TLDR:
Jake Curtis of Sports Illustrated reports that Cal Athletics is facing a grim financial situation as it prepares to join the Atlantic Coast Conference next fall. The combined deficit of Cal and UCLA’s athletic departments in fiscal year 2023, excluding contributions from the universities’ central campus, was over $80 million. The financial situation at Cal is reportedly worse than that of UCLA. The new Cal chancellor will have to address these financial challenges as current chancellor Carol Christ is set to leave office in May.
The article highlights that Cal reported $126.1 million in revenue for fiscal year 2023, but had $134.9 million in expenses, resulting in an $8.8 million deficit. Expenses, including salaries for coaches and administration, rose by 17.8% from the previous fiscal year. The Cal central campus contributed $36.7 million to help minimize the deficit.
Wilner suggests that the financial picture for the upcoming fiscal year might be worse due to increased travel costs and other issues associated with Cal’s move to the ACC. Cal and Stanford are reportedly set to receive only 30% shares of the ACC’s media rights revenue for the next seven years, significantly less than the $25 million that other ACC schools will receive.
The article also mentions the possibility of UCLA providing a subsidy to Cal based on UCLA’s increased revenue from joining the Big Ten. The University of California Board of Regents has not declared the exact amount of the subsidy, but it was previously mentioned to be between $2 million to $10 million.
The financial challenges also do not take into account potential legal challenges to the NCAA that may require the conferences and their members to make payments. The next Cal chancellor will need to find solutions for the athletic department’s financial burden, potentially including the need to cut sports, something Chancellor Christ previously denied.
The article concludes by highlighting the changing role of college presidents in relation to athletics. Washington State president Kirk Schulz emphasizes the importance of presidents having a strategic relationship with athletic directors and being informed about the business side of college sports.
