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University of Iowa athletics loses money for second year

Winning 2015 football season, with low ticket sales at the start and coach bonuses at the end, blamed for deficit

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For the second year in a row, the University of Iowa Athletics Department has reported losing money — but for completely different reasons.

According to a financial statement submitted to the NCAA and obtained by The Gazette via an open-records request, the UI reported a loss of $2.9 million for the year that ended June 30, 2016.

This was the year the Hawkeye football team went 12-0 in the regular season, won the Big Ten’s West Division and played in the Rose Bowl. So why did the athletics department end the year in the red?

“The deficit is a result from the combination of lower football ticket revenue and the increase in expenses for football bonuses in the 2015 season,” Greg Davies, assistant athletics director and chief financial officer for the department, wrote in an email.

Enthusiasm for Hawkeye football was lower than usual at the start of the 2015 season. A June 2015 story from The Gazette’s Marc Morehouse reported season tickets at that time were down 17 percent from the previous year. UI sold $19.5 million in football tickets for the 2015 season, about $2.3 million less than the $21.8 million sold during the 2014 season, the NCAA report shows.

But although ticket sales were low, the undefeated season triggered performance bonuses for coaches.

Head football coach Kirk Ferentz, for example, picked up an extra $1 million in 2015 for milestones that included going undefeated, finishing ranked in the top 10, going to a New Year’s Day bowl game, being named coach of the year and having a team graduation rate of at least 70 percent.

UI coaching salaries, bonuses and benefits totaled $20.3 million for fiscal 2016, up from $18.2 million the previous year, reports shows.

In fiscal 2015, UI athletics reported a $3.24 million shortfall, which athletics director Gary Barta said was a “cash flow issue” as the department paid for the new $55 million football operations facility, which became fully operational after the 2014 football season.

“The numbers on the 2014-15 final budget were a result of the timing of some capital projects expenses in which the revenue was recorded in the previous year,” Steve Roe, UI director of athletics communications, wrote in an email to The Gazette this week. “The budget totals for 2014-15 and 2015-16 were due to circumstances that were not related.”

If two years of losses concern UI supporters, Roe said not to worry.

“The budget in each year was covered by athletic department reserve funds,” he said. “We fully anticipate a balanced budget moving forward.”

Iowa State University made a small profit — $76,191 — after expenses in fiscal 2016, while the University of Northern Iowa lost $765,333, according to those schools’ reports to the NCAA.

UNI Athletics Director David Harris, who started in the position in March, said Friday the deficit in fiscal 2016 resulted from not selling as many tickets for football and basketball as anticipated and higher-than-expected travel costs for postseason tournaments. UNI also paid out coaching incentives for postseason play, Harris said.

“There shouldn’t be any surprises (this year),” Harris. “Our goal is to balance the budget.”

Iowa Sen. David Johnson, an Ocheyedan independent, last month introduced legislation, Senate File 95, that would require UI and ISU athletics departments to fork over a total $4.3 million in each of the next five years to UNI’s athletics department to replace money UNI is now paying to help support athletics there.

“Athletics at the University of Northern Iowa should not be subsidized by student tuition and any general fund money,” Johnson said in a Jan. 18 story by The Gazette’s Rod Boshart. “This is a way to be good neighbors in the public university system. Since the athletic budgets are so much larger at Iowa and Iowa State, they should help provide a little bit of tuition relief at UNI.”

Direct institutional support from UNI (the school) contributed nearly one-quarter, or $4.3 million, to the UNI Athletics Department’s total operating revenue of $17.7 million in fiscal 2016, the department’s NCAA report shows. UI and ISU do not receive direct institutional support from their academic institutions.

Harris didn’t have extensive comment on the Johnson proposal. “As a university and athletic department, we just ask for the appropriation we asked for to the Board of Regents and the Legislature,” he said.

l Comments: (319) 339-3157; erin.jordan@thegazette.com

Athletic Dept. financials to NCAA for 2015-16

Chart by John McGlothlen / The Gazette

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