98-11-20: OFFICIALS SAY ATHLETICS, ACADEMICS NOT IN CONFLICT By Dan Heuchert Admit it -- you've heard it before, or thought it yourself. "The University is spending $75 million on a football stadium, and I can't even get money for ..." Director of Athletics Terry Holland says he's heard that refrain before, and though he says its understandable, he argues that it's a "misconception." Athletic spending doesn't detract from the University's academic mission, he says, noting that his department is self-sustaining -- that is, it requires no taxpayer funding (although technically, its revenues are turned over to the state, which reallocates them back to the department). As with most entities, the Department of Athletics has separate budgets for capital and operating expenditures. The stadium expansion -- and in the near future, a new arena to replace University Hall -- are capital (building) projects. Under state policy, neither of them will use a penny of state funds; both will be financed by a combination of private gifts, luxury suite sales and bonds, the latter to be repaid from revenues generated by the new facilities themselves. In the stadium's case, revenue bonds supported by both Athletics and Parking and Transportation (which will control a parking garage included in the project) will foot about $35 million of the $75 million bill. Former football player Carl W. Smith made an approximately $20 million gift toward the construction cost (and $3 million to the stadium project at Clinch Valley College), leaving $20 million more to raise, said Robert D. Sweeney, vice president for development. Of that, 25 donors have already contributed $11 million. The proposed new basketball arena will likely have a similar financing plan, although the University is still seeking a leadership gift, Sweeney said. But even if athletics projects don't compete with academic concerns for state funds, do they seduce donors away from academic projects? That's a more complicated issue, Sweeney acknowledged. In the case of Smith, "he was either going to give to Athletics, or he wasn't going to make a gift at that time," he said, adding Smith has a long-term interest in athletics in general and a particular interest in football. Smith has given to several non-athletic areas of the University, including Law, Medicine, Architecture and Business. He also has an interest in Jeffersonian restoration and the Jefferson Scholars program, Sweeney said. In planning the now-$1 billion Campaign for the University, fund-raising for Athletics projects was deliberately scheduled toward the end of the campaign in order to first focus on academic priorities, Sweeney said. Funding for Athletics' capital projects represents less than 10 percent of the overall goal; spending on President John T. Casteen III's major initiatives in the fine arts, sciences, public service and international programs "will dwarf the expenditure made on a new arena," Sweeney said. Donors seem to fall into two groups, he said. One population, mostly alumni, makes a distinction between its philanthropic dollar, which goes to academic priorities, and its entertainment dollar, which goes to Athletics. Many of the University's most generous benefactors fall into this category, including Joshua P. Darden Jr., William H. Goodwin Jr., David A. Harrison III, Thomas A. Saunders III and Smith. The group also includes many smaller donors, who might only give $50 or $100 to both academics and Athletics. The other donor group consists generally of non-alumni from around the state whose contact with the University generally comes through athletics or the hospital, Sweeney said; in the latter case, they are sometimes referred to as "grateful patients." While sports fans' money goes more exclusively toward Athletics, "We're working to engage them in the academic side of the house," Sweeney said. Athletics' capital projects have a direct effect on its operating budget. Only football and men's basketball are money-makers for the department. Ticket sales, television rights, radio advertising revenue, apparel licensing and luxury suite revenue for those sports, plus ticket sales for the other sports, a portion of the Student Activity Fee and gifts, provide the entire revenue side of the Athletics budget, defraying the costs of the 22 non-revenue sports. "The additional ... revenue [from an expanded stadium] will not go to the football program," Sweeney said. "The football program is fully funded already." Instead, it will support the other sports. "One of the reasons we chose to do the stadium first [before the arena] is because of the economic impact, despite a greater need for an arena," Holland said. Of course, all of this begs the question: does the University need a big-time athletic program at all? Can't U.Va. be like an Ivy League school, where athletics are a much lower-profile endeavor? The average Ivy League athletic program draws from its university's general operating revenue, Holland said, because it still has many of the same expenses -- salaries, travel, facilities, equipment -- with much less revenue. "If you're going to compete as one of the best public institutions in this country, you have to have at least an Ivy League-caliber athletic program and the cost of that would be at least $15 million annually," Holland said. "Since our program pays for itself, that is $15 million currently going to academic endeavors that would be siphoned off if we chose to run a program that does not produce revenue." A lower-profile Division III athletic program (think Ferrum College or Emory and Henry) would cost about $5 million per year, but "would not befit the status of a top-five public university," Holland said. Indeed, there seems to be a relationship between schools that are rated highly in academics as well as in athletics. Stanford has won the Sears Directors' Cup, awarded to the top Division I athletic program based upon points awarded in NCAA championship competition, for four of the award's five years of existence. Last season, the other schools in the top five were North Carolina, Florida, UCLA and Michigan. (Virginia finished 13th, but has won a similar competition among state schools, based upon winning percentage, in seven of the 20 years it has been held.) Casteen has made it a goal to push U.Va. into the top 10 of the Sears Cup standings. "His motivation clearly is in terms of institutional advancement," Sweeney said. "I don't think there's any doubt that athletics is a huge piece of the marketing of a university, particularly at the undergraduate level," Holland said, noting that there was an upswing in admissions applications during the career of former men's basketball star Ralph Sampson. Athletics can even have a direct influence upon academics, he said. Some of the proceeds from the football team's participation in the 1991 Sugar Bowl went to Alderman Library. Athletics money helped create the Cavaliers Distinguished Professorships. Approximately 5 percent of the student body is on athletic scholarship, reducing the demand for need-based financial aid. In addition, the Athletics Department has contributed heavily to projects which benefit the student body as a whole, including the Aquatics and Fitness Center (home to the Cavalier swim teams) and the Sheridan Snyder Tennis Center. A bigger football stadium and a new basketball arena should be money-makers in the long run, continuing the Athletics Department's ability to be self-sustaining in the years to come.