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Final Exam Case Study:
As the Athletic Director (AD) of Other University (OU), y
Final Exam Case Study:
As the Athletic Director (AD) of Other University (OU), you are coming off the last academic
year (2022-2023) with a decent surplus or “profit” – having more revenues than expenses. This
is not a “profit” since OU is a non-profit organization. The surplus last year totaled just over
$25M (see attached spreadsheets). This Fall 2023, the school recently started to see declining
revenues and began to have some tough financial times. The President of OU has asked you, as
the AD, to make some cuts to the athletic department budget – effective immediately.
The President has asked for you to formulate a plan to immediately cut athletic department
expenses by $6 million. Remember, when you cut expenses (for example, cutting a team), keep
in mind that you must also cut any revenues that team might have generated as well. Also, there
are some restrictions or details that you must follow in cutting $6 million from the expenses for
this year. You must be aware and consider the various issues described below:
• The President has asked if any cuts are to be made to teams, OU must remain compliant
with the Equity in Athletics Disclosure Act so the male student-athlete population
percentage (currently at 54%) must not increase beyond the student body population
percentage of 60%. Keep this in mind if you cut teams and if you do cut a team, for
every team that is cut this includes the loss of student athlete participants which will
decrease your percentages. Make sure you have a running total of these numbers and
you continue to calculate the student athlete totals as you drop (or add) teams. If you
cut a team(s) – be sure to reduce all the other related expenses that you are given for
that team: salaries, scholarships, and any revenues that team might have produced.
• OU currently fields 17 teams (10 women and 7 men). To retain its current status as a
Division I institution, OU cannot have less than 14 teams and cannot have fewer than 7
women’s teams. If you do drop to the minimum of 14 teams, the following would be
the allowable combinations (7 women and 7 men) or (8 women and 6 men).
• The President was able to get the Board of Trustees to approve the use of a one-time
student fee of up to $25 per student for the next year. This money would be charged to
each student and would go directly to the athletic department. The language “up to” is
used here b/c you may choose not to institute a fee at all or a fee anywhere from $1 to
$25 per student. Think about the impact for students and also take it into consideration.
• In the last academic year OU had an enrollment of 20,000 students (60% male and 40%
female) with a student athlete population that was 54% male and 46% female. The
President has asked that you also account for the University losing around 2,000 students
next year so enrollment will be around 18,000 students (with the same 60-40%
male/female make-up).
1. Explain, in essay format, what you would do. Please also explain the logic behind your
approach, how you would handle the media, and communicate with the various stakeholders
(students, faculty, employees, fans, etc).
2. Be specific and incorporate ideas from the course that we discussed in relation to these topics,
or other topics related to managerial decision making in collegiate athletics, the Equity in
Athletics Disclosure Act, etc.
3. In either an Excel spreadsheet or a table, show the specific calculations for your $6M cut to
the budget. Be sure to breakdown the numbers that detail the EXACT cuts you will make and
how they total $6M. I should be able to read your response to question #1 and see all of that in
this table/spreadsheet.
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