizingmissedclasstimeincreatingteamtravelguidelines.

3. Allstudent-athleteswhoreceivefullboardasacomponentoftheirathleticscholarshipshouldbeprovidedwithmealplansthatoffer21healthymealsper

week.

4. Toprovideforthebroadhealthandacademicneedsofstudent-athletes,staffinglevels,includingacademicsupport,training,nutrition,sportsmedicine,etc.,shouldbeenhancedtobolsterstudentservices.Enhancementsshouldbe

allocatedamongprogramsanddepartmentsinamannerconsistentwithICAs

strategicplan.

5. ThefollowingvaluesandprinciplesshouldbeappliedinallocatingnewrevenuesgeneratedbyBigTenmembership:

Meettheacademicneedsofstudent-athletestoensuretheirachievementandgraduationlevelsarecomparabletothoseofotherBigTeninstitutionsas

wellastonon-athletesatMaryland.

UsenewrevenuesasmatchingfundstospurexternaldonationsforhighimpactinitiativesthatwillenhancethestatureoftheUniversity.Examples

includeneedandmerit-basedscholarships,initiativestopromoteinnovation

andentrepreneurship,andinitiativestoenhanceaccessandstudentsuccess.

6. OnceICAisfinanciallystable,fiftypercent(50%)ofexcessrevenuesshouldbeusedtorepaythedebtitowestotheUniversityfortheloanfromNon-State

AuxiliaryFunds.Theotherfiftypercent(50%)shouldbesetasidetobuildICA

reservesandtomakeadditionalinvestmentsinICA.Annualreviewsshouldbe

conductedofICAfinancialresultscomparingthemwiththeplanforBigTen

integration.

7.StartinginFY15,someICArevenuesshouldbeprovidedtosupporttheacademicenterprise.ThesefundstomeettheUniversitysacademicpriorities

willbephasedinoverthenextnineyearsandareexpectedtoreachatleast

$1Mperyear.

8. Facilitiesneeds,includingpracticefields,anindoorpracticefacility,andaVarsityTeamHouse,shouldbeviewedascapitalexpensesandshouldnotbefinanced

withrevenuesfromtheBigTen.


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9. University-widedevelopmentandalumnirelationsefforts,includingICA,shouldadoptacentrallymanaged,distributedmodelofoperations.University-wide

fundraisingwillbecentrallycoordinatedoutoftheofficeoftheVicePresidentof

UniversityRelations.Further,UMDandICAshouldinvestinaninformation

managementsystemthatprovidessharingofdatabetweentheAdvance/BSR

andPaciolansystems.

10.ICAsfundraisingoperationshouldbeexpandedandtheheadofICAsfundraisinggroupshouldreportdirectlytotheOfficeoftheVicePresidentof

UniversityRelations,withadottedreportinglinetotheDirectorofAthletics.

11.TheVicePresidentofUniversityRelationsshouldworkincollaborationwiththeAthleticDirectortoalignstructurallytheICAfundraisingandfriend-raising

groupsunderthedirectionofUniversityRelationsinordertomaximize

coordination,efficiencyandeffectiveness.

12.Existinguniversity-widevisualidentitystandardsshouldbereaffirmedandenforcedtoprovideaconsistentandprofessionalbrand.Outdatedlogosshouldberemovedfromallathleticfacilitiesandreplacedwithcurrentmarks,priorto

ourBigTendebutinsummer2014.

13.TheUMDlicensingandmerchandisingprogramshouldbeexpandedandrelocatedtotheOfficeofUniversityMarketingandCommunications.

14.ThecategoriesofcorporatesponsorshipsshouldbeexpandedandICAshouldhaveaddedflexibilityinadvertising,consistentwithpracticesintheBigTen.

15.BecauseofthevalueofthemarchingandpepbandsandtheTestudomascotinestablishingteamsupportandspirit,adedicatedandenhancedbudgetin

supportoftheseactivitiesshouldbeestablished.

16.ThecostsandbenefitsofinitiatingticketingforOlympicSportsshouldbealignedwithcommonpracticesatotherBigTenathleticprograms.

17.TheUniversityshouldmaximizewebandbroadcastopportunitiesontheBigTenNetwork(BTN)byproducinghigh-qualityacademic,researchandathletic

programming.

18.TheUniversityanditsfansshoulddoeverythingpossibletohelpfacilitatetheBTNestablishmentofagreementswithlocalandnationalcableandsatellite

televisionproviders.TheseagreementswillensurethatMarylandathleticsis

availabletothemaximumnumberoftelevisionhomes.

19.TheUniversityofMarylandshouldparticipateinCICprojectsandactivitiestothemaximumextentthatresourcesallowbecauseofthebenefitsthis

associationwillaffordourfaculty,staffandstudents.

20.TheUniversityshouldestablishitselfastheCICgatewaytothenationalCapitalregion,whichishometonumerousgovernmentandnon-government

organizations.


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21.TheProvostshouldconsidercreativecollaborationswithCICcolleagues,includingbutnotlimitedtohostingacademicconferences,developingjoint

servicelearningprojects,andcreatingjointresearchprograms.

22.FundingshouldbeprovidedfromcentraluniversityfundstocoverthecostofobligatoryCICcontributions.ThecostofcontributionsforCICoptionalprograms

shouldbepaidbytheunitsbenefittingfromparticipation.

TheCommissionurgesacceptanceoftheserecommendationsbecausewebelievethese

stepswillpromotemechanismsforthesuccessfultransitionoftheUniversityandICAto

theBigTen.Ourstudents,faculty,andstaffwillbenefitinsignificantwaysasoutlinedin

thisreport.

TheCommissionexpressesitssincereappreciationtoAthleticDirectorKevinAnderson,

allthemembersoftheICAstaff,andespeciallytothestudentathletesandcoachesfor

theirthoughtfulcomments,assistance,cooperation,andsupport.

CommissionMembership

Co-Chairs

Mr.BarryP.Gossett

Principal,GossettGroup

Dr.LindaM.Clement

VicePresidentforStudentAffairs

Members

Ms.MarjorieBaker

President,M-Club

Mr.RobertA.Bedingfield

Partner,Ernst&YoungLLP

Mr.DavidColn-Cabrera

President,GraduateStudentGovernment


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Dr.NicholasJ.Hadley

FacultyAthleticRepresentative;Chair,AthleticCouncil

Professor,DepartmentofPhysics

Mr.CliffordM.Kendall

Chairman,VSECorporation

Mr.KerryMcCoy

HeadCoach,Wrestling

Dr.DarryllPines

ProfessorandDean,A.JamesClarkSchoolofEngineering

Mr.ColinPotts

President,TerrapinClub

Mr.MarvinH.Rabovsky

Chair,ExecutiveCommittee,UniversityofMarylandCollegeParkFoundationBoardof

Trustees;President,AlliantCompanies

Dr.MaryAnnRankin

SeniorVicePresidentandProvost

Professor,DepartmentofBiology

Ms.CathyReese HeadCoach,WomensLacrosse

Ms.AnnaRoth

Student-Athlete,CrossCountryandTrack

President,StudentAthleteAdvisoryCouncil

Ms.TimmyF.Ruppersberger

President,UniversityofMarylandAlumniAssociationBoardofGovernors

Mr.HarveyL.Sanders

ImmediatePastChair,UniversityofMarylandCollegeParkFoundationBoardofTrustees


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Dr.MarthaNellSmith

Chair,UniversitySenate

Professor,DepartmentofEnglish

Mr.RobertM.Specter

FormerVicePresidentforAdministration&Finance

Dr.StephenB.Thomas

Professor,SchoolofPublicHealthandDirector,MarylandCenterforHealthEquity

Dr.BonnieThorntonDill

ProfessorandDean,CollegeofArtsandHumanities

Ms.TracyeTurnerVicePresidentandChiefOperatingOfficer

OptimalSolutionsGroup,LLC

Mr.PeterB.Weiler

VicePresidentofUniversityRelations

Ms.SamanthaZwerling

President,StudentGovernmentAssociation


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APPENDIXA:TheAthleticsWorkgroup

Chair:NickHadley,ProfessorofPhysicsandFacultyAthleticRepresentative

Commissionmembers:

MarjorieBaker,President,M-Club CathyReese,HeadCoach,WomensLacrosse HarveySanders,PastChair,UniversityofMarylandCollegeParkFoundation

BoardofTrustees

StephenThomas,ProfessorandDirector,MarylandCenterforHealthEquityAdditionalmembers:

ElaineAnderson,Chair,FamilyScience SarahBauder,AssistantVicePresident,EnrollmentServicesOperations JayGilchrist,Director,CampusRecreationServices BarbaraGill,AssistantVicePresident,UndergraduateAdmissions LandonGreer,ChiefofStaff,StudentGovernmentAssociation EricKasischke,Professor,Geography NanBernsteinRatner,ProfessorandChair,Hearing&SpeechSciences DonnaWiseman,ProfessorandDean,CollegeofEducation LoriEbihara,SeniorAssociateAthleticsDirector/SeniorWomanAdministrator,

ICA

ThefourteenmembersoftheAthleticsWorkgroupbeganmeetinginFebruary2013.

TheworkgroupbeganbyreviewingthechargeandinformationabouttheBigTen,its

memberuniversities,andthesportstheysupport.TheworkgroupthencollectedinformationbymeetingwithICAstaff,teamcoaches,andstudent-athletes.

RyanBowles,AssociateAthleticDirectorforAdministration;ChrisUchacz,Associate

AthleticsDirectorforAcademicSupport&CareerDevelopment;andDarrylConway,

AssistantAthleticsDirectorforSportsMedicinemetwiththeworkgrouptodiscussthe

areasofcompetitiveness,academicsupportandcareerdevelopment,andsports

medicineandstudent-athletewellness.

Theworkgroupalsometindividuallyorhadphoneoremaildiscussionswiththecoaches

ofall20currentteamstolistentotheirthoughtsandconcernsaboutjoiningtheBigTen.

Inaddition,theworkgroupmetwiththemembersoftheStudentAthleteAdvisory

Council,whichiscomposedoftwostudent-athletesfromeachteam,tolistentotheir

thoughtsandconcernsaboutjoiningtheBigTen.


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OnejointmeetingwasheldbetweenthemembersoftheAthleticsWorkgroupandthe

membersoftheFinanceandBusinessAdministrationWorkgrouptodiscusstheissueof

restoringteams.Inordertoassureexcellentcommunicationandcoordinationbetween

thesepanels,theirchairs(BobBedingfield,Finance;NickHadley,Athletics)attendedthe

meetingsofbothworkgroups.

TheAthleticsWorkgroupusedmultiplemethodstocollectquantitativeandqualitative

datatoidentifytheessentialfactorsforallteamstobecompetitiveintheBigTen.In

additiontotheinformationfromcoaches,ICAadministrators,andstudent-athletes,the

workgroupcollectedpublicly-availableinformationonthebudgetsofBigTen

universitiesandthenumberofmenandwomensteamsthattheysponsor.Whilethere

areuniqueissuesassociatedwithspecificsports,therearewidelysharedareasof

concernatUMD.Theseincludebutarenotlimitedto:

ThepotentialnegativeimpactoftheextratimerequiredfortraveltoBigTenschoolsandtheresultingadditionalmissedclasstime. Thelackofcontinuityduetostaffturnover,especiallytheuseoffellowsas

trainers.

Thelackofadequatespaceforbotheffectivetutoringandacademicservices. Thelackofappropriatespaceforsportsmedicinefacilities. Theneedformorepracticefields. Theneedforanindoorpracticefacilitythatcouldserveseveralsports. TheneedforrenovationandupgradestotheVarsityTeamHouse. Theneedforadequatespacetohelpteamscompeteatthehighestlevel,

includingbutnotlimitedto,sufficientlockerspace,meetingroomsandfilm

rooms,andothersportspecificneeds.


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APPENDIXB:BusinessandFinanceWorkgroup

Chair:RobertBedingfield,Partner,Ernst&Young

Commissionmembers:

NickHadley,ProfessorofPhysicsandFacultyAthleticRepresentative CliffordKendall,Chairman,VSECorporation DarryllPines,ProfessorandDean,A.JamesClarkSchoolofEngineering RobertSpecter,FormerVicePresidentforAdministrationandFinance TracyeTurner,VPandCOO,OptimalSolutionsGroup,LLP SamanthaZwerling,President,StudentGovernmentAssociation

Additionalmembers:

FrankAlt,Professor,RobertH.SmithSchoolofBusiness MicheleEastman,AssistantPresidentandChiefofStaff JulieWright,AssistantDean,CollegeofArtsandHumanities KellyMehrtens,DeputyDirectorofAthletics MarvinLewis,AssociateAthleticsDirectorforFinance&Administration

TheworkgroupbeganmeetinginFebruary2013tostudyexistingdataandproject

futurerevenuesandexpenses.Also,wemetjointlywiththeAthleticsWorkgroupand

withmembersoftheStudentAthleteAdvisoryCounciltolearnabouttheneedsof

student-athletesandtheathleticprogramsconsistentwithourchargetorestoreand

maintainbudgetarystability.Throughoutthiswork,thegroupstrivedtoberealistic

andconservativeinitsapproach.

Theguidingprincipleinallouranalyseswas:Tosupportourstudent-athletesinsucha

mannerthattheycanbesuccessfulonthefield,intheclassroom,andinlife.

WecarefullyandsystematicallyexaminedallaspectsofICAsfinances,includingcurrent

andprojectedfuturerevenuestreams,theimpactofservicingICAsdebt(capitaland

operational),andcarefullyreviewedexpenses.Belowarethefindingsandconclusions

oftheBusinessandFinanceWorkgroup.

CurrentState

InitsmostrecentStrategicPlan,ICAarticulatedanunrelentingfocusonitsvisionof

beingthebestintercollegiateathleticsprogramwhileproducinggraduateswhoare

preparedtoserveasleadersinthelocal,state,andglobalcommunities.Thisvisionwill

servetheUniversityofMarylandandallstakeholdersquitewell.Thecurrentfiscalstate

ofICAisassessedbelowasthefirststepintheprocessofprovidingresourcestoachieve

thisvision.


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AconfluenceoffactorsaccountsforthecurrentfiscalstateofICA:

1. Becauseofaseriesofhistoricaleventsanddecisions,ICAhasbeenoperatingatadeficit,andhasnoreserves.Asaresult,ICAborrowedmoneyfromUniversity

Non-StateAuxiliaryFunds.ByJune30,2013,ICAwilloweapproximately$6Mto

theUniversityforthiscumulativeoperatingdeficit.

2. Inadditiontothisdeficit,theACChasbeenwithholdingUMDsconferencesharerevenuesandNCAAstudent-athletesupportfundssincethedecisiontotransition

totheBigTenwasannouncedinNovember2012.Thesefundsrepresenta

significantportionoftheICAsrevenuestream,andthiswithholdinghaswidened

thedeficit.Tocompensate,theUniversity(Non-StateAuxiliary)isloaningICAthe

amountoffundswithheldbytheACC.Thetotaldeficitwillexceed$21Mbythe

endofFY13(June30,2013).Also,iftheACCwithholdsrevenuesforFY14,ICA

wouldneedanadditionalloanfromUniversityNon-StateAuxiliaryfundswhichcouldamounttoanadditional$20M.

3. UMDiscurrentlyinthelowestquartileofspendingperstudent-athletewhencomparedtoourcounterpartsinotherBigTenmemberuniversities.

ExaminingpriorCommissionsprojections

Theworkgroupbeganbystudyingandupdatingfinancialprojectionsfromthe

PresidentsCommissiononIntercollegiateAthletics(2011),whichweredetailedand

substantive.Thispriorcommissionprovidedastrongfoundationfortheworkofthis

group.Still,newimportantvariableshadsurfacedthatrequiredsignificantdollarrevisions.

Thesecenteredonadropinanticipatedmiscellaneousrevenues,footballticketsales,

andfootballguarantees.Forexample,thepriorCommissionincludedrevenue

projectionsforconcertsinComcastbeginninginFY13.However,necessarytechnical

rigging(forlighting,staging,soundsystems,etc.)wasnotinplace,andtheadditional

revenueshavenotmaterialized.Actualfootballticketsalesfellshortofprojections.

Therevenuesandexpendituresassociatedwithfootballguaranteeswererevisedbased

oncurrentschedulingparameters.

ProjectingRevenues

Adetailedreviewofcurrentandpotentialrevenuestreamswasundertaken,including

conferencedistributions,ticketsales,andfundraising.Thesethreestreamsaccountfor


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two-thirdsoftotalICArevenue.Additionally,theworkgroupanalyzedotherrevenue

sources,suchascorporatesponsorships,studentfees,andguarantees.

TofacilitateUMDstransitiontotheBigTen,theconferencedistributionisfront-loaded

andpeggedtoapproximateUMDsprojectedACCrevenuestream.Inyearsevenand

beyond,revenueissettostarttobuild.

Becauserevenueisstaggeredinthisway,theworkgroupusedthestandard,most

appropriatemeansofevaluatingICAfinancialhealthwhataccountantscallthe

accrualmethod.Theideaistoreflectpredictableincomeevenbeforeithasbeen

received.Thiscreatesamoreaccuratefinancialsnapshotunobstructedbythevagaries

ofcashflow.Inthiscase,theaccountingaveragestheincomeevenlyovera12-year

period.

Ticketsalesaredrivenbyfootballandmensbasketball.Thereissome,butnotasignificantamountofopportunitytoincreaseticketsalesinmensbasketball,the

workgroupfound.However,thereisanopportunitytoenhancerevenuethrough

increasedfootballticketsales.Inthecalculations,theworkgroupassumedagradual

increaseinthesaleoffootballtickets.

Toexaminetheopportunityforgrowthinfundraising,thisworkgroupconsultedwith

theCommunications,FundraisingandMarketingpanel.Also,wereliedheavilyonthe

workofthepreviousCommissionregardingfundraisingandmarketinggrowthgoalsand

opportunities

ItshouldbenotedthatMarylandnowfallsinthelowestquartileforrevenuesper

student-athletewhencomparedtoitsBigTenpeers.Inordertosupportourteamsso

theycancompeteatthehighestlevel,theworkgroupbelievesthatstudent-athlete

revenuesneedtobeincreasedtoatleastthemeanvalueoftheotherBigTenschools.

ServicingDebt

ICAsdebtfallsintwocategories.Thefirstisthefixedanddeterminablecapitaldebt

approaching$80MatthecloseofFY13(June30,2013).Thisdebt,theresultofbuilding

ComcastCenter,ByrdStadiumexpansion,andTyserTower,ispaidaccordingtopre-

determinedschedules.Servicingthisdebt,whichamountstoapproximately10%of

totalrevenues,isahighpriorityofICA.

ThesecondtypeofdebtinvolvesmoneyborrowedfromtheUniversity(loanfromNon-

StateAuxiliaryFunds)tocoveroperationalexpenses,approximately$21Mattheclose


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ofFY13.Thisdebtresultedfromhistoricalbudgetdeficiencies,aswellasthegap

createdwhentheACCstoppedpayingMarylanditsshareofconferencerevenuesin

November2012.

Forplanningpurposes,theworkgroupassumedthebudgetgapwouldcontinuetogrow

untiltheICAreachesaprojectedbudgetsurplusinFY18.Asrecommendedbytheprior

PresidentsCommission,ourprojectionsassumedthatassoonastheICAbeginsto

operatewithabalancedbudget,fiftypercent(50%)ofanysurpluswouldbeusedto

servicethedebttotheUniversity.Theotherhalf(50%)wouldbeappliedtobuildICA

reservesandusedtomakeadditionalinvestmentsinICA.

ProjectingExpenses

InestimatingICAexpenses,theworkgroupconsideredcarefullyhowmuchourathletic

programswillhavetospendtocompetesuccessfullyintheBigTen.Thisreviewincludedexpensesrelatedtodebtservice,scholarships,operations,utilitiesand

overhead,student-athletesupportservices,andstaffcompensation/benefits.These

areasaccountforhalfofallprojectedexpenses.Thereisacurrentlackofoperating

fundsforsportsbudgets,requiringtheuseofsport-specificfundraisingtocoverbasic

programneeds(i.e.,apparel,safetyequipment,computersoftware,etc.)

SpendingPriorities

TheyearpriortothetransitiontotheBigTen(FY14)iscritical.Resourcesinthe

followingareaswillbeneededtomaintaincompetitivenessandstability:

AsUMDpreparestoentertheBigTen,ICAshouldpositionitselfforsuccessbyallocatingadditionalsupplies,equipment,andfundstocoverexpensesrelatedto

recruitingefforts.

Allocateadditionalfundstocoveroperatingexpensesthathavereliedonsport-specificfundraisingactivities.Thefreed-upmoneyshouldberedirectedfor

scholarships,supplies,orcapitalneeds.

CompetingintheBigTenwillincreasetheneedforadditionalairtraveltoreplace

somebustrips.Greaterdistances,coupledwithanemphasisonminimizing

missedclasstime,requireICAtoallocateadditionaltravelfunds.

AsdiscussedbythepriorCommissionandtheAthleticsWorkgroup,ICAneedsadditionalstaffinvariousstudent-athletesupportareas.


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Higherthandesiredstaffturnovernegativelyaffectsthestudent-athleteexperience.Werecommendcreationofaretentionpooltoaggregateresources

sotheICAcanbeamorecompetitiveemployer.Ourstudent-athletesdeserve

highqualitystaffmemberswhoaremotivatedtostayoncampus.

ICAhasoperatedwithoutanycontingencyfunds.That,coupledwithitsaccrueddebt,leavestheprogramvulnerable.Accordingly,werecommendadoptinga

soundbusinesspracticeofannuallysettingasidemoneytocoverunexpected

contingencies.

Theworkgroupreviewedfundingathleticscholarships(grant-in-aid)andallowancespermittedunderNCAArules.Wefoundthatnotallstudent-athletes

receivethemaximumallowanceofmeals.Toachieveequityinthisarea,a

budgetaryincreaseofapproximately$1Mannuallywouldberequired.

EvenwhenfactoringtheseincreasesintoICAspending,itisdoubtfulthattheUniversity

willreachthemeanperstudent-athletespendingofourBigTenpeersduringthenext

twelveyears.Weneedtocontinuefocusingonraisingourlevelofinvestmentsothat

ourstudent-athletesandtheICAcancompeteeffectivelyintheBigTen.


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APPENDIXC:TheCommunications,Fundraising,andMarketingWorkgroup

Chair:TimmyRuppersberger,President,UMDAlumniAssociationBoardofGovernors

Commissionmembers:

KerryMcCoy,HeadCoach,Wrestling ColinPotts,President,TerrapinClub AnnaRoth,President,StudentAthleteAdvisoryCouncil PeterWeiler,VicePresidentofUniversityRelations

Additionalmembers:

KarabellePizzigati,PastPresident,TerrapinClub NicolePollard,President-Elect,AlumniAssociationBoardofGovernors GeorgeSolomon,Director,ShirleyPovichCenterforSportsJournalism NatePine,DeputyDirectorofAthletics BrianUllmann,AssistantVPforMarketingandCommunications

TheUniversityofMarylands(UMD)entranceintotheBigTenin2014andthe

CommitteeonInstitutionalCooperation(CIC)inJuly2013provideUMDwithaunique

opportunitytoreview,reevaluate,andrealignitspracticesastheyrelatetoengagement

withalumni,friends,andthegreatercommunity.

WithanoverallgoalofdetermininghowUMDcanbebestpositionedtomaximizethe

experienceofourstudent-athletes,theworkgroupreviewedthefollowing:(1)the

currentfundraisingstructure,particularlyhowtheUniversityworkswithdevelopment

teamsinIntercollegiateAthletics(ICA)andschoolsandcolleges;(2)whereUMDbenchmarksascomparedtootherBigTenmemberschoolsinavarietyofareas,(3)

UMDbranding,marketing,andsponsorshippractices;and(4)trademark,licensing,and

merchandisingpracticesandpolicies.

Throughoutourreview,severalthemesemerged,themostconsistentbeingtheneedto

maximizeresourcesandresultsthroughclosercollaborationamongunits.The

decentralizedmodelcurrentlyinplaceinseveralkeyareasisnotabestpracticemodel.

Oureffortsinfundraising,branding,sponsorships,licensing,andmerchandisingwillbe

betterleveragedwithacoordinatedeffortamongallconstituentgroupsandcentralized

accountability.

AsubsetofourworkgroupmettodiscusstheimpactandfundingoftheUniversitys

marchingbandandmascotcostume.Thesub-panelconcludedthatenhancementsto

bothareessentialfortheUniversitytocompetewithitspeers.Thisincludes

investmentsinnewequipmentandstaff.


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APPENDIXD:Education,Research,andInnovation(CICparticipation)

Chair:MaryAnnRankin,SeniorVicePresidentandProvost

Commissionmembers:

DavidColn-Cabrera,President,GraduateStudentGovernment BonnieThorntonDill,Professor&Dean,CollegeofArtsandHumanities MarvinRabovsky,President,AlliantCompanies MarthaNellSmith,ProfessorandChair,UniversitySenate

Additionalmembers:

CharlesCaramello,AssociateProvostandDean,GraduateSchool SteveFetter,AssociateProvost MarshaGuenzler-Stevens,Director,StampUnionandCampusPrograms MaryHummel,AssistantVicePresidentforStudentAffairs PatrickOShea,VicePresidentforResearch MarySies,AssociateProfessor,AmericanStudies JamesStirling,Director,ProcurementandSupply PatriciaSteele,DeanofLibraries ChristopherUchacz,AssociateAD/Director,AcademicSupport&Career

Development

BrianVoss,VicePresidentandChiefInformationOfficer WilliamWalters,Professor,ChemistryandBiochemistry

TheWorkgrouponEducation,Research,andInnovationmetfourtimesandreviewed

theopportunitiesavailabletotheUniversityasaresultofmembershipinintheCommitteeonInstitutionalCooperation(CIC).

TheacademicaffiliateoftheBigTenConference,theCICincludesallconference

membersandtheUniversityofChicago(whichendedathleticparticipationin1946but

remainsintheacademicconsortium.TheCICadvancestheeducationalandresearch

missionsofitsmemberinstitutionsbysharingexpertiseandcollaboratingoninnovative

programs.TheCICisgovernedbytheprovostsofthememberuniversities,andits

programsarecoordinatedbyastafflocatedinheadquartersonthecampusofthe

UniversityofIllinois.TheCIChasover60committees,programs,projects,andtask

forcesthatareofficiallysanctionedbythemembersandaresupportedbyCICstaff;ithasacomparablenumberofunofficialgroupsandactivitiesthatareorganizedand

supportedonanad-hocbasis.

TheworkgroupbelievesthattheseCICactivitieswilloffersignificantbenefitstothe

University,andthattheywillenhancetheexperiencesofUMDstudents,faculty,and

staff.


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FollowingathoroughassessmentofCICactivitiesoverthecourseofseveralmeetings,

theworkgroupbelievesthatparticipationwillbenefittheUniversitysignificantly,

enhancingexperiencesofUMDsstudents,facultyandstaff.Someexamplesfollow.

TheworkgroupfoundthattheCICisparticularlyactiveintheareasoflibrariesand

informationtechnology(IT),withmorethanadozenactivitiesineacharea.Eachoffers

anopportunitytosharebestpractices,coordinatepolicies,collaborateonspecific

projects,andtakeadvantageofjointlicensingopportunities.CIClibraryinitiativeswill

significantlyexpandstudentandfacultyaccesstoelectronicandprintbooksand

journals.ITinitiativessupportcollaborativeresearchandensurethatlibraryandother

resourcescanbeeasilyandsecurelysharedacrosstheCIC.

TheCICCourseShareprogramallowsstudentstotakespecializedcoursesofferedat

otherCICinstitutionsfromadistance,andtoregisterforthesecoursesatthesametimeandinthesamewayasregularcourses.Currently,mostsharedcoursesareinless-

commonly-taughtforeignlanguages,suchasPashtoandUzbek.

TheTravelingScholarProgramallowsdoctoralstudentstospenduptoafullacademic

yearatanotherCICinstitution,takingspecializedcoursesandusingresearchfacilities

andotherresourcesnotavailableontheirhomecampuses.TheCICalsosponsorsa

numberofactivitiestoadvancegraduatestudyandcareeropportunitiesfor

underrepresentedminorities,includingtheSummerResearchOpportunitiesProgram;a

programtowaivegraduateschoolapplicationfees;andtheCICDoctoralDirectory.

TheCIChasactivitiestoincreasestudentaccesstointernationalexperiences,to

establishglobalresearchpartnerships,andtoincreaseinternationalopportunitiesforfaculty,

enhancingtheirabilitytointegrateaglobalperspectiveintocoursework.

TheCICalsooffersprofessionaldevelopmentopportunitiesforcurrentandfuture

universityleaders.Theyear-longAcademicLeadershipProgramdevelopstheleadership

andmanagerialskillsoffacultywhohavedemonstratedexceptionalabilityandpromise

asadministrativeleaders.TheDepartmentExecutiveOfficerSeminarsbringtogether

about50departmentchairsfromCICuniversitiesforauniquethree-dayleadership

developmentprogram.

TheworkgroupalsoconsideredwhatdistinctivecontributionstheUniversityof

MarylandmightoffertootherCICinstitutions--inwhatareaswemightplaya

leadershiprole,andpossiblenewcollaborativeactivities.Theworkgroupnotedthatthe

UniversityisuniquelypositionedtoserveastheCICgatewaytothenationalcapital


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region,whichishometomanyfederalresearchfacilities,includingtheNational

InstitutesofHealth,theNationalInstituteofStandardsandTechnology,NASAs

GoddardSpaceFlightCenter,NOAAsCenterforWeatherandClimatePrediction,the

NationalArchives,LibraryofCongress,andtheSmithsonianInstitution,aswellas

numerousothergovernment,nongovernment,andinternationalorganizations.

ThecostsassociatedwithCICmembershipincludeobligatorycontributions,

contributionsforparticipationinoptionalprograms,travelcosts,andotherexpenses.

TotalCICcontributionsaveraged$1.5millionperinstitutionin2012-13.Full

participationinCICmeetingsandoptionalprogramswouldinvolvetraveltoChicagoand

otherCICinstitutions,atatotalcostofabout$100,000peryear.Althoughnoadditional

staffwillberequiredtoparticipateinCICprograms,therewillbeotherinitialand

ongoingadditionalcosts,suchason-campusactivitiesforfacultyinCICprofessional

developmentprograms.Weanticipatetotalexpendituresofabout$1.7millionper

year.

Althoughjointlicensingandpurchasingagreementsmayreducecertaincostsoverthe

longterm,theworkgroupdoesnotanticipaterealizinganyimmediatesavingsthatcould

beusedtooffsetthecostsidentifiedabove.Forexample,Librarieshaveexisting

licensesforsomeresourcesandmustwaituntiltheselicensesexpiretogainwhatever

costsavingsmaybepossiblethroughtheCICconsortium.TheUniversitycurrentlyhas

nolicenseformanyoftheresourcesavailablethroughtheCIC;participationwillallow

theUniversitytoacquiretheseresourcesatalowercostthanotherwisewouldbe

possible,butitwillnotrealizeacostsavingscomparedtocurrentexpenditures.

Togiveanotherexample,althoughconnectiontotheCICOmniPoPfiberopticnetwork

mightreducethecostofexchanginglargeamountsofdatawithresearchersatotherCIC

institutions,andtherebyspurcollaboration,establishinglinkagestothehubinChicago

wouldentailsignificantstart-upcosts($250,000and$1millionperyear).Further,UMD

mayhavealreadyrealizedpotentialsavingswhenithookedintoaregionalmid-Atlantic

hub.


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CICadministrativeopportunitiesandbusinesscollaborations

In1998,CICformedaPurchasingConsortiumforcommoditiesandservices.Byjoining

forces,purchasingdirectorsfrommemberuniversitiesareabletonegotiatebetter

termsandgainsignificantpriceadvantagesonproductswithrelativelyhighmargins.To

date,CICinstitutionshavesavednearly$20million.Examplesincludea45percentcost

reductionontheCiscoroutersusedineveryuniversity.InFY2011,savingsaveraged

about$600,000perinstitution,withfourCICinstitutionseachsavingover$1.3million

peryear.ThePurchasingConsortiumrecentlyexpandedintoservicessuchascarrental

servicesandbackgroundchecksforemployees.Althoughweanticipatethatthe

PurchasingConsortiummayproducesignificantsavingsfortheUniversityofMaryland,

anaccurateevaluationoftheopportunitieswillbepossibleonlyaftertheUniversityisa

CICmember.UMDcurrentlytakesadvantageofUniversitySystemofMaryland

purchasingagreementsforsomegoodsandservices;insuchcaseswewillhaveto

considercarefullytheimpactonotherUSMinstitutionsofusingtheCICPurchasingConsortium.

maryland report on athletic department debt

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