REPORT: Cal manages $3.7 million surplus in FY2022, with huge assist from UC Berkeley

Some good and some bad comes with this.

UC Berkeley @UCBerkeley

Bird's-eye view of the east side of campus! #BerkeleyPOV by @1977mPh #UCBerkeley #BerkeleyHills #CampusBeauty #regram

Jon Wilner got his hands on the fiscal year 2021-2022 report for Cal Athletics. The numbers appear to be a mix of good and bad.

Cal is in the green. The Bears reported a $13.2 million surplus from simple revenues and expenses, their largest positive figure since they took on the Memorial Stadium debt. Cal managed $118.2 million in revenue and $105 million in expenses.

But there are some caveats, namely, the Memorial Stadium renovation debt and the continuing direct assist from the UC Berkeley campus.

More from Wilner:

Cal’s operating expenses don’t include $8.8 million in debt service for the stadium renovation and training center. When added to the tally, that payment brings the total reported surplus down to $3.7 million.

But even that number is misleading, because it includes massive institutional help. Cal received $31 million in direct support from central campus per a yearly policy implemented by chancellor Carol Christ. Add a modest amount of student fees funneled to athletics, subtract $1.6 million in transfers back to campus, and the net result is $29.8 million in institutional support that the Bears book as athletic revenue.

…

Without that massive assist from campus, Cal’s revenue number drops to $88.4 million, and the reported surplus becomes a $16.6 million deficit.

This is a slight improvement over Cal’s FY2021 numbers, where the Golden Bears managed $94.45 million in revenue, $82.15 million in expenses (bringing their surplus to $12.3 million), with the same amount of stadium debt service bringing those figures down to $3.5 million.

And it isn’t too uncommon for public universities to assist their athletic departments. The University of Washington, which has one of the largest Pac-12 donor bases, received $15 million in direct institutional support in FY2022. The University of Virginia received $17.3 million from the state in FY2021. With universities storing cash reserves away in case of financial downturns, emergency financial aid assistance, capital facility construction and maintenance, there is usually enough in the reserve to help assist athletic programs in need.

The size of the contribution is a concern though—the $30 million infusion is one of the largest in college athletics. The policy of central campus’s direct support to the athletic program (and particularly taking on a huge percentage of debt repayments for the SAPHC) was enacted by Chancellor Carol Christ to balance the books. If a future UC Berkeley Chancellor takes over, it’s unclear how much of that support will stay in place.

The good news is Cal seems to be operating with positive margins, so the level of contribution from campus can potentially be reduced over time. But $4 million isn’t going to significantly diminish the size of the contribution.

More assistance will be needed from donors to continue supporting the 30 revenue and non-revenue programs Cal currently has up and going. Perhaps the branding efforts by the task force will help in getting UC Berkeley and Cal on the same page?

We’ll have deeper financial dives later this year when the full report comes out.