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September 5, 2012
LSU proposes shared success policy
BATON ROUGE - A policy believed to be unique in major college sports that would ensure that the academic mission of LSU would share in the financial success of the LSU athletics program will be considered Friday by the LSU Board of Supervisors.
The LSU Athletics Fund Transfer Policy would formalize an annual transfer of $7.2 million from the Athletic Department to other components of LSU for use in supporting LSU's academic, research, public service and other missions. In addition, it would establish a revenue sharing component that could provide additional funds to the university's mission and ensure that all facets of LSU share in the success of the athletics program.
"I am not aware of another university that has formalized a financial agreement such as this one," said William Jenkins, interim president and chancellor at LSU. "The University has long been a beneficiary of the success of our financially self-sustaining athletics program, but this policy will solidify the connection between athletic success and advancement of the university's academic mission."
Over the years, various informal practices have been adopted for the transfer of funds from the Athletic Department to other components of LSU. As LSU has faced increasing budget pressures over recent years, fund transfers from Athletics to other components of LSU have increased. Most recently, the Athletic Department transferred an additional $4 million and assumed financial responsibility for the Academic Center for Student-Athletes at the cost of approximately $1.5 million to help offset a shortage in the university budget, staving off budget cuts and potential faculty and staff layoffs.
"It is important for an athletics program to play a role in the overall success of the University, and this policy breaks new ground in establishing the role of LSU Athletics in the mission of LSU," said Joe Alleva, Vice Chancellor and Director of Athletics. "LSU Athletics has long-been a financially self-sustaining program and has transferred significant funds to the core mission of the university each year. This policy will take that support to an entirely new level."
Over the initial five-year term of the policy, LSU Athletics will provide $36 million to other parts of LSU. In addition, in years in which the athletics program generates a surplus, a portion of the surplus would be transferred to other components of LSU, with the remainder of the surplus being used to fund reserve accounts to protect against future financial uncertainties and provide a funding source for long-deferred maintenance projects for athletics facilities.
The first $3 million of any surplus will be devoted strictly to athletics reserve accounts. Of any surplus between $3 million and $5 million, 75 percent will be devoted to athletics reserve accounts and the remaining 25 percent would be transferred to other parts of LSU. Any surplus above $5 million will be split equally between athletics and the rest of the university.
"There are some promising financial developments on the horizon for universities that participate in major college athletics, including potential new television revenues and additional revenues from a revised Bowl Championship Series that begins in 2014," said Alleva. "This policy sets the stage for the academic mission of LSU to benefit from these future developments."
The proposed policy does not affect the current sharing of LSU trademark licensing revenue, which will continue to be split equally between athletics and the rest of the university, nor does it affect the payment of tuition by the Athletic Department for scholarship student-athletes, nor payments by the Athletic Department for utilities and similar direct services provided by other components of LSU to the Athletic Department.