The University’s $19 million budget cut has left many students and alumni wondering why the Athletic Department has seemingly not been hit financially.The construction of two new stadiums and a basketball practice facility are part of the reason for that misconception.”Students who say we should take money from athletics need to understand that we do,” said Chancellor Mike Martin. “Athletics is the front porch to the University, but I always remind people that a front porch is only as good as the house it’s attached too.”The University has always taken money from the Athletic Department and will be asking for more as a result of budget cuts, according to athletic director Joe Alleva and senior associate athletic director Herb Vincent.The Athletic Department gives 3 percent — an average of about $3.5 million over the past few years — of its budget to the University for administrative overhead in a normal year. The department will be asked to give back 5 percent — about $6 million — of its budget to the University in the fiscal year from July 2009 to July 2010, Vincent said.This does not mean the Athletic Department is short on funding for its current projects, but it does have less money to start future projects, meaning delays are possible.”Some people are under the impression that we are not affected at all,” Vincent said. “That’s just not the case.”LSU’s Athletic Department makes money through ticket sales, parking fees and television contracts, Alleva said.The three sports that make a profit at the University are football, baseball and men’s basketball, with football making up the majority of the profit.”Football is the sport that supports all the other sports,” Alleva said.The Athletic Department is one of the few in the nation that takes no state money, charges no student fees and gives money back to the University, according to Alleva.Vincent said when the University raises fees and tuition, the Athletic Department has to pay for the increase for the student-athletes under scholarship. That will amount to nearly $500,000 in the 2009-10 school year.”Going from 3 percent to 5 percent is going to cost us $2 million, so now we have $2.5 million we have to go to our budget to find,” Vincent said.But ticket sales seem immune to economic woes. Alleva and Vincent said football season tickets are still being renewed at more than a 95 percent rate each year.Part of the reason for the Athletic Department’s ability to stay afloat during the economic storm is the Tiger Athletic Foundation.The interplay between the Athletic Department, the University and the Tiger Athletic Foundation is a tangled web that lends to the misconception that TAF is part of the other two entities.TAF was established in 1978 as the Varsity Club — a public division of the LSU Athletic Department — as a way to raise funds as a support to the program under then-athletic director Paul Dietzel, according to Rick Perry, executive director of operations at TAF.Perry said the Varsity Club, which was based on a program Dietzel had established as athletic director at the University of Indiana, was replaced by Tigers Unlimited in 1983 and became TAF in 1987.Perry worked in the Athletic Department during these changes and joined TAF in 1987, shortly after it became a private 501(c)(3) nonprofit corporation, meaning it must make its yearly federal income tax return form public but may keep all other financial records confidential. He said there were a few reasons for the change to a private organization, although he is not sure why the final decision was made.”In a lot of foundations, [privtization] was the path they were taking,” he said. “The real growth was when it became the Tiger Athletic Foundation. There was increased effort at that time to raise funds privately. It was the evolution of college athletics as a whole that led to it.”That misconception of TAF being one with the Athletic Department isn’t a bad thing, Vincent said.”We want people to know when they are giving to TAF, they are supporting the Athletic Department, although TAF is a private organization,” Vincent said.Thirty-one years later, TAF has grown to more than 30,000 members and has raised more than $50 million in purely philanthropic giving during the past eight years. In the 2007 calendar year — the latest available federal income tax return form — TAF made more than $26.3 million total, including philanthropic giving and money associated with ticket sales.The CEO of TAF is Maj. Gen. Ron Richard — or “The General” as he is known to his peers — a 1968 University graduate who served 33 years in the Marine Corps before retiring as a commanding general. He joined TAF in 2001 at a salary of $82,000 a year and made $252,000 in 2007.On September 8, 2002 The Advocate reported that TAF had 12,700 members. Roughly 1.3 percent of TAF members had given $100,000 lifetime and 76 percent had given less than $1,000 lifetime.Richard said now that TAF has grown, less than 1 percent have given $100,000 in their lifetime.”Our overarching mission is to ensure all of our student-athletes are provided the best of facilities and atmosphere so they can academically graduate and contribute to this great republic,” Richard said.Alleva said support from TAF is critical to LSU’s athletic success.”We would be lost without them,” Alleva said. “They are critical in us trying to achieve our objectives of winning championships and trying to provide a quality experience for our student-athletes.”Richard said he is not worried about the long-term effects of the economic downturn.”The membership has stayed about the same,” he said. “The philanthropic giving has been prolonged … meaning that instead of giving x number of dollars over a three-year period, it is being given over a four- or five-year period.”
FOCUS ON FACILITIESTAF has been instrumental in the building and renovation of the east and west sides of Tiger Stadium, the Cox Center, Mike the Tiger’s habitat, the football operations center, parts of Alex Box Stadium and the new basketball practice facility.Perry said the first project TAF took on outside of the projects they had in the past was the building of the University Club Golf Course and practice facility in 1998.That project was the first venture for which the University allowed a private entity to take on a project on its behalf on state funded land that would benefit the Athletic Department without the Athletic Department funding it with state bonds, as it had in the past, Perry said.Now it has become commonplace for the University to lease land to TAF for it to raise funds privately then build on the land before TAF hands it back to the University once the project is completed.Stephen Street Jr., Louisiana inspector general, said his office has not received a complaint about this process.”If we got a complaint on it, we would go and investigate it,” Street said.Vincent said building some of the facilities in this manner expedites the process.”If LSU built it, then we would have to go through state bidding laws,” Vincent said. “[Having TAF build it] doesn’t require you to go through the same bidding laws as the state would. On the other hand, TAF takes bids, but it expedites the process by doing it privately.”
MOVING ALONGTAF’s fundraising currently deals primarily with building athletic facilities, such as the new Alex Box Stadium and new Tiger Park, but the future may be different.Two years ago, TAF started to collect money for endowed scholarships for the student-athletes with a “pie in the sky” goal of $100 million, Alleva said.Richard said the campaign has earned nearly $6.5 million so far and equated the scholarships to “cash money the Athletic Department saves.”These scholarships work by the Athletic Department putting a certain amount of money into an account to earn interest. During a year at a rate of 5 to 7 percent, $100 million could earn anywhere from $5 million to $7 million, which would cover the $7 million yearly cost of athletic scholarships the Athletic Department pays for per year.”That would be a big relief to our budget,” Alleva said. “It’s going to take a long time. That would be something that the next athletic director after me would benefit from, but it will be a really good thing for the Athletic Department.”—-Contact Andy Schwehm at [email protected]