The Washington State University Athletic Department finished the fiscal year a school-record $6.624,951 in the red, according to figures released this week.
The deficit covers the period ending June 30. Most colleges lose money on intercollegiate athletics, but the Cougars turned a profit eight consecutive years before suffering losses the past four (including $861,547 in fiscal year 2011).
Athletic director Bill Moos said the hiring of football coach Mike Leach (for a school-record $2.25 million a year) and increased salaries for assistant football coaches played a role in the deficit.
“We couldn’t wait a year because he (Leach) wasn’t going to be around,” Moos said Wednesday.
Revenues increased from $37.5 million to $39.3 million, but employee salaries, wages and benefits increased from $13.8 million to $17.4 million. Also, the first payments ($670,000) were made on bonds that provided most of the financing for a pair of $60 million-plus football projects: Improvements at Martin Stadium that were completed this year, and construction of WSU’s first football operations building, which has just begun.
Moos said he has based many financial decisions on a massive increase in future television revenue resulting from the creation of the Pac-12 Networks this year.
Moos has estimated each Pacific-12 Conference school could eventually bring in more than $20 million a year from the Pac-12 Networks. For the coming fiscal year, however, Moos estimates schools could net from “zero” to several million dollars, due to start-up costs and the failure to reach contract agreements with some carriers (notably DirecTV).
Asked about the status of negotiations with DirecTV, Moos said, “I think both sides are standing pretty firm. We’ve got to be patient, and we are.”
Moos said it will take “at least two or three years” for the Cougars to turn a profit again. The Cougars plan to reduce debt during the current fiscal year, Moos said, with the aid of increased income from football season ticket sales, Cougar Athletic Fund donations and premium seating added to Martin Stadium.
Unlike athletic departments at public schools in some states, Washington schools receive little state support. The Cougars received $5.8 million from the state for fiscal year 2012, including nearly $3 million for gender equity waivers (women’s scholarships).