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Donovan eyes 2011 for balancing budget


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POSTED: Thursday, July 02, 2009

As Hawaii athletic director, there are things Jim Donovan can control: coaching hires, ticket prices and such.

Others far out of his reach—ranging from the performance of global markets to the weather—can impact the financial health of the department as well.

The combination of those factors makes forecasting the fiscal future of the Hawaii athletic department murky at best.

Still, Donovan, who just completed his first full fiscal year leading the athletic department, sees profitability as a reachable goal and hopes to have the budget balanced by the 2011 fiscal year.

“;We've got a lot of factors, a lot of dynamics are changing out there,”; Donovan said. “;I would say by then we should be getting (the operating deficit) close to zero. Based on everything I can see in my hazy crystal ball.

“;I think it's very realistic for us to be in the black. It's just that we're in the depths of the economic valley right now.”;

Donovan took over as athletic director in the spring of 2008 and expected to face financial challenges in his first full year.

UH athletics ran a projected $2.6 million deficit in the 2009 fiscal year, which closed Tuesday. The department entered the year with an accumulated deficit of $5.4 million.

“;It's definitely more challenging than what I envisioned from (a financial) standpoint,”; Donovan said.

Donovan said a conservative guess at the 2010 outlook would be another deficit of about $2 million.

“;It could be much better than that, and certainly hopefully not worse than that,”; Donovan said.

Football remains the primary revenue generator, and much of the department's financial health will depend on the Warriors' ability to draw fans to Aloha Stadium. The department unveiled its marketing campaign this week, titled “;We Play for You.”; Season ticket sales begin Monday.

Donovan is expecting a dip in season-ticket renewals from the average rate of 90-95 percent annually, estimating this year's rate at 80-85 percent so far.

“;That doesn't necessarily mean we're going to make less revenue from football,”; Donovan said, noting that a home schedule featuring Western Athletic Conference rivals Boise State and Fresno State and season-ending games with Navy and Wisconsin could make up for the losses.

Donovan said he fielded offers from two BCS programs, including one from the Southeastern Conference, to have the Warriors play a one-time road game for a payout of around $1 million. But the competitive circumstances contributed to Donovan's decision to pass on the offers.

The department's philosophy has been to schedule home-and-home series, securing deals with schools such as Army, BYU, Colorado and USC.

“;I'm not ruling out completely us playing in a money game,”; Donovan said. “;I'm saying it just has to make sense for us.”;

While the department embarks on its initiatives, its financial fate remains tied to the overall economy.

“;About 85 percent of what we do is from disposable income,”; Donovan said. “;You're going to pay your bills, and what you have left is your disposable income. You're going to save some of it, you're going to go out to eat, and you're going to use some for entertainment.

“;It's the entertainment value that gets them to come. When disposable income shrinks, winning and losing becomes the compelling argument to go to a UH game.”;