Since 2016, the deficit in the athletic fund has drastically increased and Winthrop is doing what it can to turn things around.
By Omar Woods
Sports Editor
Sports
During April in 2024, the issue of the Athletic Fund deficit became apparent to the Athletics Department. Each FY, or fiscal year, at Winthrop goes from July 1st. to June. 30.
In FY2016, Winthrop reported that their deficit was about $4,000. At the beginning of FY2021, that number climbed to a staggering $2.9 million.
The deficits in the Athletic fund have also been a contributor in the Student Activities fund deficit.
In an collaborative email sent by the Vice President for Finance and Business Affairs Kevin Butler and the Athletic Director Chuck Rey, they discussed what funds were reportedly in a deficit situation.
“At the close of the fiscal year ending June 30, 2024, there were two university funds that were reported in a deficit situation,” the email said. “One was the athletics scholarship fund. The other was the Student Activities fund, from which the core expenses of the Athletics Department are funded, along with other campus life activities.”
According to a board executive session, the athletic fund receives its revenue from a variety of sources. These sources include, but are not limited to, sponsorships, ticket sales, camps, guarantees, and contributions from the NCAA.
In the documents that were obtained by The Johnsonian, context behind what caused both of these fund deficits can be evaluated.
Causes of the deficit
What started the issue of the deficit has been attributed to the amount of athletic scholarships given out in the past three fiscal years. These documents identified athletics as a main cause of the deficit due to limited guardrails which allowed for the scholarship overrun.
In FY2024 specifically, the only sports, including E-sports, that did not overrun their budget were women’s basketball, women’s soccer, and volleyball.
In the document, it stated that at the time, the lack of managers in the department allowed individual coaches to make scholarship offers.
“Coaches have been making scholarship offers without a limit or review process before scholarships are posted,” the document said.
“No internal monitoring of offers within Athletics was taking place.”
In the same email sent by Butler and Rey, they explained the causes of why the athletic scholarships were adding to the athletic fund deficit.
“In terms of the Athletic Scholarship Deficit, as enrollment at Winthrop declined, so did the amount the university could contribute, not only for athletic scholarships, but all scholarships,” the email said. “To remain competitive in Division 1 (note that we are below average in our athletics grant-in-aid in comparison to other Big South schools), Athletics continued to provide roughly the same amount of scholarships every year.”
The documents mentioned that most of the deficit did not come from the Athletics department overspending their given budget. It mainly stated that the issue was that while the budget for Athletics increased, the revenue generated towards the Activity Fee declined.
The COVID-19 pandemic was also stated to be a main cause that has led to the athletic deficit. Universities and colleges experienced large drops in attendance during and after the pandemic.
One page of the documents showed that two senior men’s soccer players stayed for their COVID year. Also on the same page, it said that there was a half scholarship that carried over after the pandemic that came from a women’s softball athlete during fiscal year 2022 to 2024.
Another part of the documents indicated that both men’s and women’s basketball distributed more money than their scholarships officially allotted, with men’s basketball having a cap of 13 while women’s basketball cap is 15.
“There are a few factors that caused the overrun: Basketball used more of their allotted scholarships (13 for men and 15 for women),” the document said.
It also stated that both basketball programs rarely use all of their allotted scholarships, but the extra COVID year was the cause of them going over their scholarship cap.
The email sent by Butler and Rey further discussed a direct connection between the pandemic, lower attendance rates, and the fund deficits at Winthrop.
“The deficit in the Student Activity fund is attributable to two main causes: the expanded cost to maintain NCAA Division I’s required minimum of 12 athletic programs in an environment of rising costs, particularly the increasing expense of team travel, and lower enrollments in the wake of the pandemic which generated less Student Activity Fee income,” the email said.
“There is a direct connection between the pandemic and both rising prices and lower enrollments throughout higher education.”
Esports is another sport that was reported to be at a deficit. However, this deficit seems to stem from an entirely different reason altogether.
One specific page of the documents that detailed the esports fund deficit explained why they ended up going over budget for FY24. It stated that because of the positive revenue generated from E-sports in FY22, the budget was “accepted on the basis of increased enrollment.”
It later states that the “new esports space delayed opening until November 2023.” Due to this delay, Winthrop was unable to recruit new students for the program.
The budget for Esports in FY24 was $637,308. In FY24, it was reported that the program had spent $998,717.
Winthrop’s Current Plan Against The Deficit
Starting in FY2024, Winthrop has been taking action against the growing deficit. The email sent by Butler and Rey discussed potential solutions.
“Enrollment at Winthrop has been increasing significantly over the past few years. In addition, the university moved to a different tuition model beginning this academic year, as part of its Tuition Transparency Initiative,” the email said.
“The amount of the Student Activity Fee and other fees that were previously bundled in one tuition amount were separated out. This provided an opportunity to adjust that particular fee allocation to a more sustainable budget at no increased cost to the students.”
The documents further expressed and detailed the strategy to incorporate a more secure and stable system to the athletic scholarship process.
This would include having meetings with the head coaches of each team in order to review scholarship amounts for that academic year and creating “an external three-way checks and balances structure between Business Office, Athletics, and Financial Aid” in order to account for fund availability of scholarships.
The document also proposed that each sports team should have a reserve account or budget for 5th years to account for athletes that may redshirt for their athletic season. According to the documents, this process would also cause no disruption to the recruiting processes.
The email sent by Butler and Rey also explained the plans and methods set in place for the prevention of there being an Athletic fund deficit in the future. They also mentioned a specific name the university gave the strategic plan aimed towards athletic scholarships.
“The methods Winthrop now uses to create its annual budgets, coupled with increased monitoring, will ensure that not only will these deficits be contained, they will erode over time,” the email said.
“In addition, Athletics has worked diligently in recent years to increase its overall revenue to help reduce the institution’s total financial commitment to athletic scholarships. This is in alignment with the university’s strategic plan, Winthrop: United in Excellence.”
