March 14, 2013 • Athletic Administration

The athletic budget balancing act

Deep cuts in high school sports means athletic directors must take new approaches to planning, fundraising and revenue opportunities

When Jim Quatromoni joined Hull High School (Mass.) six years ago as athletic director, he inherited a $280,000 budget.

Two years later it was zero.

While few budget reductions are this extreme, athletic administrators across the nation are faced with a new era of fiscal challenges. With the economy’s recovery inching along, school boards continue to slash funding for athletics as student participation reaches record levels. That’s forcing athletic directors to get creative, finding new sources of revenue while attempting to make cuts in places that inflict minimal damage on students and staff.

That hasn’t been easy. Whether it’s budgets, fundraisers or department management, the 21st century athletic director must adapt to a new environment.

Athletic Director Takeaways

• A zero-based budget for athletic departments helps eliminate waste and analyze the most urgent needs.

• Athletic directors must meet individually with coaches and staff to determine savings opportunities.

• When considering pay-to-play, consider hardship waivers or other ways to help elevate participation rates.

“I’ve said this more than a few times, but these students have been fighting for us on the field, the courts and the ice for years and years,” Quatromoni said. “Now it’s our turn to fight for them, and they deserve it.”

Never before have athletic departments faced the financial crisis they do today. Rising costs and fewer dollars allocated to school districts mean tough decisions have to be made in the classroom and on the playing field.

In many cases, the cuts have been deep. That’s leading athletic directors to develop an entirely new train of thought when it comes to program management and revenue. Some have instituted pay-to-play and some have dropped programs or downsized staff. It also means athletic administrators must constantly analyze their financial situations throughout the year and make appropriate adjustments to their budgets.

What makes the predicament even more taxing is participation rates continue to increase. Nearly 7.7 million high school students played sports during the 2011-12 school year, marking the 23rd consecutive year of increased participation. Student involvement is always a priority for athletic directors, but with more participation comes greater costs. And one of the biggest challenges in the coming years will be managing those expenses with less revenue.

Preparing the budget

A common practice for athletic directors when considering their upcoming budget is rolling over last year’s figures and making adjustments from there. That’s something that’s becoming more difficult as spending is under constant scrutiny.

Ken Mohney, director of student activities with the Mattawan Consolidated School District in Michigan, says more athletic administrators are turning to a zero-based budget as a result of the uncertainty surrounding their finances. The practice takes more time, but it helps eliminate wasteful spending while making sure precious dollars are only invested in areas where there’s an immediate need.

“Budgets should be constructed as a guideline that reflects organizational priorities while maintaining compliance with state and federal guidelines,” Mohney says. “When questioned or examined, thorough and accurate reports build trust from stakeholders such as coaches, the business office and school community.”

That’s important to keep in mind, Mohney says. Other budgetary practices might be easier on your schedule, but finding justification for dollars spent and items purchased shows your staff that you’re determined to address your program’s needs and not the things that can wait another year or two.

That’s exactly how Quatromoni approaches his budget, though he was left with little choice after his funding was completely cut off. His department recently had $40,000 put back into its budget, but it’s still a far cry from where it used to be, and that’s forced him to completely change the way he approaches spending. Coaches continue to make their requests, but Quatromoni often has to turn them down. What he finds helpful is keeping a “wish list” of items they would like to purchase but can’t justify at the front end of the fiscal year. If at the end there is money left over, he’ll look to the list and determine what he can do.

“I like to keep that list so if somebody says you have this much money and you have a day to spend it, I can spend it in five minutes,” he says. “Otherwise, we’re only spending the bare minimum.”

All-inclusive meetings

Most athletic directors make time to meet with coaches and staff when preparing budgets, but that process has now become a necessity. Whether it’s apparel, equipment or travel arrangements, discussions between the two reveal the best opportunities for savings and the priorities that need to be addressed. Given the strength of your funding, it may be difficult to accommodate a coach’s requests, but it’s still important that you include them in the process and let them know you take their input seriously.

Mohney says to be mindful of other key players in the department too, such as the business manager. Anyone who might provide valuable information about your department’s status or priorities should be part of the conversation.

“It’s certainly a collaborative process in the sense that with the central office and the coaching staff, you try to determine the department’s needs,” Mohney says. “I solicit feedback from those parties on the items where adjustments could be made on budget line items.”

Meetings with coaches are one of the most important steps in developing a thorough and accurate financial projection, regardless of which budgetary approach you take. Athletic directors working with a zero-based budget must take the time to identify each program’s pressing needs while those rolling over last year’s budget must eliminate expenses that are no longer necessary. Conversations with those deeply involved in each program help bring those to light.

Quatromoni continues to have these discussions, but he admits that requests from various programs are most times denied. During the meetings, the coach and athletic director review spreadsheets with the program’s ordering history to determine what needs to be addressed and what can wait another year.

“I tell them to tell me what they need and I’ll get what I can,” Quatromoni says. “After six years I have a pretty good handle on who needs what, and the big things that are coming to get us now are the uniform cycles.

“Those meetings where we talk about what we’re going to buy are not very long meetings because they know there’s just not a whole lot I can do.”

Budgeting Quick Tips

Accuracy + justification = trust: When creating a budget, make sure all your numbers add up and you have appropriate justification for each and every request. That’s how you build trust with your school board, staff and community members while showing that your budget is free of “fudge.”

Report the different between proposed and actual budgets: Oftentimes the actual budget doesn’t necessarily reflect the one that was approved. Special circumstances or needs may arise, resulting in excess spending in some areas or even savings in another. Make sure you’re reporting to the administration where the shortfalls and surpluses occurred. This shows you’re being honest and transparent.

Welcome an external audit: You may have individuals on staff who are qualified to review your proposal, but hiring a budget-savvy person on the outside to audit your work is important. It gets assurance from someone who is detached from your process and shows your dedication to accuracy.

Continuing education: The National Interscholastic Athletic Administrators Association offers leadership training courses on everything from the philosophy of educational athletics to risk management. It also offers a course (LTC 511) called “Concepts and Strategies For Interscholastic Budgeting and Finance Using Excel Spreadsheets.” The course is highly recommended for all athletic directors responsible for creating their department’s budget.

That’s why Quatromoni maintains a wish list, which can be a great tool for athletic directors to stay current on the department’s top priorities. He also allows programs to buy “a toy” if they make a splash with their individual fundraising efforts. For example, the baseball team raised a significant amount of money for the department, so he gave a little back to the program by allowing them to purchase a new bat.

It’s been a great motivational tactic and it lets programs know the athletic director takes their requests seriously.

“We’ve had some successful individual team fundraisers,” Quatromoni says. “If they raise $2,000 for me I’m going to spend $500 for something that’s necessary for their sport and then put the rest into the general fund.”

Searching for savings

It’s difficult these days to justify higher taxes or convince the school board to allocate more money to athletics. That’s where athletic directors must focus their efforts on finding savings within the current budget.

Opportunities exist throughout the department, but along with your staff you must determine what’s sustainable and what’s not. Areas that deserve close scrutiny include transportation, staff, apparel and equipment.

Athletic directors likely have reviewed all of those and, in some cases, squeezed as much as they can out of their current resources. Quatromoni says transportation and payroll are the biggest expenses in his budget, and he’s made adjustments where possible. So far, his department has only had to cut a couple of assistant coaches, and in some cases teams were able to find alternative travel accommodations for student-athletes so they can cut expenses.

“Transportation is just one of those expenses where we are bombed,” Quatromoni says. “But we must get them there. We’ve done game reductions and I’m certainly mindful of where we go. I tell some schools, ‘you can come play me but I can’t come to play you.'”

One of the most significant changes was in gameday support. He says volunteers now make up 99 percent of the crew that works the ticket booths, concession stands and other gameday duties. That’s resulted in a savings of about $80,000 over the last four years.

During the preseason parent-coach meetings each year, Quatromoni secures a list of anyone willing to perform certain functions on gameday. He groups those names onto email lists and he then sends them the team’s schedules to determine everyone’s availability.

A lot of the gameday duties are simple, but he admits the scorer’s table at a basketball game is a stressful place, regardless of your experience.

“That’s been a big saver,” Quatromoni says of the parent volunteers. “It’s been time consuming for me to manage it, but we fill those spots. Parents volunteer and people are starting to get comfortable. I spend time training people in freshmen and junior varsity games to get them ready for the varsity sports.”

Another step Hull High School was forced to take was reassigning gate ticket revenue to the general fund, helping the athletic department better handle its numerous expenses. Prior to the program’s extreme cuts, a booster club was collecting the gate receipts and using the revenue to pay for awards and other things that couldn’t be justified in the school’s budget.

Bringing the department’s budget back to $40,000 was a modest but helpful turnaround for a school with 15 sports and 27 teams. Combine that with cost reductions and fundraising efforts and he’s able to put together a budget of nearly $200,000 each year.

“We’ve done a good job at fooling the students (about our financial situation),” Quatromoni says. “We’re not on regular uniform cycles. We’re relying heavily on donations, and things I should be doing and changes I should be making, I’m not. We’re just plugging one hole at a time, and it’s frustrating. We’re just trying to stay afloat.”

Expanding revenue opportunities

Cutting expenses can only go so far. To keep their athletic programs up and running many schools examine two opportunities: fundraising and pay-to-play.

Quatromoni fought the school board on user fees, but that was before he learned it would entirely eliminate his budget. The school now charges $250 for the first sport, $175 for the second and $150 for the third. There is a $25 surcharge for football and hockey.

A Coach And Athletic Director survey of 629 readers found that participation is up at least 2 percent in 44 percent of schools this year. Only 10 percent are on the decline, illustrating how student involvement is growing and placing a heavier burden on finances, especially for departments that don’t charge user fees.

Quatromoni refuses to let money stand in the way of a student’s participation. He maintains a waiver list of students who can’t pay, and this year he instituted a “sponsor a student-athlete” program. The initiative lets sponsors anonymously make donations to pay for a student’s user fee. Quatromoni believes it’s more encouraging and rewarding for donors when they see their money helps to put a student in uniform as opposed to paying for apparel or equipment.

Pay-to-play is met with mixed reactions among athletic directors. While it helps alleviate the shortfall in the budget, it can be a detriment to participation. That’s partly why many schools offer waiver programs for students whose families may not be able to afford the fee.

Hull High School’s participation rate is at about 58 percent of its 341 students. It also has 35 to 40 percent on free and reduced lunch, so it’s expected there will be student who can’t pay the user fee.

The school’s small size allows Quatromoni to personally visit with any student who plays sports one year but backs out the next. He recognizes names omitted from the list and speaks with the student to make sure they’re not letting money stand in the way of their participation.

“I’m going to ask the student what’s going on,” he says. “What we don’t want is for a student to not play because of dollars.”

Between the gate fees and user fees, the athletic department typically pulls in between $70,000 and $80,000 each year. Quatromoni then gets significant contributions from the booster groups and other fundraising events that have stepped up their efforts over the years.

That’s where relationships and networking within the community really pay dividends. Quatromoni says he considers the booster president to be a co-worker, given the level of contributions outside groups have made over the years. Hull Youth Football over the last four years has donated about $20,000 while the community’s youth hockey organization has contributed $16,000.

“They understand we need to keep the participation high because the implications of not having it there are literally endless,” he says. “Not all of them are handing me checks with smiles, but to their credit they’re handing me checks.”

Planning for the future

Quatromoni expects conditions to improve, and with the economy showing signs of recovery it’s possible more funding could find its way back into athletic budgets. Coach And Athletic Director’s survey shows budgets were more stable this school year than the last. That could be a sign funding is returning, but Mohney cautions that it could be a result of departments hitting rock bottom, leaving no more room for cuts.

Quatromoni says the school board already is discussing raising his budget from $40,000 to $80,000 next year. That would be a tremendous help to his department but still miles from where it was six years ago. He’s come to understand this new way of looking at budgets and finding alternative means for revenue may be the norm. That doesn’t mean there may not be sacrifices along the way–something he’s been able to avoid so far.

“This is not a sustainable model,” he says. “There’s going to come a time when I’m not going to be able to tell you we haven’t had to cut something and somebody is going to be outraged and upset that their team is no longer there.”

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