Orsini defends sports budget

Says athletic changes could bring profits

By Andres Healy

Many members of the UCF community have expressed outrage that the university is spending millions of dollars on major athletic changes during the same budget crunch period that has compelled UCF to limit classes, trim back student services like the Writing Center, and fight teachers for their paychecks.

Yet, according to UCF Athletic Director Steve Orsini, that's apples and oranges.

"When you read that we pay $2 million to transfer to Conference USA and $400,000 to transfer out of the [Mid-Atlantic Conference], that money is coming from sources generated from the athletic department," Orsini said. "We don't take a dime from the money that is used to fund classes, pay teachers, or pay for any other academic functions.

"It is illegal for auxiliary units to use state funds," Orsini continued, "so it would be impossible for the athletics department to dip into the pool of money used for academics."

Still, according to Jim Gilkeson, an associate professor of finance, athletics does take money from students that could be used elsewhere.

"It is my understanding that, although it is a 'revenue' sport, the UCF football program remains a net user of resources," he said. "Of course this is somewhat hidden, or off-budget, because of the way sports are funded at UCF, through the per-credit-hour surcharge, or tax on students."

Orsini explained that the money used to fund athletics is raised via the student athletic fee, private donors, ticket sales, corporate sponsors and conference revenue. The athletic fee, currently $11.09 per credit hour, provides the most money for sports and became the third-highest student athletic fee charged by a Florida university when it was approved in November 2002.

During the fall semester alone, that fee generated more than $4.95 million for the athletic department, based on the preliminary total of 446,411 student credit hours reported by UCF's Office of Institutional Research as funded during the fall 2003 term.

Yet, according to Orsini, not only is "the conference change and hiring of a nationally recognized coach huge for [UCF's athletic] program," but both moves will bring in substantial additional revenues themselves.

"In Conference USA, we will net anywhere from $750,000 to $1 million a year," Orsini said. "In MAC, we lost a net of $80,000 a year."

He added that a substantial increase in television revenues will make up a great part of the profit jump. The revenues will be generated by a boost in televised coverage of games caused by the conference change.

"Currently, all teams [in Conference USA] receive a base amount of the total money the conference earns in television revenue and can get additional money if they earn additional television coverage, like from a bowl appearance or trip to the NCAA's Sweet Sixteen," Orsini said.

"The revenue-sharing plan changes on a year-to-year basis," he added, "and we will meet in mid-January to negotiate the next plan."

Even so, Richard Crepeau, a sports historian and professor of history at UCF, said there are many variables that cannot be predicted.

"Most serious of these [variables] are what will happen to bowl commitments and television revenue after the conference changes have been completed," he said. "These are the two biggest revenue producers for the conference."

He added, "If you calculate and project on the basis of current conditions in these two categories, the chances of breaking even are probably fairly good. However ... it is unpredictable. The best-case scenario supports Orsini's argument, but the best-case scenario has a way of failing to materialize when projecting budgets, and in this current case, it is very unlikely that conditions will hold."

Still, the athletic department expects newly hired football coach George O'Leary's presence will help fill the seats at the Citrus Bowl, which they project could bring in at least an extra $1 million in annual revenue.

"If we build up our fan base by 10,000 people a game, which we had when Daunte Culpepper was on the team, and you multiply that by our five home games, that's 50,000 more tickets sold," Orsini said. "That revenue would be in addition to the six-figure increase in corporate sponsorships that we are expecting."

However, doubts remain that increased revenues will make up for the additional cost of hiring O'Leary and buying out the remainder of Mike Kruczek's five-year contract, which will cost roughly $849,000.

"In my view, [O'Leary is] the wrong man in the wrong place at the wrong time," Crepeau commented. "George O'Leary was hired to the tune of $700,000 per year - $850,000 with incentives - an increase of over a half-million dollars on the salary of the previous coach. All this happened without [him] ever setting foot on the campus until the news conference."

Orsini feels differently. "We have made an investment in this staff to see a future return," he said. "We have previously only been selling 20,000 seats per game, yet we can seat over 60,000. We expect to see an immediate positive reaction to George's presence."

The athletic director also dismissed claims that the athletic department solicits donations that otherwise could be used to fund academic functions, adding that donors often specify where they want their donation to go and that academics gets far more donations than athletics.

"If a donor wants to support athletics, you don't want to assume that they would donate elsewhere if athletics wasn't there," he explained. "They might simply decide to not donate at all or might donate to a specific college that doesn't have a great need."

"We are focusing on elevating all of our sports programs," Orsini said. "Our goal is to see all of our teams playing on the national level. It is my personal hope that one day down the line, UCF athletics will be so successful that it will be able to help pay for academics. That would be wonderful."