Debt, revenue challenges for new AD
A day after Cal athletic director Mike Williams announced his intention to step down when his contract ends in May, the university on Wednesday started prepping to find a successor ready to deal with the quagmires facing the sports department.
And that list of problems is long. The university will hire its next AD amid a financial crisis, dipping alumni satisfaction and tickets sales, and with first-year head coaches leading its two biggest revenue-generating sports: football and men’s basketball.
New Chancellor Carol Christ has been adamant about a campus-wide neutralization of debt by 2020, and that goal will be a colossal task for the athletic department. It lost more than $20 million in the past fiscal year, largely because of debt from a nearly $500 million renovation of Memorial
Stadium from 2010 to ’12.
According to Bloomberg, Cal’s annual debt service is $18 million until 2032, when it jumps to $26 million and rises until the payments peak at $37 million in 2039. The athletic department plans to pay off the full sum by 2053, though the loan extends to 2112.
In her back-to-school news conference, Christ said that cutting entire sports is a “last resort” and that the university may assume a large portion of the athletic department’s stadium debt — despite faculty opposition.
The university has not specified a timeline for hiring Williams’ replacement or decided whether to employ an outside search firm. Williams said Tuesday that he was prepared to stay on as long as Christ deemed necessary for the transition.
“The last thing anyone needs is two ADs, but I’m fully prepared to help in whatever way the chancellor would like,” Williams said. “I’ve formed real strong connections, and it feels like we’re turning the page. … It’s time to think about different leadership.”
Said university spokesman Dan Mogulof: “We greatly appreciate that Mike Williams has provided the campus with ample advance notice of his intention to step down when his current contract ends in May 2018. This will allow us to continue our work on achieving a balanced budget for Cal Athletics, even as we begin to prepare for the transition.”
Cal sports are considering trimming roster sizes and outof-state travel in an effort to remove about $4.65 million from the 2017-18 budget. As a means for long-term revenue strategies, the school is studying relocating the track and soccer programs to allow the campus to construct residential housing at Edwards Stadium, seeking a naming sponsor for Memorial Stadium and selling alcohol at football and basketball games.
Ten-year partnerships with Under Armour (apparel) and Learfield (multimedia rights and licensing) took effect July 1 and will provide $7 million to $8 million more annually than previous agreements in those areas. In August 2016, a football game against Hawaii in Sydney, Australia, generated about $1 million more than a typical home nonconference contest.
Williams helped lead the construction of Underhill Field for the field hockey team, which helped avoid a possible Title IX lawsuit. He also guided the football program from the conference’s basement academically to first place, according to the latest Academic Progress Rate scores (2015-16).
As ticket sales have steadily declined for the revenue sports (football and basketball) and engagement with new donors has stalled, leadership for those programs has turned over. Williams hired head football coach Justin Wilcox and head men’s basketball coach Wyking Jones within the past eight months.
“Mike has done an extraordinary job supporting and improving the academic performance of Cal Athletics’ studentathletes,” Christ said in a statement. “He has shown an unwavering commitment to their welfare and to the quality of their experiences in the classroom and their competitive arenas.
“I deeply appreciate his service to the university.”