The focus of Division III budget discussions sharpened significantly over the summer. In a late June meeting, the Division III Strategic Planning and Finance Committee approved a series of cost-cutting measures formulated by the Division III Championships Committee. The division is facing a $2.5 million budget shortfall in the coming academic year because of rapidly rising championship travel and game operation costs. To combat those rising expenses, the committees have recommended policy changes, some of which will limit reimbursements currently provided to participating institutions and hosts.
The five proposed changes (see table below) will eliminate an estimated $2.17 million from the championships budget in the 2014-15 academic year, which falls about $340,000 short of balancing the budget. A sixth option – eliminating the newly implemented softball superregional tournament structure – will be considered in the fall once the championships committee reviews the actual costs from this year’s event, the first year of the new format. The Division III Management Council, Presidents Advisory Group and, ultimately, Presidents Council, will consider the five proposals in the late July and early August meetings. The councils would consider any changes related to softball during the fall.
And while the committees may be on the cusp of winning the battle to balance next year’s budget, the war against budget overages in the long term is far from over. Even with these new cuts in place (excluding the potential softball change), the division is predicted to incur deficits of $870,000, $1.4 million and $2.1 million through the academic years spanning 2015-2018.
The finance committee also recommended that the division lower its reserve policy from an amount equal to 80 percent of the division’s annual revenue to 50 percent. Spending that balance down will provide some short-term relief, but can’t be relied on in perpetuity.
“By attaining a balanced budget, the necessity to utilize resources from cash reserves would be eliminated,” said Alan Cureton, president of the University of Northwestern – St. Paul and chair of the Division III Strategic Planning and Finance Committee. “This would be a significant and positive step for Division III as we protect the cash reserves for the future.”
To ensure a balanced budget in the coming years, other changes will be explored, including: increasing membership dues; making cuts to non-championship programs (which currently account for 25 percent of the division’s annual expenses); and changing the current championships access ratio of one bracket position for every 6.5 teams competing in Division III.
Championships and finance committee members alike agree that altering the division’s access ratio might be necessary as a long-term solution to the budget problem. Reducing the number of teams that have access to championship events would result in lower travel, per diem and game operation costs. But committee members know that striking a balance between fiscal responsibility and access to championships for student-athletes will prove to be a tremendous challenge. A spring membership survey indicated a strong desire to avoid access ratio reduction in lieu of other championships policy alternatives, and any change to the current access ratios in team or individual-team sports would require a vote from the membership.
The budget planning discussion, including membership feedback, will continue throughout the fall. And at the 2015 NCAA Convention Division III Issues Forum, delegates will have an opportunity to receive an in-depth review of budget issues and options, and make recommendations for next steps.
Strategic Planning and Finance Committee Proposals:
|Current Policy||Recommended Change||Estimated Favorable Impact to Championships Budget in 2014-15|
|Reimbursable travel party size is squad size plus five others (plus 10 for football)||Reduce travel party size by 10 percent across all team sports||$1.1 million|
|Host teams receive a half-day per diem on the date of competition||Eliminate host per diem||$481,000|
|Individual per diem at championship events is $95||Reduce per diem to $90||$354,000|
|Schools that host championships at non-predetermined sites currently receive an honorarium ranging from $575 and $1,450 depending on the number of days of competition||Eliminate host honorarium at non-predetermined sites||$186,000|
|No rule pertaining to gap between championship selection and competition dates||Create a minimum three-day window between championship selections and first date of travel to save on airfare||$50,000|
|Total savings: $2.17 million|