Hawkeyes, Cyclones expect 2023 to be strongest budget year ever

IOWA CITY — A year after University of Iowa Athletics reported a $42.9 million deficit and Iowa State University Athletics reported spending $17 million more than it made — both due to pandemic-related losses — the Hawkeyes and Cyclones are each predicting the 2023 budget year will be their most lucrative to date.

Fiscal 2023 budget documents the Board of Regents will discuss next week show UI Athletics expects to generate nearly $129 million in revenue — up nearly $12 million, or 10 percent, over the budget year that just ended in June.

ISU expects to see $106.2 million in revenue in the fiscal year that began July 1, marking the athletic program’s first time topping $100 million in revenue.

The University of Northern Iowa Athletics is looking at a modest year-over-year increase of $179,565 to $14.7 million — although that’s not a record, as the Panthers reported $15.6 million in revenue in the 2021 budget year.

Because UNI Athletics is not financially independent like at the UI and ISU, the main campus that year contributed nearly $8 million to its athletics operation, plus another $1.3 million in athletic scholarship support. This year, UNI’s main campus is expected to contribute $4.6 million to its athletics operations and scholarships.

If realized, the Hawkeyes’ record $129 million budget would more than double the $60.7 million in revenue generated in fiscal 2021 — when the program saw no football, basketball, wrestling or volleyball ticket revenue due to pandemic restrictions.

It also would top the pre-pandemic revenue peak in the 2019 budget year of $122.3 million by $6.7 million, or 5 percent. And it would come in $49.6 million over the $79.4 million in revenue that UI Athletics reported a decade ago in fiscal 2013 — a 62 percent spike.

A big reason for athletic revenue increases are spikes in multimedia contracts and athletic conference contributions, expected to reach $7.9 million and $57 million respectively for UI this year — compared with $5.7 million and $26.3 million in 2014.

“Most primary revenue sources are anticipated to increase in FY 2023,” according to UI Athletics’ portion of the regent budget documents. “These include football ticket sales due to a favorable home schedule, multimedia income from having complete sport seasons and a rebound in sponsorship sales, athletic conference distributions from additional television revenue, and foundation support due to private support for both the men’s and women’s wrestling programs.”

UI Athletics’ losses during the height of COVID-19 prompted the typically self-sustaining enterprise to eliminate three men’s sports — gymnastics, tennis and swimming and diving — and to ask the main UI campus for a $50 million loan, which it could be paying off into 2036, according to an agreement.

Details about how much UI Athletics has paid to date toward that loan weren’t immediately available and were not mentioned in the regent documents.

The Athletic Department did report expectations it will pay $22.5 million this year for UI services like parking, utilities, public safety, hospital, scholarship and residence system use.

Big budget picture

The athletics budgets at UI and ISU — along with the campus’ housing and dining operations — are separate from their general education budgets, which are primarily supported by tuition and state appropriations.

After state lawmakers in the 2021 budget year cut regent appropriations by $7 million and offered no funding increase in the budget year that just ended, lawmakers approved a $5.5 million general education funding increase for fiscal 2023 — far short of the regents’ requested $15 million bump.

Thus, regents next week will consider approving a 4.25 percent tuition increase for all resident and non-resident undergraduate and graduate students at ISU and the University of Northern Iowa. The UI will impose the 4.25 percent hike for all resident students, but keep increases for nonresidents to 1.2 percent at the undergraduate level and 1.5 percent at the graduate level.

The relationship between those two main funding sources has created a seesaw effect. State appropriations accounted for 76 percent of the regents’ university general education funding in 1981, when tuition revenue accounted for about 21 percent of the total. Today, the opposite is true, with tuition accounting for 64 percent of general education funds and appropriations accounting for 31 percent.

The total budget for the regent enterprise this year — including general education dollars, UI Health Care operations and restricted budgets belonging to entities like athletics and housing — is expected to top $6.9 billion. That’s up from $6.4 billion last year and $6.3 billion in the 2021 budget year.

The UI’s 2023 general fund operating budget — including its health care operation and special purpose units, like the State Hygienic Lab, is nearly $3 billion. ISU’s is $748 million and UNI’s is $177.1 million.

Balanced budgets

ISU Athletics, like the UI, is expecting stronger revenue than ever before — although the UI is eyeing an increase in football revenue due to an advantageous home schedule, while ISU is predicting a slight drop in football income because its home schedule doesn’t include in-state opponents at Jack Trice Stadium.

Both campuses expect stronger philanthropic support this year — with ISU’s foundation contributions climbing from $22.8 to $30.1 million and UI’s swelling from $12 to $16.7 million.

UI and ISU Athletics expect to end fiscal 2023 with balanced budgets — meaning they plan to spend more this year, too.

The UI notes increases tied to salary bumps, additional travel, student-athlete mental health services and the development of a new women’s wrestling team, which cost $762,000, according to regent documents.

ISU is eyeing expense increases for sports nutrition, building renovations and salaries and benefits.

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