Martin Stadium

AUDITS ARE A CRITICAL part of running a sound business and they are performed at Washington State on a regular basis. The recent football ticketing audit at WSU, like every audit in every company ever done, found places to tighten up. But let’s be very clear about what was discovered: not very much.

Just to make sure I wasn’t somehow missing anything on this, I called several friends who have spent many years working in large corporations and asked them to read about what was found in the audit. To a person, from a range of industries, the response was the same: this is what audits are for and what was found here is of minuscule significance.

But, I asked, could it suggest some broader issue with management? As one friend said, “that would be a stretch of Herculean proportion.”

Allow me to count the ways all the coverage of the audit is blown way out of proportion:

1. Home football game attendance totals didn’t match the turnstiles.

Give me a break. It’s common practice in college athletics to count every sold ticket in the attendance total whether the seat was actually used or not. And if you’re being honest, you’d count every pass used by an EMT, sheriff, and usher too.

Moreover, to suggest that budget and planning is based on announced attendance totals rather than sold tickets is preposterous. Keep in mind, these numbers are used for financial purposes so seats sold is the only factor they should be looking at. Conclusion: non-issue.

2) Four tickets were devoted to donor development in 2016 — and the paperwork behind it can’t be found.

Who cares — it’s four (yes, 4) seats. I’ve been sitting in the club section since it opened and I know exactly who those four seats went to and I know for a fact that the result has been very large checks written to WSU athletics. Conclusion: Why in the world would you even cite this?

3) Athletic department staff were allowed to buy premium seats at a discounted price.

You know why athletic department staff members were allowed to buy premium seats at a discounted price? Because those seats were unsold. Cougar fans should be purchasing those seats at full price given the success of our football program so they don’t sit empty on game days. But they were empty. WSU killed two birds with one stone — rather than take the goose egg on those seats, they filled ‘em and generated some revenue out of them. I guarantee you that any school in America whose alums won’t fill the seats will have a program like this in place. Whether the program should have been opened up to staff for the entire university rather than just athletics is a debate for others to have, but once again the broader issue is that this is no big deal. Conclusion: non-issue.

4) IMG, the subcontractor in charge of marketing and branding in WSU athletics, received thousands of complimentary seats to games that weren’t written into the contract.

This is a $3.2 million alliance that has been in place for more than a decade. IMG staff work inside the athletic department, hand in glove. Yes, the accounting process here needs to be tightened up, but the fact of the matter is that IMG is using comp tickets to bring in more advertising partners for Washington State. IMG is so trusted and so integral to what WSU does in athletics that they have been leading negotiations on naming rights. Conclusion: clean up the paperwork and no big deal.

YOU KNOW WHAT PEOPLE REALLY OUGHT to be wringing their hands about right now? It's lack of revenue to WSU athletics. The audit shows that Cougar fans are not stepping up to support their team. WSU athletics got creative with filling seats because WE FANS DID NOT BUY THEM.

Please keep in mind we have deficits in athletics because the WSU administration basically made no investment in its football program for the better part of two decades. The Cougar Football Complex and the premium seating addition at Martin Stadium were long overdue and set the table for WSU to compete in the Pac-12 long term. These investments made in facilities -- as well as coaches, nutrition, academic support, counseling and more -- were absolutely necessary to get Washington State back in the game and those investments are paying off with three consecutive bowl games and the third-most conference wins the last three years. WSU is back in the hunt!

There are two ways in business you get yourself on the positive side of the financial ledger: control costs and maximize revenue.

WSU athletics has made substantial cuts to its operation in recent years, but the fact is that you can cut only so far before you cross the line from efficiency into harm. WSU athletics cannot “cut our way” out of the budget shortfalls. Spending is not the issue.

Increasing revenue, substantially, is where the answer sits.

Rest assured, President Kirk Schulz and athletic director Pat Chun are looking at all revenue streams, including naming rights, sponsorships, student fees, etc. Progress no doubt will be made on those fronts, but to be honest the largest upside in revenue lies with all of us as fans.

I have written at length about where WSU stands versus its peers in terms of season ticket sales and annual donations to the Cougar Athletic Fund. The bottom line is that the upside is huge. To refresh: based on fiscal year 2017, WSU had 7,500 donors to the CAF for total donations of $6.5 million and season ticket sales for all sports of $6.2 million. Both of those revenue numbers are last in the Pac-12. And the next-worst on the list, Oregon State, checks in WAY ABOVE WSU in both categories: at $10.2 million and $9.3 million, respectively.

It's important to note that WSU is not a small university, with current undergraduate enrollment at 24,470 -- seventh-most in the Pac-12. In addition, the average early earnings of graduates is seventh in the Pac-12 and increasing at the fastest pace in the conference. We also have a large alumni base, at more than 215,000.

To add further context to the revenue issue, consider that Kansas State’s athletic department revenue is $77.9 million and Oregon State’s is $72.7 million. WSU's athletic department revenue is $59 million before you add the $10 million in university support for a total of $69 million. We alums and fans need to make up that $10 million.

Given these numbers, one can conclude our donations to WSU athletics should be approximately seventh in the Pac-12, which would put annual CAF donations at approximately $15 million — or more than double where we currently stand. Add in the fact that we have a loyal and passionate alumni base living and working in one of the best economies in the country and these estimates are very realistic.

MAKE NO MISTAKE, THE TRAJECTORY of athletics fundraising at WSU is going in the right direction and Chun has already supercharged the effort with a lot more to come. That being said, it’s not growing fast enough. We have to get all WSU alumni and friends involved and tackle the revenue issue in athletics head on.

I am asking for a Crimson Call to Arms to address this revenue issue. And whether you can donate $100 or $1 million, we as alums and fans need to tackle this issue now!

NOTABLE:

If you are a current donor, thank you and please consider increasing your donation here. FYI The deadline to improve your CAF rank is June 30; the rank is critical for priority on season tickets, bowl games, post-season play in all sports and special invites to athletic events.

To join the CAF with an initial donation click here.

To order season tickets for any sport click here.

If you are considering a major gift to facilities, scholarships or sponsorships please contact someone from the WSU development team here.



As a final note, please ask your family and friends to join this call to arms today.

ABOUT THE AUTHOR: Glenn Osterhout is a wealth manager in Bellevue who graduated from WSU in 1982. He is chairman of CougsFirst!, and has donated large sums to WSU athletics to, among other things, name the recruiting suite in the Cougar Football Complex after Steve Gleason and the Gray W Lounge in the Complex after Jack Thompson. He is a periodic columnist for Cougfan.com.

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