A presentation on plans to further reduce Northern Kentucky University’s budget deficit detoured into a debate on the role and meaning of athletics within the university’s financial framework.

Following the announcement of new NKU President Cady Short-Thompson on Sept. 13, the Board of Regents convened in the afternoon the same day, where Provost Matt Cecil, Chief Financial Officer Jeremy Alltop and Associate Provost for Enrollment & Student Success Ryan Padgett presented on revenue and expense plans for fiscal years 2024-25.

The university’s budget shortfall of over $24 million announced last year has decreased to $9.6 million by June, after a stringent repositioning effort that has slashed funding in several departments, cut faculty positions, reshaped financial aid and raised tuition alongside housing, dining and parking rates.

Still NKU is expected to lose $16.1 million in operating expenses in 2023-2024—comprising $9.6 million recurring and $6.5 million non-recurring expenses, such as equipment charges and financial aid—according to Alltop’s projections.

Declining undergraduate enrollment will compound the budget issue as Padgett projects a decrease of 350 domestic and 275 international students for 2024, resulting in smaller incoming first-year classes and more credit hours per student. However, the administration expects regional transfers and climbing retention rates to offset this decline.

At the June meeting, the Board of Regents instructed NKU administrators to reduce the deficit by another $5 million. In response, the Sept. 13 plan aims to cut a total of $7.3 to $7.8 million in recurring losses, which include: $1.8 million in instructional costs; $1 to $1.5 million in renegotiated contracts with Academic Partnerships, the company that helps market NKU programs to prospective students; and $4.5 million in reductions across divisions.

Budget cuts have struck every NKU division by 8-12% last year, Alltop said, with Academic Affairs bearing the brunt in the loss of faculty positions and programs. Year two of the Repositioning Plan continues to cut $1.4 million in academics—the smallest percentage of all reductions this time, according to Alltop.

A slide of the Sept. 13 presentation identifies more reduction possibilities: $10,000 in presidential divisions, $40,000 in legal affairs, $70,000 each in strategic and diversity resources, $435,000 in administration and finance combined, $600,000 in institutional costs—mostly financial aid—and $1.2 million in expenses concerning student affairs and enrollment management. The reduction plans have been optimized for each division’s size and store of resources.

Regent Michael Baranowski, also a political science professor, raised objections as to why athletics was not listed among the outlined reductions.

Academic Affairs is a core function that has taken 10% of budget reductions over the last two years, while NKU Athletics, a non-core function, is beginning to take 6%, Baranowski remarked. “Maybe a case can be made that we take 10% of a core function and 6% of a non-core function in a crisis. Maybe there’s a case to be made that I’d sure like to hear. I haven’t heard a compelling case. I know the faculty haven’t heard a compelling case and the students I don’t think have heard a compelling case, and I think that’s just inexcusable,” he said.

The salary increase for Norse men’s basketball coach Darrin Horn, announced in April this year, has heightened the discussion around NKU Athletics and has especially puzzled faculty.

For Alltop, who called Baranowski’s comment “a philosophical question for the board to consider,” athletics is not a recurring loss in need of reduction. On the contrary, he expects that athletics and associated activities including facility rentals, ticket sales, fundraising and sponsorships will generate $600,000 worth of revenue for NKU.

Furthermore, Alltop stated that the number of credit hours and direct instruction outcomes have decreased considerably, whereas the number of student athletes has not.

Cecil connects athletics to the larger campus community and in turn, student success. “Student athletes graduate at a higher level, they contribute to our performance metrics at a greater percentage than the larger student body,” he said. “The real politics of this is that there has been no appetite on this board to reduce athletics and that’s just a reality.”

The provost and Chair of the Board Rich Boehne regard athletics as uniquely positioned to bring revenue to the university, with Boehne expressing admiration for the department’s “entrepreneurial spirit.” Regent Andrá Ward deems athletics a core piece of university identity.

“Students come to any university, NKU among them, to field lots of personal dreams and goals and aspirations. University identities also matter,” Ward said, adding that he hopes to see athletics used as part of NKU’s integrated strategy for admission, recruitment and retention, as opposed to an expenditure.

Baranowski said that he does not disagree with the importance of athletics to the university, but maintained that some of the money spent on athletics could have been invested in other areas, and that a serious conversation should be had with faculty.

“These are things we haven’t raised or haven’t seriously considered, even simply to say to faculty, ‘okay, we understand what you’re saying, we get your concerns and this is why we’re doing it this way.’ [NKU’s communication]’s been full of just, ‘well, we can’t consider that.’ I think that’s dismissive and disrespectful to the faculty,” Baranowski said.

For Regent Nathan Smith, the decisions for academics, faculty and athletics are all part of business strategies to attract students to NKU.

“When it comes to the students, and when you’re recruiting, they are looking for an experience that we are competing against,” Smith said.

While the debate was not resolved at the meeting, athletics does play a part in the administration’s plans to improve revenue streams for NKU. The same plans include raising tuition for the 2025 fiscal year—on the heel of a 3% increase for undergraduate tuition this year—as well as a 2% increase on most programs with few exceptions. These rates could bring NKU $2-3 million, according to Alltop.

Along with other investments in international partnerships, university facilities and fundraising, NKU is projected to gain between $25 and $32 million by 2028.

The plans culminate in a 2023-2024 operating budget of $280.6 million in expenses and $264.5 million in revenues, set to be finalized next June. The board approved the proposed budget in a 10-1 vote—the sole opposition vote belonged to Regent Baranowski.