UH sports sacked for a loss of $1.8M in 2012

A year after turning a profit, the University of Hawaii athletic department ran a $1.8 million deficit in the past fiscal year, and the UH football program’s struggles this season are expected to contribute to a bigger hit this year.

The department’s financial statements for fiscal 2012 were presented Wednesday to the UH Board of Regents Committee on University Audits, and show that the department increased spending by $3 million while revenues dropped by about $1.5 million over the previous year.

For the current fiscal year, which ends in June, UH associate athletic director Carl Clapp told the committee the department began with a projected deficit of $512,000, but that the projection has climbed to $2.3 million. Much of that larger fiscal 2013 deficit is due to football ticket revenue coming in $1.2 million less than expected and expenses related to changing conferences, he said.

The move from the Western Athletic Conference to the Mountain West in football and Big West in other sports includes UH paying travel subsidies to member schools.

"We have expenses that no other universities have," UH-Manoa Chancellor Tom Apple said after the meeting.

Apple said during the meeting that "maybe 10" athletic departments in the country break even.

"We need to have a discussion about whether we want a strong, vibrant athletics program that can compete at Division I-A. Apple said. "That’s a discussion to have, and not just as a university but as a state because it is the only game in town."

With last year’s total, the department’s accumulated net deficit grew to $11.3 million.

The deficit for the current year figures to reflect the UH football program’s 3-9 season in Norm Chow’s first year as head coach, with attendance at Aloha Stadium dropping over the course of the season. The turnstile count for the season finale against South Alabama was 21,521.

UH athletics finished in the black in fiscal 2011 when the department came out $858,220 ahead, boosted by the UH football team winning a share of the Western Athletic Conference title in fall 2010.

Operating revenues dropped to $17.4 million in fiscal 2012 with a $600,000 payout to former football coach Greg McMackin and an increase in guarantees paid to visiting teams contributing to the increase in expenses.

The department finished in a deficit despite an increase in nonoperating revenue, which includes fees and private donations. UH athletics took in $14.3 million in 2012 compared with $12.4 million in 2011.

Apple said the university provides close to $8 million to the athletic department, including about $1.5 million in student fees, $1.4 million from the general fund and $5 million in scholarships. The rest of the department’s revenue comes through ticket sales and fundraising.

"That is fairly conservative when compared to other universities, in the Mountain West even, let alone some of the other conferences," Apple said of the institutional support.

Apple said Ben Jay, recently hired as full-time athletic director, could begin work in mid-January, and added, "I’d like to confer with him on athletics and where we want to move forward" in coming up with a long-term business plan for the department.

UH vice president and interim athletic director Rockne Freitas said, "To many in the community, the athletics department is the face of the university. So it’s a philosophical question."

The auditor’s report also pointed out potential NCAA compliance problems regarding sports camps operated by the department’s programs, such as the waiving of camp fees and the distribution of funds raised through dinners held in connection with the camps. Clapp told the committee the problems have been reported to the NCAA and the department is providing additional information while awaiting a ruling.