Why a Pre-Budget Assessment Matters in College Athletics

In college athletics, being proactive about financial management is more important than ever. Athletic departments face new challenges and opportunities, such as those presented by institutional involvement in name, image and likeness (NIL) and the financial ramifications of the NCAA v. House settlement.

Taking a proactive approach to understanding and managing spending is crucial. And a good way to do that is with a pre-budget assessment — an intentional evaluation done before you submit your budget requests to campus.

Understanding Spend Culture

The spend culture within a college athletic department and across individual sports plays a pivotal role in shaping financial strategies and outcomes. Each sport may have unique spending habits and priorities, which can significantly impact the overall budget.

Understanding these nuances is essential for creating a cohesive financial plan that supports the department’s strategic goals. By examining the spending culture, departments can identify areas where resources are being used efficiently and where there might be opportunities for optimization.

Before approaching campus leadership with requests for additional institutional support, ’’is crucial to proactively ensure the athletic department’s financial needs are clearly understood and strategically aligned with both departmental goals and university priorities. This allows departments to present a well-informed case that highlights fiscal responsibility and strategic foresight.

The Importance of Being Proactive

Conducting a pre-budget assessment (and other proactive methods) provides several benefits.

Strategic Alignment

A pre-budget assessment ensures your department’s financial practices align with strategic goals. This alignment is not just about balancing the books; it’s about positioning your department to thrive in a competitive environment.

Transparency and Accountability

A clear financial reporting model is essential. It differentiates between self-generated revenues and institutional support, providing clarity to stakeholders and fostering accountability.

Managing Expenditure Growth

A pre-budget assessment helps anticipate trends in rising costs—such as salaries, travel and medical staffing in addition to the addition of athlete compensation. This proactive approach ensures competitiveness without unnecessary overspending.

Case Study: A University’s Journey

Before recent changes in athlete compensation structures, one university faced a critical decision regarding its athletic department’s financial strategy. Initially advised to increase spending across all sports to match peer institutions’ success, they found themselves tied to an unbalanced budget with substantial requests for additional support.

Recognizing the need for a more nuanced approach, they sought our expertise to reassess their spending culture. The university president emphasized the necessity to stay within budget, advocating for expense optimization as a cornerstone of future planning.

Our task was to understand the decision-making around expenses by sport administrators and other department leaders and outline a comprehensive strategy for optimizing the department’s expenses while aligning with the broader concerns of university leadership.

After our pre-budget assessment, we believed the financial growth and expense decisions made by the athletic department were substantiated and valid and the budget requests were reasonable. However, we identified areas that should be prioritized to take action.

Key Findings

• Tone at the top: The athletic department’s leadership demonstrated a strong commitment to fiscal responsibility. However, there was a lack of alignment between spending practices and strategic priorities.
• Inequitable comparisons: Comparing against more established programs without considering the university’s starting point led to unrealistic expectations and strategies.
• Economic factors: Industry-wide trends like rising coaches’ salaries and increased travel and nutrition costs necessitated a strategic approach to budgeting.
• Need for strategic alignment: The athletic department needed to determine which sports aligned with its vision and offered the best ROI rather than attempting to climb to the top in all areas.

Recommendations for Change

Our pre-budget assessment identified several areas for immediate improvement:

• Transparency enhancements: Implementing tools to provide greater transparency for sport administrators and coaches was crucial. This included real-time access to budget data to facilitate informed decision-making.
• Policy revisions: Revisiting both formal and informal practices, particularly around travel and nutrition, was necessary. Outdated policies needed refreshing to ensure efficiency and equity.
• Strategic investment evaluation: The relationship between athletics and the broader university ecosystem is complex. Clarifying this relationship can catalyze more supportive partnerships.

Looking Ahead

Being nimble is the name of the game in the next generation of collegiate athletics. The pending NCAA v. House settlement presents both challenges and opportunities for institutions. By adopting a forward-looking approach that emphasizes strategic alignment, transparency and accountability, departments can navigate this situation effectively. Institutions must move away from a one-size-fits-all approach and focus on tailored strategies that reflect their unique goals and circumstances.

As you prepare for these changes, consider engaging in a comprehensive pre-budget assessment to ensure future funding requests are backed by well-considered financial strategies focused on continuous improvement and optimization. By doing so, your department can maintain competitiveness while upholding fiscal responsibility — ultimately enhancing its contribution to the university’s mission of excellence.

For those seeking guidance on these complexities, our collegiate athletics team offers a tailored pre-budget assessment designed to address your unique challenges and opportunities. We bring unique insights into how institutions successfully collaborate with their campuses. Our experience allows us to offer creative solutions and strategies that may not have been previously considered, particularly in securing institutional support.

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