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UW athletic department projects $14.8 million deficit for 2016 fiscal year, plus deficits in 2017, 2019

The University of Washington on Friday released financial information and projections for its athletic department, and the numbers are not particularly encouraging.

The department projects a $14.8 million deficit for the 2016 fiscal year, in addition to smaller projected deficits in 2017 and 2019 (with a small surplus in 2018). In a powerpoint presentation (linked) that will be shown to the UW Board of Regents at this month’s meeting, the athletic department cites increased expenses for student athletes, lower-than-projected ticket sales and debt service payments for the renovation of Husky Stadium as the primary reasons for the budget shortfall.

UW says the 2016 deficit will be covered fully by the department’s reserves, but that “this is not a one-year challenge.”

New athletic director Jen Cohen, who was officially appointed to the full-time position in late May, said in a statement that UW has “a lot of work to do” to ensure future financial stability.

“Like most college athletic departments, we have a lot of work to do to ensure a balanced financial future in a new and changing landscape of college athletics,” Cohen said in a statement. “Husky Athletics has a long history of pride about our financial prudence, and we intend to find solutions which keep it that way without changing our core mission of offering a first-class student-athlete experience. We are fortunate to have reserves to cover these projected deficits without impact to campus, but are eager to create a balanced and sustainable athletics budget.”

The deficit is projected to be about $5.6 million in 2017, and about $34,000 by 2019.

The department reported a deficit of $863,136 in the 2015 fiscal year, after debt service payments increased from $14.6 million to $17.5 million, according to the above linked document. The deficit would have been larger if not for a one-time multimedia rights payment of $7.3 million made by the Pac-12 to the UW. According to UW, it is one of three Pac-12 schools -- Stanford and Arizona State are the others -- to enter into an agreement with the Pac-12 to manage media rights when current agreements expire. UW is the only school to accept a signing bonus for doing so, and that bonus (plus interest) can be credited against future distributions from the Pac-12 beginning in 2025.

Athletics plans to reduce expenses by $2 million in 2017, according to the document, “and will explore additional future revenue opportunities before making cuts that would negatively impact student-athlete welfare, competiveness, and equity.”

UW also hopes a new fundraising campaign will raise $1.7 million per year, and projects annual football ticket price increases of 3% through 2017, a one-time price increase of 5% in 2018, then annual 3% increases thereafter. The document also notes that “Don James Center renewals will positively impact revenues for FY17 and FY18,” and that men’s basketball gate revenues currently assumes modest growth.

This is the eighth time in the last 25 years that UW athletics has operated at a deficit.

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