USD Sports

University of South Dakota move to Division I balances costs, benefits

2012-09-08T22:00:00Z 2013-05-09T16:43:14Z University of South Dakota move to Division I balances costs, benefitsNICK HYTREK nhytrek@siouxcityjournal.com Sioux City Journal
September 08, 2012 10:00 pm  • 

VERMILLION, S.D. | South Dakota 41, Minnesota 38.

That victory over one of the "big boys" from a major conference in 2010 paid huge dividends for the University of South Dakota football program. It gave the Coyote athletic department, then transitioning from the NCAA's Division II to Division I, proof that USD could compete against higher-profile universities.

It also showed the potential payoff the move to Division I might provide.

"The year we beat Minnesota, applications from kids from the state of Minnesota increased," said university President James Abbott.

The enrollment of just one of those applicants would equal some $15,000 in tuition, room and board, books and fees annually for USD.

Earlier this month, South Dakota became a full Division I member, completing a process begun in late 2006.

That decision resulted in significant costs to the university and its athletic department. It has also led to greater revenues, which are expected to increase as the school begins to reap the full benefits of belonging to the NCAA's top tier of colleges and universities. (Football will compete at the Football Championship Subdivision, formerly called Division I-AA, a step below major players like Iowa and Nebraska, but a step above former Division II foes such as Augustana College in Sioux Falls.)

"I think what Division I did for us is give us more presence in the region," Abbott said. "In a time when the number of high school graduates is declining, a regional presence is more important than ever.

"Some people say athletics are the front door to the university, and in this case, the move to Division I is useful."

Useful, and expensive.

Since the move, the athletic department's budget has more than doubled, from $4.7 million in 2007 to $9.8 million this year.

As a Division I member, USD must grant more athletic scholarships, a cost the athletic department pays to the university. From 2007 to this year, the number of scholarships increased from 105.5 to 184.5 -- 36 to 63 for football alone -- raising costs from $1.1 million to $3.1 million.

Coaches' salaries and recruiting budgets rose. More coaches and athletic department staff were hired, all amid a challenging economic time when USD experienced a hiring freeze and other budgetary freezes or cuts, said Athletic Director David Sayler.

"Financially, we've had great support. The planning work that went in was good. Athletics has met the numbers set for it," said Sayler, who arrived in August 2010.

The university budget has been tapped to help make up the $4 million athletic department budget increase. The move to Division I has also created revenue streams that were impossible to realize as a Division II school, Sayler said.

This year, USD will receive $850,000 in guaranteed payments when its teams agree to go on the road and play larger schools. Northwestern University will pay USD $325,000 for a football game in Evanston, Ill., this season. Last year, USD received a $425,000 guarantee from Wisconsin for a football game in Madison, Wis.

Sayler said sponsorship dollars are up. There is now revenue from television and radio broadcasts of Coyote sports. Money from conference and NCAA affiliations will kick in. As the Coyotes resume games against former rivals South Dakota State and North Dakota State, increased ticket sales are expected.

Jeanette Hubert, assistant athletic director for administration, said those new revenue sources have balanced the increased expenses. As the department sees greater revenues from ticket sales, sponsorships and NCAA allotments, the dollar amount received from the university will decrease, she said.

Sayler said the extra expenses the athletic department faces have generated revenue for the university as a whole. More athletes now attend USD, and not all are on a full athletic scholarship, meaning they must pay a portion of tuition and other expenses themselves. Many of those athletes wouldn't be attending USD if it were not a Division I program, Sayler said.

Undergraduate enrollment at USD is up, from 6,844 in 2007 to 7,473 last year, a rise attributable to several factors. Abbott said a number of building projects and improvements have made USD more attractive, as has the move to Division I for students who want to watch big-time college athletics. Needless to say, when enrollment increases, so does tuition revenue.

Revenue from outside sources also has picked up since the move to Division I. The Howling Pack, an athletic booster club that raises money to fund athletic scholarships, has seen a rise in both membership and money raised since USD began the transition to Division I. In 2007, the club had 552 members and raised $289,674. Through Aug. 27, membership had reached 789, with pledged donations of $418,551. Howling Pack President Torrey Sundall said he expected total donations for 2012 to exceed $500,000, easily an all-time high.

"We've seen a significant increase in donors making a significant increase in the amount of their annual donations," Sundall said. "I think for a lot of them, (the transition) is a reason why. Other people have increased their donation purely for the reason that costs for scholarships have increased."

A Great Expectations Campaign run through the University of South Dakota Foundation also raised significant funding for athletic scholarships.

USD's experience is not unique. Jack Warner, South Dakota Board of Regents executive director, said similar enthusiasm and enrollment and fundraising jumps have been observed at South Dakota State, which moved to Division I two years before USD. The moves have come without the need for additional taxpayer dollars, Warner said.

"Budgets are all in the black," he said. "We have not sought any state revenue increases to fund the moves from Division II to Division I."

Like Abbott, Warner said the jump to a higher division can't get all the credit for increased enrollment and higher student retention rates. But he believes the bigger investment in athletics has played a role in attracting larger freshman classes and financial donations.

"Of course Division I athletics cost more money," Warner said. "The question I like to ask is are more potential students attracted to the institutions? The answer is yes."

Copyright 2015 Sioux City Journal. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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