Photo by Andrew Shurtleff

U.Va.’s Keith Jenifer

January 10, 2003

By Dan Heuchert

Eroding budgets. Crumbling buildings. Travel restrictions. Larger classes. No raises (again). And then to see plans for a shiny new basketball arena …

It makes some faculty members want to scream. Or at least to pass a resolution asking the University to cease and desist, as was proposed at a rare Assembly of Professors in October. Though the resolution was tabled, at least partly at the behest of University President John T. Casteen III, the message was clear: Some professors are displeased with the prospect of spending $129.8 million on a new arena in these budget-conscious days.

Craig Littlepage wants faculty and staff to know that he understands their skepticism.

"When faculty are operating in this environment of being expected to do more with less, and in some cases doing it in facilities that are deficient — much like University Hall is deficient — certainly, they look at the building of an athletic facility from a somewhat perplexed attitude," said Littlepage, U.Va.’s director of athletics.

Athletic Financing 101

Much of the resentment toward the arena project, he said, appears to be based on a misconception of how athletics are financed at the University. As an auxiliary enterprise, the Department of Athletics receives no state funds for either its operating or capital budgets, and must generate its own revenue. Thus, the arena does not — cannot — compete with academic facilities or faculty and staff salaries for either state funds or tuition money.

Instead, the athletic department’s $33 million operating budget is funded through a variety of other sources. For the fiscal year that ended June 30, the largest revenue source was distributions from the National Collegiate Athletic Association (mostly television rights fees for the NCAA men’s basketball tournament) and the Atlantic Coast Conference (TV rights fees and a share of football bowl revenues). Other major revenue sources included private fund-raising support, ticket sales, a portion of student activities fees (funding intramural sports and students’ free admission to athletic contests) and corporate sponsorships.

In fact, the athletic department feeds funds into the academic side. Its second-largest expense, after salaries, is scholarships for student-athletes — more than $6.3 million in tuition paid to the University. Athletics also pays more than $1.1 million to the University for overhead. In the past, the department has made one-time contributions from football bowl-game payouts that were used to establish the Cavalier Distinguished Teaching Professorship, install the ISIS telephone course-registration system, equip computer labs, and, in a similar economic crisis, to sustain the library’s journal subscriptions.

Two sports, football and men’s basketball, generate enough money to support the other 23 (including women’s golf, which begins play next fall). Expanding the football stadium and adding 56 luxury suites helped athletics finish in the black last year after a string of small deficits eroded reserves, an accomplishment of which Littlepage is particularly proud.

"Relative to the competition, we’re under-funded," he said, pointing out that many schools offer fewer sports and have larger budgets. "The success that we had coming in under budget with the number of sports we have shows resourcefulness on the part of our department."

A new basketball arena is expected to boost the bottom line. Season tickets to men’s basketball games in University Hall are perennially sold out, so additional seats should bring in more revenue, even if they are not filled for every game. More importantly, luxury suites and other premium seating, not available in U-Hall, should add new revenue streams.

Nonetheless, Littlepage emphasized that there is more than monetary justification for the arena.
University Hall opened in 1965 and has not been substantially modified since. At 8,394 seats, it is the smallest in the Atlantic Coast Conference. There are insufficient concessions, restrooms, practice space and office space. There is no air conditioning. "Everything about this building … is deficient in terms of what we as a University and this region need, and obviously what our basketball programs need," Littlepage said, noting that every other ACC school has upgraded its basketball facilities within the last 25 years.

Expanding U-Hall is not financially or architecturally feasible, he said.

He foresees the replacement arena as a versatile building, capable of holding large crowds for speakers, concerts, graduations (in case of rain) and other major events. "We are not going to look at this facility as one where we will try to have an event in there every night of the week so that we can generate revenue," Littlepage said. "We want to be able to do the things that we are currently unable to do."

Diverted dollars?

Religious studies professor Harry Gamble, who introduced the stop-the-arena resolution at October’s Assembly of Professors, acknowledges U-Hall’s inadequacy. "Given the state of U-Hall, and given the competition against the University wants to succeed in its basketball programs, they have certainly justified the need for a new arena in the abstract," he said.

However, Gamble questions the timing of the major fund-raising effort needed to finance construction, which comes even as "our academic buildings fall down around our ears." He fears that benefactors will divert money from giving for academic purposes toward the arena.
"The University needs to prioritize those needs in a way that is consonant with our overall mission," he said.

Robert D. Sweeney, senior vice president for development and public affairs, sharply disagrees with the diverted-dollars theory. Of the 25,000 people who gave gifts or pledges of $1,000 or more to the recently concluded capital campaign, only about 1,000, or 4 percent, gave to the stadium expansion, he noted. Many of the University’s largest athletic benefactors — among them, the late David A Harrison III, William F. Goodwin, Thomas A. Saunders and Paul Tudor Jones — have given significantly, if not more generously, to academics.

"It’s not a zero-sum game," Sweeney said. "These are additional gifts being made by many people. I don’t know of a single instance where the issue was either give to athletics or something else. … Giving on the athletics side, at least from the major donors whom I have known, is given out of another pocket somehow."

Athletics is a tool that can be used to foster giving in other areas of the University, Sweeney said. Many donors began their giving relationships with the University by making donations to the Virginia Student Aid Foundation — recently broadened in scope and renamed the Virginia Athletics Foundation — in order to secure tickets to football and basketball games, and later expand the scope of their giving to include other areas of the University, Sweeney said.
The arena project is only one of several big-ticket items on the fund-raising agenda, he said. "We are just as aggressively pursuing these other projects," including about $200 million for the Arts Grounds project, at least $142 million for the South Lawn Project, and a major initiative to build a top-five cancer center, projected to cost another $200 million.

Overcoming Suspicions

So, if there is less competition for resources between academics and athletics than many faculty believe, why does something like a new arena or a stadium expansion arouse such hostility among some elements of the faculty?

Carolyn Callahan has feet planted in both sides of the issue. As a professor in the Curry School of Education, she experiences firsthand the budget privations being felt by faculty members. She also chairs the athletics advisory committee and is U.Va.’s faculty representative to the NCAA, and serves as the formal liaison between the faculty and the athletic department.

"I think fundamentally it doesn’t matter to faculty how it’s funded," she said. "There are perception issues that are strong and deeply felt. …Even when I do explain [athletic needs] to them, they have a really hard time accepting that I’m telling the truth."

Athletics has not done a good job of communicating with faculty members, she said, noting that before she joined the athletic advisory committee, she had little knowledge of the department’s structure and financial picture. "I think the whole athletic department is a big secret to the rest of the University," she said.

Gamble agrees. "There’s just a structural fault line between the faculty and athletic department," he said. "I don’t think all the good communication in the world is going to do away with it."

Despite describing himself as "enthusiastic about intercollegiate sports," Gamble sees the arena — and the stadium expansion before it — as symbolically important.

"The whole issue projects to the public, as well as to the University itself, an image of what the University aspires to be. It looks as if the University aspires more to athletic success than to academic success."

But are athletic and academic success necessarily competing priorities? Some evidence suggests not. The five top-ranked public schools in the most recent U.S. News & World Report survey — UC Berkeley, Virginia, UCLA, Michigan and North Carolina — all appeared in the top 30 of the standings in the race for the 2001-02 Sears Cup, awarded to the school with the best overall finishes in the various NCAA sports championships. Sears Cup winner Stanford tied for fourth in the overall U.S. News rankings.

"Our goal would be, how do we create excellence in academics and athletics and ethics and all of those things?" Sweeney said. "We ought to be looking at being among the best – not winning every championship, but being seen as extraordinarily competitive, probably in the top 10 of the Sears Cup, while at the same time being in the black, having a strong value system and having major access" for both men and women.

The athletic department recently commissioned a public relations and marketing survey of several constituent groups, including faculty, students, alumni, donors, student-athletes, coaches and business leaders. Virtually all of the groups viewed the University as having struck an appropriate balance between athletics and academics. They all strongly cautioned the University against the appearance of having sold out its values in pursuit of athletic success.

Message received, Littlepage said. "The one thing that we heard as a common theme over and over again is it wouldn’t be worth it to pursue excellence, to try to win in a national context, if our students weren't graduating, if our students weren't doing their job as members of the University community, if we were breaking rules, our coaches and others. Winning is important and being successful is important, but also doing it the right way is even more important."