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Four university panelists who were a part of our Power Breakfast “The Business of College Sports” weighed in on the biggest challenges facing their respective athletic programs and shared principles they’ve used to help run a successful sports business.

1. What do you feel is the biggest business challenge facing your school and why is it a challenge?

TD: For us right now, and it is unique to us, it is the use of state money for the athletics department. With rare exception, state dollars are used to support athletics programs nationally. The fact is that the University of Iowa doesn’t, Iowa State University has a minimal amount and we have a larger amount, and the (Iowa) Board of Regents asked us to minimize and eliminate that funding (UNI will need to eliminate or reduce $3.6 million in state funding from its total budget of about $12 million). It’s a huge chunk when you operate plus or minus $50,000. We are probably just one of the first schools nationally to address it.

JP: Our biggest challenge is funding. We currently have one of the smallest athletics budgets in Division I-A (BCS) in the country, yet our fans and the media expect us to be able to compete with those that have budgets two to three times our budget. At the same time, we live in a state where the government leaders have clearly indicated they do not want any state funding to be provided to athletics departments. As a result, all of our growth (we have increased our budget over $15 million in the last four years and invested over $50 million in new and improved facilities) has come on the backs of our ticket holders and donors, while the support from the state has dropped from $3.5 million annually to $1.6 annually in the past two years. In addition, we fully expect the level of state support to drop to zero within the next several years.

AS: The first thing that comes to mind is the “David fighting Goliath” concept for us. We are a member of an excellent conference that is made up of schools with smaller business models than those found in the BCS schools – like Big Ten and Big 12. Yet we go head to head on the court and in the living room for recruits.

MJ: I think it is trying to balance the academic mission and the athletic mission of a major university. We have 24 sports, and how do we pay for it all? We get no state support at this university and our budget is $65 million. So we start from scratch every year and have to figure out how we are going to come up with $65 million. When you couple that with the fact that out of our hands, if the state Board of Regents increases tuition by 2, 4 or 8 percent, then we have to come up with new money because we pay all the tuition, whether it is in-state or out-of-state, for all of our student athletes. And that bill this year is $8 million. So you can do the math; if they raise tuition by 5 percent, we all of a sudden have to come up with several hundred thousand dollars of new money. That is a real challenge. We have weaned ourselves off of state money over the last few years, so I think two years ago was the last time we got anything. And it is nice that we can do that because when there is somebody out in the hinterlands of Iowa and they are complaining about somebody’s salary or whatever and how their tax dollars are paying for it, well that’s not the case.

2. How are you going about addressing that challenge?

TD: We have to give extra attention to maximizing any revenue source from outside the university: donors, marketing, advertising, everything like that. Not that you haven’t always done that, but that is the only place that new money is going to come from. The Regents have asked the presidents, (at) both Iowa State and Northern Iowa, to come up with a plan by September to reduce or eliminate (that funding). So we are actually working on that plan right now. It may be a need for more student fees instead of state funding. That money may come from other areas; we might play a second guaranteed game in football to generate new money.

JP: We have addressed the decrease in state funding by communicating to our fans the need to raise ticket prices, increase donations and sell more sponsorships. For the most part, our fans have responded extremely well to our challenge. However, we also realize increasing ticket prices and donations simply increases the pressure on our coaches to perform and decreases the amount of time our fans will be willing to be patient with our coaches and our administrative decisions.

AS: Becoming clear about who we are and what we have to offer at Drake – our educational opportunity mixed with a commitment to excellence in D-I athletics. Lindsay Whorton, a Rhodes Scholar who has just completed her first year at Oxford University, is a prime example. We also have to work harder and be as efficient and effective as possible with our resources.

MJ: We spend an awful lot of time making sure our kids are going to class and getting the education that they came there for. So that room, board and tuition that we pay, if it goes up every year, we have to keep finding out ways to get new revenue. So we ask our fans and contributors to give more, we hope that the TV packages are lucrative and that that keeps going up a little bit. And we hope we are successful on the playing field so that people are buying tickets. If that all happens, then we can keep educating the student athletes and giving them a quality education and sending them out into what we hope is the state of Iowa, to be great leaders for the state.

3. What is one piece of business advice, a motto, a lesson or words to live by, that you have found valuable to running a successful sports business?

TD: When I was a student at UNI working in the athletic department and Bob Bowlsby, who was the AD, had brought (basketball coach) Eldon Miller in here. Miller had just won the NIT championship at Ohio State; he was a legend. Bob got called away but he sat Eldon down beside me in an office and left for 15 minutes. And Eldon Miller treated me like I was a donor that had given him a million dollars. he treated me like a player; he treated me like a family member. And that is the one lesson that I was taught. Here was a guy that I thought was maybe above a lot of people, and he treated me as a student with class and respect in a situation where he didn’t have to do it. As times turned around, I’ve worked with Eldon. His son is a coach, we brought them up for an exhibition game this year and Eldon had a lot to do with what has happened at UNI. So the lesson is you have to treat everyone with respect and dignity, because, one, it is the right thing to do, but secondly, you just never know how (your) paths will cross somewhere down the line.

JP: Do not be afraid to make tough decisions. Too many people are simply afraid to make a decision. Indecisive leaders paralyze an organization. If you make the incorrect decision, admit it, readjust and make another decision to correct it.

AS: Work Hard, Work Smart – one of our eight Bulldog Beliefs in women’s basketball.

MJ: Well, I asked (Iowa Athletic Director) Gary Barta that question, and he said, “You hire great people, give them what they need and get out of their way.” That is pretty good. I’ve been doing this for 28 years here and I’ve seen people come and go, coaches come and go and ups and downs of teams. The areas that really have success are the ones that have good people leading their division, whether that is their team or their academic division or marketing or whatever. And you let them do their job.