ChapterTeam Central University of Illinois has a newly appointed president, Cath

Question

ChapterTeam Central University of Illinois has a newly appointed president, Catherine Husker. This has been a challenging budget year due to the difficulties of getting a state budget passed in the State Legislature. It appears from all reports that the budget that may get passed will be only 90% of last year's state appropriations for the University. This means the University will have to cut their own opcrating budgct for next year because of the State's expected reduction in appropriations to higher education. Husker just had a meeting with the athletic director of the university, Gareth Connor, to discuss the budget for the athletic department. Central University has been a men's football and baskctball powerhouse for the last several decades. However, the women's athletic program h year, though, the women's basketball team was one of the team's sclected to participate in the NCAA Women's Basketball Competition through an "at large bid" due to their outstanding scason. as had less success. Last Connor and Husker discussed the 2018 Athletic Department budget, which Connor believed was the final draft. The mecting did no go el. In fact, it went terribly. Husker discussed four Athletic Department budget and requested Connor to review and revise the budget in light of her concerns below. Draft II of the budget is due in two grave concerns she had about the Concern : The Athletic Department is budgeting a loss of over S3 million. Given the tight fiscal position of the university, this outcome is unacceptable to Husker. A budgcted loss of S1 million is the most she will tolerate for 2018. By 2019 the Athletic Department has to operate with a balanced budget. She tells Connor this is nonnegotiable. Concern 2: The low allocation of money to the women's athletic program. Fox Valley News, a tabloid television show, recently ran a program titled "It's a Man's World at Central University Athletics' Program." Husker said Connor is treating woman athletes as "third-class citizens." Concern 3: The low academic performance of the men's football athletes, many of whom have full scholarships. She notes that the local TV news recently ran an interview with three football-team students, only one of which "exemplified the high academic credentials she wants Central to showcase to the world." As for the other two students, she calls one student incoherent" and another "incapable of stringing sentences

Explanation / Answer

1. The primary stakeholders are the atheletes on whose performance the reputation of the university with respect to sports depends.Other key stakeholders are the fans and spectators, the media, the State, the University management, the atheletics department head, the sponsors and coaches who all directly or indirectly contribute to the success of the team either financially or help in improving the image of the University.

2. Revenue of the atheletic department can be increased in the following ways :

a) Hiking the ticket prices for football and basketball matches which will fetch 0.3 milllion say

b) Increase in donations and sponsorship fees say 0.2 million

c) Small hikes in student fees, assume about 0.2 million

d) More participation in different tournaments or away games . Let's say this will bring in 0.25million

e) Increase in revenue from media rights and branding/merchandising , assume 0.15 million

Above measures will bring in additional revenue of $1.1 million.However some of the pitfalls from the above suggestions may be decrease in ticket sales due to higher prices, more pressure on the atheletes because of increased workload at the neglect of the studies, media may refuse to do the coverage if meadia rights fee are increased.

3.Costs of the atheletic department can be reduced in the following ways

a) Scholarship cuts for non deserving atheletes who are academically poor. Let's say this saves 0.1 million

b) Reduction in costs of non -core(other) sports which are not generating much revenue by say 0.7 million

c) Reduction in basketball program costs by say 0.4 million

d) Reduction in coach salary - 0.1 million

All the above measures will result in cost saving of $1.3 million. The potential pitfalls may be athelets who may be extremely good at sports but weak in studies may lose their scholarship.Thus the athelics team may lose some of the star players which will affect team performance.

Reduction in cost budget for non core sports may result in backlash from atheletes good at those sports.

Reduction in salary of coach may dent his motivation levels.

4) The gender issues which Husker raised are was that there was very less focus on the women's atheletic programs. Women were being treated as third class citizens becuase of the low budgetary allocations for the womens' program.

The above issue can be addressed by first improving the allocations to the women's program. Due to te revenue increasing and cost saving measures the budgeted operating loss will come to down to $ 0.610 million. Since Husker can tolerate up to $ 1 million operating loss, the balance $ 0.39 milllion can be allocated to the women's program to address the gender issues to a certain extent.

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