Athletics counting on enrollment growth, sales, and private dollars to plug deficit

The FAMU Department of Athletics has unveiled a five-year plan to reduce its operating deficit by 85 percent. It counts on enrollment growth, increased sales, fundraising, and spending reductions to get the job done.

Enrollment Growth
One of the most important sources of revenue is enrollment growth. FAMU continues to make steady progress toward its goal of reaching the 15,000 student mark. The swelling student numbers are bringing more student fee money into the athletic department’s coffers. Student fee collections currently make up 58 percent of athletic revenues.

Athletics collected $5.1M in student fees during the fiscal year ending (FYE) 2011. It anticipates a $480,782.17 increase as a result of enrollment growth over the next five years, for a total of $5.6M by FYE 2016.

The department is not banking on any increases in the student athletic fee rate (which it does not control). State law requires student athletic fee rate hikes to be approved by a committee appointed jointly by the university president and student body president.

Sales
Athletic officials claim ticket sales are up for 2011-2012 following FAMU’s strong football season and the hiring of Clemon Johnson as the new men’s basketball coach, though the department won't (can't) say by how much. Ticket, concession, advertising, and licensed merchandise sales are expected to continue climbing. Sales currently comprise 40 percent of athletic revenues.


Fundraising
The department is particularly optimistic about its partnership with IMG College, which is serving as an exclusive third party sales representative for FAMU’s athletic corporate sponsorship program.

IMG is focusing on boosting revenue associated with Homecoming, the Atlantic Classic, the Florida Classic. It is also seeking to improve the Marching 100’s branding and draw more sponsors.

The IMG partnership is expected to bring in $250,000 in FYE 2012 and eventually rise to $1M by FYE 2016.

Other sources of private contributions will include the FAMU Boosters, Gaither Society, and Mobile Giving Campaign.

Spending Reductions
Athletics will also implement two percent budget reductions over the next five years. The trimming will start with a $204,033.28 cut in FYE  2012 and go up to $337,821.85 in FYE 2016. The department will pare back on surplus out-of-town games for certain teams and stick closer to the minimum number of games required by the National Collegiate Athletic Association.

Patient Outlook
The investments athletics is making to get the deficit under control might make the red ink a little worse before it becomes better. Athletics ended FYE 2011 with a $6.1M deficit. Department officials anticipate that the deficit might make a small bump up to $6.2M in FYE 2012 before dropping down to $977,237.54 by FYE 2016.