Athletics to pledge to LSU
In what LSU officials are calling a one-of-a-kind arrangement, the Tigers’ Athletic Department may make it a formality to subsidize the main campus with millions of dollars every year to support academics and research.
The LSU Board of Supervisors will vote Friday on the LSU Athletics Fund Transfer Policy. Under the agreement, the Athletic Department would transfer $7.2 million annually — $36 million over five years — to support university academics.
The policy also would include a revenue-sharing component that could mean even more dollars for the academic campus should the LSU Athletic Department generate a budget surplus.
The first $3 million in surplus funds would be earmarked for athletics reserve accounts, LSU Associate Vice Chancellor for Communications Herb Vincent said.
An athletics program surplus between $3 million and $5 million would result in 25 percent of those dollars going to LSU’s nonathletic initiatives.
The university and the athletics department would split evenly any surplus above $5 million, he said.
Some college athletic departments contribute to their universities on occasion.
But interim LSU System President and Chancellor William Jenkins said he’s not aware of a similar yearly financial arrangement at any other university.
“We’ve been blessed to have a very successful and self-sustaining athletics program for a long time,” Jenkins said. “I think this is innovative and looks to the future. Our athletic success will have a direct impact on our academic success.”
Earlier this year, the Athletic Department gave LSU $5.5 million to help the university stave off layoffs and pay for the Academic Center for Student-Athletes.
LSU’s budget has been tight over the past four years as state funding to higher education has been slashed by more than $420 million, including $66 million this year.
LSU’s share of that is a $19 million budget cut that has lead to program mergers and less money going to certain academic departments.
The LSU Athletic Department, meanwhile, has been flush with cash over the same period, with more good times possibly on the way, according to predictions.
Vincent said the Athletic Department annually transfers millions of dollars to the university’s building fund and to help finance campus beautification initiatives. Periodically, the Athletic Department has transferred larger amounts to help build a new band hall and business school among other projects, he said.
Part of the money, Vincent said, was to reimburse the campus for services the Athletic Department uses, including employee payroll and LSU Police.
Should the board approve the policy, Vincent said it would make official what has previously been an informal arrangement made necessary by state budget cuts.
“Instead of having a floating number every year, this gives everybody an option to plan better,” Vincent said.
He credits a passionate fan base, lucrative television and radio contracts, and a revenue-sharing agreement with the Southeastern Conference for the Athletic Department’s steady flow of cash. This year’s budget will exceed $96 million, he said.
Back in 1998, LSU’s athletics budget was less than $30 million. The department broke the $50 million barrier after winning the 2003 football Bowl Championship Series National Championship under then-coach Nick Saban, who now works for the University of Alabama.
LSU then exceeded $80 million in athletics costs after winning the 2007 BCS National Championship with Les Miles at the helm. Revenues last year jumped over the $95 million mark.
After the 2003 championship year, LSU and the private, nonprofit Tiger Athletic Foundation started the “Tradition Fund” that made it more costly to acquire and maintain season tickets. Mandatory donations are required in addition to the ticket costs.
The Tradition Fund, coupled with CBS and ESPN television contracts for the Southeastern Conference a few years later, inflated the budgets.
Forbes magazine recently listed LSU in the top five nationally of “College Football’s Most Valuable Teams.” In January, the Wall Street Journal reported that LSU leads the country with its football revenues representing 14 percent of the entire university’s total revenues.
Vincent said Wednesday that the future looks brighter for LSU athletics as television contracts become more lucrative.
“There seems to be promise for more funds,” he said. “The projections look promising.”