UW Huskies face budget shortfall. Here are what challenges are ahead.

SEATTLE – Two years ago, Erin O’Connell, Washington’s deputy athletic director and chief operating officer, was helping assemble UW’s intercollegiate athletics budget proposal for the 2024 financial year (FY24).

The Huskies had just enjoyed a surprise 11-win season during football coach Kalen DeBoer’s first season in Seattle, culminating in an Alamo Bowl win. Mike Hopkins’ fifth season leading the men’s basketball team was concluding. Washington was still a proud member of the Pac-12.

Then-athletic director Jen Cohen presented the proposed budget to the Board of Regents in June 2023. It expected to make $144.1 million in operating revenue against $134.15 million in expenses, with a net operating income of $9.96 million.

“We were in a really different space as an athletic department,” O’Connell, a former UW student-athlete on the rowing team from 1993-96, said.

UW’s NCAA intercollegiate athletics operating budget for FY24, which covers the 2023-24 academic year, illustrates the financial situation of an athletic department that dealt with massive upheaval, leadership changes and the earliest impacts of conference realignment. The athletic department blew past its projections, earning $190.94 million in operating revenue. Yet, the athletic department still suffered a $9.21 million net loss after racking up $200.15 million in operating expenses, nearly $50 million more than in 2023.

UW’s athletic department has operated at a net loss during three of the previous four years. Washington’s net losses in FY24, however, were nearly $5 million more than it endured in 2022 and the COVID-impacted 2021 financial year.

“I think we did a really good job in FY24 of managing what got thrown on our plates that was very unanticipated,” said O’Connell, who’s been part of the UW athletics department since 2016. “A lot of it was really amazing stuff, but when you have transitions, they are very expensive.”

Revenue breakdown

The majority of Washington’s operating revenue came from three sources during FY24: ticket sales, media-rights revenue and distributions and contributions (donations).

UW made $34.79 million in ticket sales during FY24, $7 million more than it did during FY23. Football accounted for $31.02 million, as UW claimed the Pac-12 championship, won its first Sugar Bowl and appeared in the College Football Playoff championship game.

Washington generated $44.26 million through media-rights revenue and distributions from the NCAA and Pac-12 – around $5 million more than during FY23.

Finally, the Huskies received $41.62 million in contributions, which O’Connell attributed to fundraisers and impromptu donations. More than $28 million of UW’s total contributions received in FY24 were designated exclusively for football.

FY24 was the second consecutive financial year UW’s athletic department raised more than $38 million, a marked increase after averaging $30.11 million in contributions from 2018-22.

Ticket sales, media-rights revenue and contributions don’t paint the entire picture. UW produced $39.34 million more in operating revenue during FY24 than it did in FY23, but the gains in its three largest revenue-generating sources amount to just $15.35 million. Add in the team’s $3.9 million increase from other bowl revenue, which includes expense reimbursements and bowl-game ticket sales, and UW is still short around $20 million.

That’s because the additional revenue came from an unexpected and unsustainable source – buyouts.

DeBoer departed for Alabama shortly after the 2023 season. Cohen left to become the athletic director at USC months after presenting the proposed FY24 budget, and her replacement Troy Dannan lasted less than six months before bolting for Nebraska. Additionally, UW received buyouts for baseball coach Jason Kelly, who became the pitching coach at Texas A&M, and gymnastics coach Jen Llewellyn, who left for Iowa.

“We felt very stable in our coaching staffs,” O’Connell said. “Then a lot happened.”

Expense breakdown

So what did the UW athletic department do with all the extra money it made during FY24?

The money that UW received in buyouts was essentially all spent to bring in football coach Jedd Fisch and his staff from Arizona, men’s basketball coach Danny Sprinkle from Utah State and athletic director Pat Chun from Washington State. UW spent around $26 million on buyouts after receiving nearly $22 million in buyouts during FY24.

UW paid its coaches $35.55 million during FY24, an $11.17 million increase from its total coaching salary pool from the 2019 financial year, the final one before the COVID-19 pandemic.

Football went from spending $13.44 million on its coaching staff during FY23 to $18.9 million in FY24, while giving DeBoer’s staff $1.92 million in bonuses for Washington’s football performance. UW also paid more than $4 million in severance to Hopkins, his staff and several football staffers following DeBoer’s departure. Support staff salaries also increased $7.78 million from FY23.

O’Connell said the rapidly evolving landscape of college sports required the athletic department to add several positions. She noted the NCAA’s decision to eliminate voluntary unpaid coaching positions before the 2023-24 academic year and grant baseball, softball and men’s and women’s basketball an extra assistant position meant UW had to add new coaches to its payroll that had previously been designated volunteers.

UW also paid $14 million in realignment expenses during FY24, although it isn’t counted as an operational expense.

Moving forward

UW’s financial situation remains difficult. O’Connell and Chun’s proposed FY25 operational budget from last June required two $10 million loans from the Big Ten and Fox Sports, borrowed with no interest against Washington’s future earnings. It still projected UW to suffer a net loss of around $2 million. And the Huskies aren’t guaranteed a full share of the Big Ten’s next media contract.

Additionally, the athletic department still owes $244 million to the university’s internal lending service for renovations to Husky Stadium and Husky Ballpark after making interest-only payments for the past several years.

Revenue sharing is also quickly approaching. Assuming the House vs. NCAA settlement receives final approval in April, schools will be able to directly pay student-athletes. Power conference athletic departments are expected to operate under a $20.5 million cap during 2025-26, according to a report by Yahoo’s Ross Dellinger, meaning UW needs to add those costs into its budget going forward.

These financial responsibilities arrive while salaries continue to rise. Fisch said he added 11 new positions to football’s coaching and support staff during the past offseason.

Washington’s financial solvency hasn’t been completely surrendered. UW’s current multimedia rights (MMR) deal with Learfield expires in June, and O’Connell said the athletic department is in the final stages of negotiating a new contract after taking its MMR to the open market. O’Connell called the current Learfield deal, which included several extensions, “old and antiquated” and said UW expects its new agreement to significantly improve its bottom line.

O’Connell also noted the athletic department is expecting to renegotiate the naming-rights contracts for Husky Stadium and Hec Edmundson Pavilion, held by Alaska Airlines, before those deals expire in June 2026.

The athletic department is welcoming the arrival of new university president Robert J. Jones, too. O’Connell said Chun was highly involved with the presidential search committee and Jones’ experience in the Big Ten at Illinois will be beneficial while the Huskies continue solidifying themselves in their new conference.

She added UW athletics – despite the department’s recent financial challenges – has generally functioned as a self-sustaining entity for the university. Outside of tuition waivers for the women’s teams, which the state government has provided for years, the athletic department essentially only spends the money it generates or has in its reserves, O’Connell said.

Changing times, however, require new expectations on how the department can function financially.

O’Connell said she wants people to understand old solutions won’t necessarily be the answer for new challenges.

“Everybody at the table,” she said, “needs to have their eyes open.”