University of Tennessee football fans hope the Volunteers are back on track under new Head Coach Butch Jones. The school had to pay millions of dollars to fire former head coach Derek Dooley and hire Jones as the new gridiron gaffer, not to mention the ongoing payments after firing head coach Phil Fulmer.
The Vols' carousel of coaches eroded the sports budget and had "Big Orange Country" running in the red. Last year Chancellor Jimmy Cheek helped balance the sports budget by giving the athletic department a three-year break from its annual pledge of $6 million to academics.
The annual donations were promised by the athletic department as it proudly shared the wealth of big-time college sports with academic programs.
"I think the perception was we were in great shape financially. The reality was we were not. That we had to make some adjustments," said Dave Hart in an interview with WBIR in December 2012.
The hiatus let athletics keep a total of $18 million dollars to put the Vols back on solid financial ground. Thus far it has worked with the athletic department recently posting financial numbers that showed it broke even.
About half of the athletic department's annual donation to academics went specifically to scholarships and fellowships. Stopping the sports donations meant the campus had to find another stream of cash for the scholarships that were set up based on a promise of money from sports.
Last November in a written statement, Chancellor Cheek said, "We will continue to honor these commitments, primarily through private gifts."
That statement may conjure up visions of UT pleading with big private donors to write new checks that would save the scholarships, but that is not the case. UT never held a fundraising campaign or asked anyone for new private gifts specifically to back-fill these scholarships.
The school says it kept the scholarships alive entirely with money from its financial reserves. The university is required to maintain enormous amounts of money in its rainy-day funds. Vice Chancellor Chris Cimino, UT's Vice Chancellor for Finance and Administration, said the school has more than enough money in its reserves to pay for the scholarships without making any other cuts on campus.
"This was not something that happened suddenly. We had planned for this and found other ways to fill it in," said Cimino. "We looked for pots of unspent money."
The reserves are comprised of funds from a multitude of sources on campus, but Cimino said UT pulled specifically from the portion of the pile that came from private gifts and unused scholarship money.UT hopes the budgeting teamwork will help the Vols rebuild success on the gridiron while continuing to fund academic stars who carry the torch in the classroom.
When the three-year break from sports donations to academics concludes, UT may re-examine how athletic revenue is shared campus-wide.Under the old system, UT's athletic department promised the hard amount of money up-front rather than basing its donations on how much money was earned at the end of the fiscal year.
Other schools such as LSU have adopted formulas that transfer percentages of surplus money. In September 2012,LSU formalized an agreement that stated the "first $3 million of any surplus will be devoted strictly to athletics reserve accounts." Then if a surplus of between $3 million and $5 million is obtained, the money will be split with 75 percent going to athletics. Any surplus above $5 million "will be split equally between athletics and the rest of the university."