Mondays with the Faculty
Once a month during the academic year, I attend a meeting of the Faculty Council. On every agenda, there’s an item called “Questions to the President.” Sometimes these questions lead to very spirited conversations.
I thought Tower Talk readers might be interested in some of the topics that were on the faculty’s mind this week.
The first order of business was a group portrait of the Faculty Council.
Faculty Council members were curious about the distribution of faculty raises. Roughly one-third of tenure and tenure-track faculty received raises in January. These raises were primarily used to address structural concerns in our salary budget resulting from gender and equity issues, salary compression, and competitiveness. The Office of the Provost will post more information on its website when it has made a more detailed analysis.
The Faculty Council passed a resolution thanking the Regents “for their unanimous vote to retain the Brackenridge Field Laboratory at its present location.” Provost Steve Leslie, Dean Mary Ann Rankin, and I were also thanked for our efforts to preserve the Brackenridge Field Lab.
Also on the agenda was a request for more information regarding the Intercollegiate Athletics budget and trademark licensing income. Here’s a summary of my comments with a few extra facts added for clarity.
For this discussion, I referred to 2008-09, the most recent fiscal year for which we have actual data on revenues and expenses. Intercollegiate Athletics had revenues of $110.7 million in 2008-09 and total payments of $107.3 million. That left an excess of $3.4 million, which was retained as cash reserves.
I was asked to explain trademark licensing, which is generated by licensed products such as apparel, jewelry, and souvenirs. Trademark licensing, which is managed by Athletics, had revenues of $7.8 million for 2008-09. Of this, $1.65 million was transferred to my office to fund academic initiatives. During the past several years, these payments have funded programs such as undergraduate curriculum reform, including the first-year Signature Courses, the UT Film Institute, and an endowed chair at the LBJ School of Public Affairs. Trademark licensing also funds athletics operations and debt service. Excess revenues of $2.5 million were retained as reserves.
Intercollegiate Athletics pays all its expenses at UT, including $8.2 million in scholarships, $2.1 million in central administrative services, $14.7 million in debt service, and $2.6 million in capital expenditures. During the past 3 years, Athletics and trademark licensing combined have contributed nearly $6.3 million to academic initiatives.
UT is one of only a handful of schools in the nation where Athletics is self-sufficient and not dependent on financial resources from the university. It was not too many years ago that UT was required to subsidize Athletics, and we need to strive to continue to keep Athletics self-sustaining.
It’s important to understand that we field teams in 20 sports, but in recent years only 2 teams have consistently generated significantly more revenues than expenses—football and men’s basketball. Baseball normally breaks even. In 2008-09, football generated $87.1 million and its expenses were $21.3 million. The resulting net income was critical to the financial well-being of 7 men’s teams and all 11 women’s teams. For this reason, if you are a fan of women’s rowing or softball or volleyball—or men’s or women’s tennis or golf or swimming—you should be rooting for the football team, too.
I was also asked about cash reserves in Athletics and trademark licensing. Those reserves totaled $25.9 million in 2008-09, which is equal to 2.9 months of operating expenditures and 11.6% of outstanding debt. The debt comes from the construction and improvement of multiple facilities, including Royal Memorial Stadium. Athletics revenue is cyclical and unpredictable—just like win-loss records. This fact makes it prudent to maintain cash reserves.
Finally, the Faculty Council has been roaming the campus for meeting space during the past year while Main 212 was being renovated. The newly renamed Lee Jamail Academic Room in the Main Building will open next month, when it will again house the Faculty Council, as well as many University events for students, faculty, staff, and alumni. This renovation was funded jointly by revenue from trademark licensing and a generous gift from Joe Jamail.