05-31-2025, 02:40 PM
I wonder how much tolerance there will be for continued athletic department deficits (last numbers I saw, which was in 2022, before the demise of the PAC-12, was that the AD had expenses were $145.6 million, against a revenue of $134.1 million for a deficit of 11 million. Given the reduced payouts from the ACC, the increased cost in trans-continental travel, the impending arrival of the House settlement and the like, it is very hard to see how the AD budget gets any semblance of balance. Now, that’s fine when the university is rolling in money and academic departments have stable or increasing budgets, but…
Stanford’s full R&D budget was about $2.2 billion, of which about 75% is federally funded. Whether through reduced indirect cost calculations, or cuts to grant-funding agencies (NIH and NSF specifically, plus DOE, which funds SLAC), with subsequent reductions in grants generally, and whether it is done by executive order or through spending legislation, Stanford would be a fool not to prepare itself for a reduction in federal funds over the next few years. If you add in the contemplated tax on endowments, we are looking at a potential financial catastrophe for Stanford. With an overall budget coming close to $10 Billion, it is easy to see a reduction in revenue and increase in taxes that affects about 10 - 20% to the top line.
In this context, I expect two things to happen. The first is that the fight for private donations to at partially mitigate the reduction to be epic. Fundraising is going to go on steroids. And while donations to the AD and lifetime cardinal are different than donations to the University, there is overlap and it is hard to believe that a school whose underlying mission is the University won’t steer donors towards efforts to preserve its academic mission (that is, to avoid having to lay off faculty, and to keep the graduate students and post docs who are the lifeblood of research going).
Secondly, I doubt that there will be much of a tolerance for subsidizing the athletics department going forward. I think the AD is going to be asked to self-support because I find it hard to believe that the faculty senate is going to stand up and sat “sure, let’s give the AD an extra $5 million a year to hire a top name football coach while we slash the Classics department in half.”
Lots can happen between now and then. There could be a groundswell of support to continue federal funding for universities. We could see a massive groundswell of support from donors. The medical center, which cross-subsidizes everyone, could have another banner year, and cushion the blow.
But my expectation is that over the next three plus years, Stanford and a lot of other Universities, are looking at a much more difficult financial picture, and that is going to have substantial downstream consequences on the Athletics Department. I would expect a major retrenchment of expenditures, including a re-examination of how many varsity sports the university supports. I wouldn’t get my hopes up for a splashy coaching hire after Frank Reich’s year is up. Unless donors step up, I wouldn’t expect Stanford to be a major House payments player.
BC
Stanford’s full R&D budget was about $2.2 billion, of which about 75% is federally funded. Whether through reduced indirect cost calculations, or cuts to grant-funding agencies (NIH and NSF specifically, plus DOE, which funds SLAC), with subsequent reductions in grants generally, and whether it is done by executive order or through spending legislation, Stanford would be a fool not to prepare itself for a reduction in federal funds over the next few years. If you add in the contemplated tax on endowments, we are looking at a potential financial catastrophe for Stanford. With an overall budget coming close to $10 Billion, it is easy to see a reduction in revenue and increase in taxes that affects about 10 - 20% to the top line.
In this context, I expect two things to happen. The first is that the fight for private donations to at partially mitigate the reduction to be epic. Fundraising is going to go on steroids. And while donations to the AD and lifetime cardinal are different than donations to the University, there is overlap and it is hard to believe that a school whose underlying mission is the University won’t steer donors towards efforts to preserve its academic mission (that is, to avoid having to lay off faculty, and to keep the graduate students and post docs who are the lifeblood of research going).
Secondly, I doubt that there will be much of a tolerance for subsidizing the athletics department going forward. I think the AD is going to be asked to self-support because I find it hard to believe that the faculty senate is going to stand up and sat “sure, let’s give the AD an extra $5 million a year to hire a top name football coach while we slash the Classics department in half.”
Lots can happen between now and then. There could be a groundswell of support to continue federal funding for universities. We could see a massive groundswell of support from donors. The medical center, which cross-subsidizes everyone, could have another banner year, and cushion the blow.
But my expectation is that over the next three plus years, Stanford and a lot of other Universities, are looking at a much more difficult financial picture, and that is going to have substantial downstream consequences on the Athletics Department. I would expect a major retrenchment of expenditures, including a re-examination of how many varsity sports the university supports. I wouldn’t get my hopes up for a splashy coaching hire after Frank Reich’s year is up. Unless donors step up, I wouldn’t expect Stanford to be a major House payments player.
BC