After six years, Chuck Gee steps down at the end of this month as one of the longest serving members of the University of Hawaii Board of Regents.

But when it comes to determining the proper level of funding for intercollegiate athletics, even Gee, retired dean of Manoa’s School of Travel Industry Management, says putting a realistic number on that figure has been elusive for UH over the years. "What is the right number?" Gee asked at a recent regents meeting. "I don’t know that it has (ever) been answered."

Nobody is sure what the balance should be among state and institutional support and self-generated funds or how to reach it.

The only agreement is that, amid rising deficits and limited state and institutional support, the present model isn’t working — and hasn’t for some time.

To better understand, the regents have scheduled a so-called "deep dive" —chairman Randy Moore’s term for an extensive subject review — of athletics in August during which finances will be under the microscope and new athletic director David Matlin will be asked for a plan.

It will take place following the arrival of four new regents on the 15-member board and follow the closing of the books on what athletic department officials say will be $3.8 million-$4 million deficit for the fiscal year ending June 30.

That will take the accumulated net deficit of the past 14 years to $21.4 million even as the next fiscal year, which opens July 1, is forecast to add $4.7 million-$4.8 million in the red, according to a preliminary estimate given the regents.

UH has plenty of company wading in red ink, regent Stanford Yuen noted, saying, "Over 90 percent of the (athletic) programs in the country are in deficit."

Deficits at Rutgers University, it has been reported, exceeded $20 million a year for the past decade and none of the fellow conference members UH regularly competes against run in the black, either.

"Of course, misery loves company," Yuen said. "But we can always improve and I think that needs to be made known. I hate to say it is acceptable …"

Jeff Portnoy, chairman of the regents’ Committee on Intercollegiate Athletics, says members want to know, "What is it going to take to run this athletic program and be competitive? It is not that the athletic program can’t run at a deficit — all but a small handful of the Division I programs across the country do — our question is: ‘Where is the money going to come from to pay the bills?’ "

SUBSIDIES RELATIVELY LOW

It costs approximately $33 million to operate the state’s only major college athletic program, a 21-team operation in which about 60 percent of revenue is generated by the athletic department.

That includes ticket sales, corporate sponsorships, donations, rights fees and other revenue streams.

Manoa Chancellor Robert Bley-Vroman told legislators earlier, "UH is subsidized at the lowest percentage of any of the schools of the nine-member Big West Conference. I don’t know if subsidized is the right word — the contribution beyond the operations made by general funds and other sources to UH athletics is about 40 percent," Bley-Vroman said. Most of UH’s competition in the Big West, where most of UH’s sports compete (though not football), is subsidized between 70 and 90 percent, he said.

In the Mountain West, where UH competes in football, Bley-Vroman said, "we are ninth out of 12 in percentage (of outside support)."

UH spokesman Dan Meisenzahl said although UH receives student fees ($1.7 million a year), "we do have among the lowest student athletic fees in the country" at $50 per semester.

UH is also one of two schools in the MWC that does not own or operate the football stadium it plays its home games in and is the only one that doesn’t share in concession revenue from football.

As a condition of membership, UH is the only one in either the MWC or Big West that pays travel subsidies to conference members. They total about $1.2 million per year.

Moreover, as a result of its geography, UH teams travel more than their mainland rivals. This season, the UH football team is scheduled to travel nearly 42,000 miles, which is more than anybody in the NFL in the regular season, and double most of the teams’ mileage.

2 SPORTS ARE PROFITABLE

Winning teams — especially in prime revenue sports football, volleyball, basketball and baseball —will boost the bottom line, but UH officials said the overall financial model must be adjusted, too.

Only twice in the past 13 years has UH managed a surplus, and one of those years (2008) was attributable to a $4 million Sugar Bowl payout.

But even then UH was in the black by just $295,243, momentarily stemming a growing accumulated net deficit.

In its best years, football can be credited with bringing in as much as $12 million through directed and allocated revenues, ticket revenue, sponsorships, media rights, etc., enough to help underwrite a handful of sports that do not pay for themselves.

But in hard times, such as UH’s current streak of four years without a winning record in football, ticket sales can drop off precipitously, limiting the ability to help carry other sports.

Kalbert K. Young, UH vice president for finance and chief financial officer, said, "I recall early on, back in January, there was some talk around (that), maybe, UH Manoa should not be in Division I football, but athletic director (Ben) Jay did a very good job of explaining that actually football is one of only two sports that actually is in the black."

Rainbow Wahine volleyball has been the other.

Young said, "It is not that football brings down the athletic program; it is more accurate that football (in down years) doesn’t bring in enough money to support the entire athletic program."

ATHLETICS ISN’T ALONE

Athletics is one of more than a dozen accounts, including the aquarium and animal research, on campus that operates as what UH terms a "special fund."

As recently as 2001 athletics ran in the black for consecutive years in which annual surpluses were plowed back into the fund for special and so-called "rainy day" needs. But the last of the surpluses expired in 2002.

Since then, UH officials said, when athletics have run at a deficit that, depending upon the time of the year, other sources, including fees, other special fund balances, general funds, academic programs or tuition may be tapped to make up the difference.

Young said, by way of analogy, "It is like saying that rather than saving for your kid’s college fund, you are gonna have to pay (down) your credit card bill."

Gov. David Ige has said it is up to UH how it doles out the general funds it receives from the state, and both UH President David Lassner and Bley-Vroman said they are loath to cut other deserving areas to prop up athletics in tight fiscal times.

WHAT’S THE TRUE BENEFIT?

Portnoy and others said they believe UH should receive cash or credit for what its athletic program produces and means for the state.

"(UH) brings in $60 million to the economy (through tourism) but doesn’t receive anything from the Hawaii Tourism Authority," Portnoy said.

It was a reference to the January 2015 Shidler College of Business economic impact report that said athletics generates about $66 million in direct spending, $128 million in Hawaii business sales, $7 million in state tax collections and 860 jobs.

However, athletics no longer receives what had been a $575,000 annual appropriation from the HTA.

"They are giving money to the Pro Bowl and golf tournaments — why not UH?" Portnoy said.

UH would also like to be credited for parking revenue its on-campus events produce and share in proceeds for signage and concessions at Aloha Stadium. It has long been a bone of contention at UH that the school pays for the cleanup of its football games at Aloha Stadium but does not share in concessions revenue.

Portnoy said he understands the stadium is charged by the state with self-generating its operating and payroll costs but said "perhaps the state could credit UH with what we bring to the stadium. We’re hoping David (Matlin) may have some ideas along those lines."

Stadium Authority Chairman Charles Toguchi said $150,000 of the stadium’s five-year $1.5 million naming rights contract with Hawaiian Airlines is being set aside and could go to UH to help mitigate travel costs.

In a pitch to the Legislature this year in asking for $3.5 million in assistance for athletics, UH pressed the position that the athletic program is, in Bley-Vroman’s words, "not just for the Manoa campus, but our entire state."

Lassner said, "Manoa does not run this program for our (UH’s) sole benefit. (Athletics) is a point of pride within the community that generates substantial economic activity in the community."

UH did not receive the requested funding, but Young, a former state budget director, said, "I think a very big message got made a lot clearer at the Legislature this year. And so, I’m expecting next year there can be another, more robust, discussion around funding athletics because, I think, the Legislature has a greater appreciation about the larger value. It is not really about funding athletics for the university, it is really about funding athletics for the state."

PAYING THE BILLS
Deficits and surpluses for the UH athletic department