When the Huskers fire a coach or need to fund a big stadium renovation, they don’t need to turn to the chancellor or ask donors to bankroll the changes.
The athletic department maintains millions in a reserve fund that has historically provided the flexibility it needs to cover big-ticket items, such as the $7.9 million it now owes to fired Husker coach Bo Pelini. The total balance has not been made public, and the athletic department and the University of Nebraska Foundation declined to answer questions Monday about the fund, aside from noting that it’s not taxpayer money.
The reserve fund puts Nebraska, one of a handful of athletic departments in the country that are entirely self-funded, in the position to say that “resources are not the question here at Nebraska,” as Athletic Director Shawn Eichorst put it during his press conference Sunday.
It’s not unusual for teams in power conferences to have millions in reserves, said Chad McEvoy, professor of sports management at Syracuse University and editor of Case Studies in Sport Management. But McEvoy was surprised to see Nebraska absorbing up to $12 million for Pelini and other coaches’ contracts without flinching.
“Most athletic department budgets include reserve funds, although I am not familiar with many programs that would have 10-plus-million dollars sitting in such a fund for this kind of expenditure,” McEvoy said. “Even for the five major conferences, that strikes me as a lot.”
At the University of Florida, where coach Will Muschamp was fired this season, the $2 million a year owed to him will come from department reserves, said university spokesman Steve McClain. When Tennessee fired Derek Dooley in 2012 while still making severance payments to previous coach Phil Fulmer, according to media reports, the university’s athletic department temporarily stopped giving money back to the academic side until it was on better financial footing.
Brian Hastings, president of the University of Nebraska Foundation, didn’t return a call for comment. Foundation spokeswoman Dorothy Endacott referred questions to the Husker athletic department and said she didn’t know which fund would be used to pay Pelini.
NU spokeswoman Chris Anderson declined an interview request and said in an email that “University of Nebraska Department of Athletics’ operating reserves will be utilized.” She noted that the department doesn’t receive any state money.
In past interviews, athletic department officials said similar buyouts were covered by a reserve fund held by the NU Foundation.
Former Athletic Director Tom Osborne said in 2010 that about $15 million was deposited in the reserve fund each year from ticket premiums and that the accrued stockpile allowed the athletic department to cover budget shortfalls and buyouts.
Season ticket holders must give anywhere from $150 to $2,500 annually, depending on the seat, to renew seats each year. Potential ticket holders hoping to come off the wait list are ranked according to how much they’re willing to commit to donating annually and their past giving, according to the foundation.
The fund was used to buy out former coach Bill Callahan and former athletic director Steve Pederson in 2007. The University of Nebraska-Lincoln also tapped the reserves to cover $7.2 million of the $9.2 million penalty it paid to move from the Big 12 to the Big Ten Conference in 2011.
Even after those big-ticket items, the Huskers took $25 million more from the fund to jump-start Memorial Stadium’s East Stadium expansion, completed last year.
Nebraska is one of seven Division I schools whose athletic department weren’t subsidized last year, according to data compiled by USA Today, and athletics typically shares some revenue with the rest of the university. UNL spokesman Steve Smith said the athletic department has budgeted $4.5 million to give to academics this fiscal year.
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