Aided by student fees, GSU stays in black

A recent NCAA report that surveyed the financial states of every Division I school found the two schools, as well as Georgia Southern, to be running in the red. But budgets from the three schools reveal either a profit or a break-even ledger.

Georgia State athletic director Cheryl Levick said, "The bottom line, at the end of the year, I will be expected to balance my budget. I think we've got it planned that we'll do that."

The difference arises over how the schools and the NCAA look at money received from student fees and other sources. The NCAA report regarded student fees and direct or indirect support from the institution and government as "allocated revenue" and did not include that money when determining an athletic department's profitability.

But the schools' accounting methods do include those sources in the revenue ledger, though at least Kennesaw State wants to lessen its dependence on that income.

"If we're really looking at what it costs a university to operate an athletics program, you need to remove the subsidies provided by a university," said Dan Fulks, the Transylvania University professor who compiled the NCAA report.

An argument could be made that student athletics fees are comparable to ticket revenue, as students receive free admission to school games by paying the fees. The difference is that those athletics fees are mandatory, whether students attend games or not.

"What it really amounts to is a tuition increase," said Fulks, a Georgia State alumnus.

Fulks noted that athletic department budgets, which typically account for 5 percent of schools' overall budgets, can bring value to a school in terms of exposure, greater diversity in the student body and increased entrance applications.

On the other hand, at a time when state budgets are tight, not everyone is comfortable with the thought of public money going to intercollegiate athletics. Kennesaw State's athletic department, for example, took $1.5 million in direct support from the state and the school in fiscal 2009, most of it going to fee waivers for out-of-state scholarships and salaries of certain staff members.

But at lower-level Division I schools such as Kennesaw State, Georgia Southern and Georgia State, which do not receive the millions in television rights money or ticket sales that state brethren Georgia and Georgia Tech do, student fees are vital to the athletic department's operations.

At Kennesaw State, student fees accounted for 63 percent of the department's $10.2 million in revenues in fiscal 2009. Georgia State's percentage was 83 percent while Georgia Southern student fees made up 55 percent.

The percentages are not unusual for schools playing FCS (formerly Division I-AA) football or going without football altogether.

By their accounting methods, last year Georgia State turned a $2.3 million profit, Kennesaw State netted almost $700,000 and Georgia Southern broke even.

KSU has had a safeguarding mindset with its funding, no matter the source. The department has routinely finished in the black.

"When your budget gets to zero, stop spending," interim athletic director Scott Whitlock said, echoing an oft-issued admonition from longtime AD Dave Waples.

However, Whitlock wants to wean the department off athletics fees. To that end, the school, which moved to Division I in 2005, will soon begin a search for its first development director for athletics to lead fund-raising.

"To thrive at the Division I level, you cannot be fee-dependent," he said. "You can't put that entire burden on students."

The school's announcement last Tuesday that it intends to field a football team by 2014 will complicate that goal. A football fee of as much as $100 per student each semester could be necessary, Kennesaw State president Daniel Papp said.

That's the reality for Levick, the Georgia State athletic director. A student fee increase has largely funded her school's football team. While she's hardly opposed to an increase in fund-raising support, Levick is willing to rely on student fee money.

Even with the addition of football, "Student fees will still drive our budget," she said.