WKU Athletics reports $30.8 million in revenues, expenses for fiscal year ended June 30, 2019

Concept Western Kentucky University Basketball (9)_full video

Evan Culbertson

Editor’s note: A previous version of this story reported WKU “broke even” on athletics for the fiscal year ended June 30, 2019. The athletics budget was balanced by a combined subsidy of about $17.5 million from university funds and mandatory student fees in addition to $3.8 million in indirect institutional support for the athletics department. The story has been updated and the Herald regrets this error.

The WKU intercollegiate athletics department has released its financial data for the fiscal year ended June 30, 2019, with the university reporting departmental expenses totaling roughly $30.8 million were offset by a combined subsidy of about $17.5 million from university funds and mandatory student fees in addition to $3.8 million in indirect institutional support for the athletics department.

The Board of Regents will conduct committee meetings via Zoom at 1 p.m. Friday, and one of the action items the board’s finance and budget committee will consider is FB-1: “Approval of Accountants’ Report on Application of Agreed-Upon Procedures, NCAA Compliance Report.”

The annual report was conducted by external auditing firm Crowe LLP in accordance with NCAA Constitution Article 3.2.4.15. According to the bylaw, every NCAA-affiliated institution must submit financial data detailing operating revenues, expenses and capital related to its intercollegiate athletics department to the NCAA on an annual basis.

Non-program specific student fees contributed a total of nearly $4 million to the total revenues of the intercollegiate athletics department, but a similar amount of revenues collected from student fees has actually kept WKU ranked near the bottom of that category in Conference USA in recent years.

Direct institutional support provided an additional $13.5 million to operating revenues, while indirect institutional support contributed $3.8, bringing the total amount the university’s athletic department needed to stay out of the red for the fiscal year to a combined total of roughly $21.3 million.

Department spokesman Zach Greenwell confirmed with the Herald that the university and its divisions “have to end the year with a balanced budget,” which is the reason why the $30,770,121 figure was reported for both expenses and revenues after “a thorough audit process” was completed.

“Athletics operates with a zero-based, balanced budget that is supplemented by private funding as necessary to remain in balance,” Greenwell wrote in an email. “With that, the amount of private funding will vary year over year. When the budget is built and approved, the amount of private funding is budgeted conservatively with the understanding that if the athletic department operates in excess of budgeted expenses, it is Athletics’ responsibility to generate private funding to fill in any gaps.”

Though the department is effectively balanced for the fiscal year, there is still an outstanding debt totaling $17.7 million associated with the recent renovation of Diddle Arena. The report outlines the university’s plan to pay off the outstanding debt in annual increments through the 2025-2026 fiscal years, with an added payment of $2.7 million in accrued interest.

“The Diddle Arena debt is accurate, and plans are in place to have this debt paid within the timeframe agreed upon when the debt was taken on,” Greenwell wrote in an email.

The report also divulges the amount of earned revenues by three specific WKU programs — football, men’s basketball and women’s basketball — as well as “other sports” and “non-program specific,” including ticket sales, contributions and guarantees.

The WKU football program was the highest-earning program for the university over the fiscal year, pulling in a total of $8.6 million. The WKU men’s basketball program was second with a total of $3.6 million, while the WKU women’s basketball program placed third with a total of $1.7 million in total revenues.

The remaining athletic programs combined to garner a total of $6 million, and the athletic department earned an additional $10.8 million in non-program specific revenues.

Though the football program outpaced other programs by a wide margin regarding total revenues, its amount earned through ticket sales is closely followed by men’s basketball.

The football team sold a combined $1.07 million in tickets over the fiscal year, with men’s basketball bringing in $1.04 million through ticket sales.

The women’s basketball program garnered $118,953 in ticket sales, and the remaining WKU Athletics programs combined to sell $18,558 worth of tickets. Non-program specific ticket sales totaled $45,338.

The football program is undoubtedly the highest earner on campus, but it also received the most money through direct institutional support by a wide margin. The football program was granted nearly $5 million in direct institutional support.

The next closest program in terms of direct institutional support was the men’s basketball team, receiving $1.8 million. The women’s basketball program was granted $1.3 million, and the remaining programs combined to receive $5.4 million in direct institutional support.

The term “direct institutional support” is somewhat confusing, and writer Kristi Dosh reported her findings in canvassing every Football Bowl Subdivision program in the country to discern where direct institutional report funds came from in a June 2017 article for Forbes.

Dosh found through her reporting that the three most common sources of direct institutional support money actually came from out-of-state tuition waivers, Title IX tuition waivers and lottery funds. 

The men’s basketball program outpaced the football team, as well as the university’s other programs, in terms of outside contributions, receiving $484,726. It was followed closely by the football program, which received $430,628, and the women’s basketball program, which received $166,194. Remaining programs combined to receive $203,450 in contributions.

The football program outpaces all other programs in most categories regarding department expenses for the fiscal year. The football team was granted the most scholarship money by a wide margin, being given nearly $3 million while the next highest program, the men’s basketball team, was granted $518,628.

Though the WKU football program largely gains and spends more money than the university’s other programs, student aid expenses can likely be attributed to the size of the average football roster. The NCAA allows collegiate football programs to roster a maximum of 125 players compared to the 15 allocated roster spots for basketball.

The football program was the most expensive regarding coaching salaries, benefits and bonuses, giving a total of $2.3 million to its sizable staff.

The next closest team was the men’s basketball program, which paid its coaching staff $1.4 million over the fiscal year. No other program spent over $1 million on its coaching staff, as the other sports combined for a total of $1.5 million spent in the category.

The intercollegiate athletics department remained under the $1 million line on travel expenses for each team, with the football program again topping others with $730,766 spent, the men’s basketball program following with $642,388, the women’s basketball program spending $234,701 and the remaining programs combining to spend $809,236 on travel.

The football program and men’s basketball program also top the list in recruiting expenses, with the football team’s $197,442 followed closely by the men’s basketball teams’ $174,970 spent. No other program spent over $100,000 dollars on recruiting, as women’s basketball spent $88,603 and the remaining programs combined for $144,585 spent in the category.

The report also includes the total amount of severance payments allocated to each team, though the football program was the only recorded expense in this section, with a total of $275,975 spent on severance. This is likely due to the mass exodus of most of the team’s previous coaching staff, which occurred during the reported fiscal year.

The football program again outpaces others in overall expenses,, with $8.6 million spent on the team over the fiscal year. A distant second is the men’s basketball program with $3.6 million in expenses, and the women’s basketball team sits at third with $1.7 million spent. Remaining programs combined to spend $6 million. There was also an additional $10.8 million in non-program specific expenses.

WKU Athletics required large chunks of money through direct and indirect institutional support to stay even for the fiscal year, but the final numbers are very close to those from the fiscal year ended June 30, 2018, a year in which the total revenues and expenditures also matched.

The school earned and spent roughly $30.8 million over the reported year, which is a slight rise in both categories compared to the previous fiscal year, which saw the school earn and spend roughly $30.6 million, an exact difference of $175,094.

Though WKU Athletics required extra support to end balanced, other added contributions helped keep the department out of the red. The financial report included a note that the WKU Foundation “receives gifts and contributions that are restricted for the related athletics programs,” and the Hilltopper Athletic Foundation also raises funds and “transfers them to the University when needed.”

While the numbers indicating WKU Athletics’ budget was balanced may appear suspicious at first, it is a very common occurrence in collegiate athletics. Athletic departments aren’t supposed to finish in the red, and many theorize a department couldn’t continue to operate if it reported a deficit.

Collegiate athletic departments are classified as non-profit entities, and therefore do not emphasize net financial gains over a fiscal year. The red-and-black-clad Hilltoppers have avoided both of their colors fiscally for another year, but only with some significant financial aid from the top of the Hill.

Click the PDF below to scroll through the entire action item that will be presented Friday:

Drake Kizer contributed reporting to this piece.

Reporter Evan Culbertson can be reached at [email protected] Follow Evan on Twitter at @evan_culbertson.