The University of Montana Athletics Department budget is projected to be smaller in the 2018 fiscal year even as the institutional support it receives is estimated to increase.
According to a state budget report, total athletics expenses are estimated to go from $21.1 million last fiscal year to $19.6 million this 2018 fiscal year.
At the same time, direct institutional support is going from $6.26 million to a projected $6.69 million the current fiscal year, according to a finance report from the Montana University System. The amount for the current year is an estimate. UM's athletics program is by far the least subsidized in the Big Sky conference.
The UM athletics program receives institutional support for both waivers and salaries. Waivers are like coupons for tuition, whereas scholarships are generally considered actual dollars raised by a foundation or other party.
Last month, UM President Seth Bodnar released a draft proposal to address an ongoing enrollment drop at the campus and $10 million deficit. Recommendations include program reorganizations and faculty reductions of 51.5 full time equivalents (FTEs), including steep departmental cuts in English and Modern and Classical Languages and Literature.
The proposal does not discuss the Athletics Department, but last week, athletics director Kent Haslam and associate director Ryan Martin answered questions about how the financial decline at UM has affected their area.
"Our mission in athletics is to be as self-sufficient as we possibly can," Haslam said. "And we feel the same pain that everyone feels across campus.
"But we're going to stay optimistic, and we're going to stay positive, and we're going to do all we can to generate as much revenue as we can."
Athletics Department revenue comes from a variety of sources.
The largest chunk comes from direct institutional support estimated at $6.69 million for the current fiscal year. Other sizable sources are ticket sales estimated at $5.2 million, student fees at $1.35 million, and royalties and related income at $2 million.
Private donations through the UM Foundation and Grizzly Scholarship Association also contribute to revenue, and income varies depending on the year. For instance, in 2017, the Athletics Department counted $9.4 million in contributions with the push for the Washington-Grizzly Champions Center, and in the current fiscal year, those contributions are at $1.5 million.
The department's funds pay for aid to student athletes, coaching and support staff salaries and benefits, administrative expenses, recruitment, and travel and sporting equipment, among other items.
By comparison, Montana State University in Bozeman is projecting its expenses to be $21.2 million this fiscal year up from $20.8 million last year.
The bulk of its revenue also comes from direct institutional support at some $8.6 million. Ticket sales will contribute an estimated $2.9 million, student fees will bring in a projected $2 million, and media rights provide $1.3 million.
As the largest campuses, UM and MSU received the majority of the $23 million in direct institutional support for the Montana University System in the 2017 fiscal year.
With state contributions and foundation dollars, the Montana University System provided $43.8 million in all waivers and scholarships, and athletes received $15.1 million of that, according to system budget reports.
All told, the system counted 1,758 student athletes during the 2016-17 school year, according to a state report. The same report notes athletes have higher graduation rates and grade point averages than the general student population at both UM and MSU.
For the entire system, the other largest sources of revenue for athletics were donor contributions of $15 million from individuals, associations and corporations; ticket sales of some $8.6 million; and student athletic fees of $4 million, according to a state memo on the 2017 fiscal year.
"MUS total athletic spending ... represented 4.54 percent of the combined expenses (all funds) at campuses offering athletics," said the memo.
"MUS direct institutional support of athletics, which includes the value of athletic student aid and state appropriations, represented 4.66 percent of combined expenses within the current unrestricted funds for the campuses with athletic programs."
UM's athletics program is subsidized far less than any school in the Big Sky Conference at 34 percent, according to the most recent NCAA data compiled by USA Today. Sacramento State University, by comparison, is subsidized 84.8 percent, and Montana State University, the next least subsidized, counts a state contribution of 51.1 percent.
According to state budget data, the amount of support going to the UM Athletics Department for tuition waivers increased by $441,211 from last fiscal year to this one, for a $3.1 million total. The amount contributes to a 16.6 percent increase in total athletics waivers and represents a 189.6 percent jump from $249,005 to $721,204 in support for resident waivers.
However, from last fiscal year to this one, all tuition waivers — for instance, for student athletes, veterans, Native Americans and others — going to UM students increased some 21 percent, from $13.6 million to a projected $16.4 million. In the same period, tuition costs increased at UM.
UM athletics officials consider the support from Main Hall an investment. For instance, over the last five years, the additional $500,000 in institutional support for waivers comes with a $1.5 million return in tuition and fees, Martin said.
While contributions for waivers have gone up, he said institutional dollars for personnel have dropped some $360,000 over the last five years.
Generally, the Athletics Department has experienced reductions and deferred maintenance because of campus budget struggles, said Martin and Haslam. They also shared their philosophy for absorbing cuts.
"We've consciously said we're not going to lose our competitiveness," Haslam said.
Over the last year, Martin said the department lost two staff members out of an estimated 75 FTE, or full time equivalents, and it has also shortened some contracts from going 12 months to running 11 months. Haslam said staff in operations have been cut in order to protect those in coaching.
"They've really been the ones that have felt the brunt so we can preserve the coaching staff so we can stay competitive," he said.
UM administration would not directly address how it weighed the decision to increase support for athletics and whether the contribution for waivers could have gone to other areas.
In an email, UM finance director Rosi Keller said the administration reviewed all waivers and adjusted as necessary: "Athletics didn’t award an additional $500K in waivers. As you recall, we reviewed ALL waivers and built into the FY18 budget the true cost of all waivers for UM. The increase in the Athletic budget reflects this alignment."
The number of student athletes at UM ebbs and flows, but with the recent addition of softball, the total sits at roughly 330, Martin said. And Haslam said the scholarships UM offers are critical to the overall success of the program.
"The first place you've got to invest when you want to stay competitive is in scholarships, in offering scholarships to attract the very best student athletes and then build your team," Haslam said.
UM added softball to be in compliance with Title IX, and it offers 12 softball scholarships dispersed among 25 or 26 athletes, Martin said.
When UM first added softball, Main Hall agreed to help pay for a portion of the scholarships of $350,000 in all, but as enrollment dropped and fee revenue slid, Haslam said the campus wasn't able to pay its share, and the Athletics Department funded the scholarships internally.
The Grizzly Scholarship Association picked up the bulk of the increase for several years, Martin said: "It got to the point where they didn't have anymore money to contribute, so that's where the university had to step in and increase waivers."
Generally, UM athletics relies heavily on its fans, and it also contributes financially to the good of the campus as a whole, Haslam said.
For instance, the Athletics Department pays $190,000 a year on the bond for the Interdisciplinary Science Building. It also pays $1 million for use of the Adams Center in rent, custodial fees and other costs, said Martin, who noted some athletics programs don't incur rental fees at all.
In its bid to pull in revenue, the Athletics Department brings in more dollars from football ticket sales than most Mountain West schools, on par with Washington State University, Haslam said.
"We ask a lot of our fans. They spend more on their season tickets than anyone at our level," Haslam said.
UM is a Division I institution, and as a state flagship, it should remain so, he said. That status distinguishes the campus.
"We want to be as efficient as we possibly can, but we have to stay competitive, too," Haslam said.