TOWSON UNIVERSITYS REPORT ON INTERCOLLEGIATE ATHLETICS

I. Introduction
During the past two and one half years Towson University (TU) has completed a series of studies regarding the future of its Intercollegiate Athletics program (ICA). This Report on Towson University Intercollegiate Athletics will synthesize the analyses and findings from these prior studies and draw from them a roadmap for the future of the athletics program. The Report articulates the goals and expectations for excellence in athletics at TU. The document includes major recommendations and action items. The first of the prior studies was developed by the Black and Gold Task Force, a campus and community-wide group appointed by then president Dr. Bob Caret in Fall 2010. The Task Force was focused on assessing the strengths and weaknesses of the TU Department of Athletics. As part of its work plan, the group conducted a benchmarking exercise that compared and contrasted TU with its fellow Colonial Athletic Association (CAA) institutions. This served to establish a baseline for future planning in areas ranging from athletic competitiveness and academic support for student-athletes, to facilities, funding, marketing, and compliance with Title IX requirements. Under the direction of its new Athletic Director, Michael Waddell, the Department of Athletics was commissioned by Dr. Caret to prepare a strategic self-study of the ICA Program. Building upon the framework of the Black and Gold Report, the Department was charged with reviewing both the internal organization of the athletics program and the external landscape of intercollegiate athletics, including the strategic issues facing a mid-major institution and conference. From this environmental scan, it would outline a path forward for revitalizing the TU athletics program. The Department of Athletics Report was submitted to newly appointed president, Dr. Maravene Loeschke, in September 2012. It proposed three overarching strategic priorities for success: a) academic and athletic competitiveness for all teams; b) compliance with the gender equity requirements of Title IX; and, c) financial sustainability and affordability. Achieving the transformational intent implicit in the three priorities would require fundamental changes to the existing athletics program. One expression of this change was a specific proposal to discontinue two mens teams baseball and soccer and add a mens tennis team to the program. Team reconfiguration (i.e., to add or eliminate) was deemed critical to fulfilling the studys proposed priorities. It was also well understood that the elimination of team sports was a controversial and sensitive matter. Consequently, shortly after receiving the self-study from the Department of Athletics, President Loeschke commissioned an external review of the report. Thus, TUs Athletics Task Force was formed and charged with reviewing the specific recommendation of the Athletics Department Report to eliminate two mens sports teams. The Task Force was also asked to conduct a careful and candid assessment of the underlying factual basis for the recommendation.

In the course of its work, the Athletics Task Force would review the initial Black and Gold Task Force Report. It would also evaluate NCAA and CAA gender, roster, and fiscal standards as well as the numerous analyses contained in the prior studies and other external reports. The Task Force solicited feedback from the campus community including two campus town hall meetings, and conducted interviews with stakeholder groups and alumni. To test the efficacy of the Athletics Department Reports recommendation to eliminate mens baseball and soccer, the group developed a dozen alternative scenarios to compare and contrast with the recommendation. These scenarios ranged from alternative reconfiguration options to several strategies that avoided team elimination altogether. The options were vetted before the Task Force submitted its assessment to the President. The notion of team elimination impacted the three strategic priorities discussed above in very concrete ways. Cost reduction would be achieved by eliminating two teams with fairly large squads and budgets. It would raise the potential for improving the competitiveness of the remaining teams as well as the individual student-athletes through additional academic support and more scholarships. But, the recommendation to reduce the number of mens teams was most strategic to the matter of Title IX compliance. It represented a reversal of the prior practice for achieving gender equity. Traditionally, TU would add womens teams as the proportion of females increased in the overall student population, an approach acceptable to the governing body. However, this approach failed to reach true gender proportionality and, thus, did not satisfy compliance standards. It was argued that female/male proportionality could be better achieved by reducing mens teams while boosting, and not compromising, both competitiveness and financial sustainability. A majority of the Athletics Task Force members concluded that the proposed elimination of two mens teams was appropriate. The group recognized that the proportionality approach to gender equity was the optimal approach. The group also concluded that the recommendation to eliminate baseball and soccer and add tennis was the best option available. Proportionality would be achieved: the combined rosters of the teams would show a 61% female / 39% male ratio, matching the ratio of the entire student population. Also, the group reasoned that the option would improve academic and athletic competitiveness by directing increased scholarships and budgeted resources to the remaining programs, allowing them to add critical coaching positions, and bolstering their resources for recruiting. It would also be a major factor to balance the athletics budget. Most importantly, in the future, the recommendation would enrich the student-athlete experience at TU. The section below (II) is an environmental scan of the intercollegiate athletics landscape in which the TU Athletics program operates. It is followed by a review of the challenges facing the TU ICA program, specifically Title IX Compliance, Academic and Athletic Competitiveness, and the Financial Sustainability and Affordability of the program (III). In the final section (IV) the recommendations of President Loeschke to strengthen the TU ICA program are discussed.

II. The Landscape of Athletics at Towson University

Towson University (TU) is a major comprehensive public university and a constituent institution of the University System of Maryland (USM). It is the second largest residential university in Maryland with a Fall 2012 total enrollment of 21,960 students (17,988 undergraduates; 3,972 graduates). Founded in 1866, TU has grown to offer more than 100 bachelors, masters, and doctoral degree programs in the liberal arts and sciences and applied professional fields. Towson Universitys reputation also has grown to include national accolades: Kiplingers Personal Finance included Towson University in the magazines list of 100 best values in public colleges for 2012-2013; U.S. News and World Reports 2013 Best Colleges ranked TU 44th among public regional universities; The Education Trust named TU third among the nations public institutions as a Top Gainer in Black Student Graduation Rates. The Intercollegiate Athletics Program contributes to the institutions rich history and national recognition. TU began organized athletics teams in the late 1910s. Today, the Department of Athletics has an FY2013 operating budget of $18 million (including grants-in-aid), manages 576 student-athletes (duplicated count), and 20 sports programs. Along with the University of Delaware, TU offers the largest number of sponsored sports in the Colonial Athletic Association (CAA). The 20 sponsored sports programs are: Table 1: Towson University Sponsored Sports Programs and Roster Size Baseball (36) Gymnastics (15) Mens Basketball (15) Mens Lacrosse (54) Womens Basketball (14) Womens Lacrosse (29) Womens Cross Country (12) Mens Soccer (24) Womens Indoor Track & Field (39) Womens Soccer (33) Womens Outdoor Track & Field (39) Softball (22) Field Hockey (25) Mens Swimming & Diving (27) Football (108) Womens Swimming & Diving (39) Mens Golf (10) Womens Tennis (13) Womens Golf (8) Volleyball (14)
*2011-2012 rosters *Duplicated Count

In addition to preparing athletes for competition, the Department of Athletics is also focused on the academic success of its student-athletes as well as sustaining a positive relationship with the larger campus community. The program provides 523student-athletes (unduplicated count) with support for their academic pursuits, physical well-being and training, and leadership development to become future leaders in their community. For the overall student population, faculty, staff, alumni, friends and community members, the ICA program is a source of pride for the campus and provides venues for connecting with colleagues. Athletics is also a strong marketing vehicle that promotes Towsons core values and generates pride in and allegiance to the institution, not just student-athletes but also the student body as a whole and alumni.

TU was initially a member of the College Division of the NCAA until 1974 when the organization changed its subdivisions to I, II and III. At that time, Towson moved into Division II overall, except for football which went to Division III and did not offer scholarships. Five years later, Towson moved from Division II to Division I except for football. At that time, football was elevated from Division III to Division II and began offering scholarships. Football then moved to Division I-AA (now called the Football Championship Subdivision or FCS) in 1987 when the NCAA no longer allowed multi-level athletics programs for Division I. During its 30-plus years as a member of Division I, TU expended a good deal of effort exploring the athletics landscape for a sports environment relevant to its mission in both academic and athletic terms. TU has been a member of five different conferences (ECAC Metro South 1979-82; East Coast Conference 198292, Big South Conference 1992-95; and the America East Conference 1995-2001). For a period of time TU was an independent program as well. Finally, in 2001 TU joined the Colonial Athletic Association, where it remains today.

The Colonial Athletic Association

The Colonial Athletic Association (CAA) is one of the top mid-major conferences in NCAA Division I. Its full-time members are located in East Coast states from Massachusetts to Georgia. Most of CAA members are public universities, with four in Virginia alone. The conference headquarters is in Richmond, Va. The CAA was historically a southern affiliation until the addition of five northeastern schools (all from the rival America East Conference) several years ago. On the playing field, the CAA has produced 16 national team champions in five different sports (the most recent being the Villanova Wildcats who won the 2009 Division I FCS football championship), 33 individual national champions, 11 national coaches of the year, and 11 national players of the year. However, since joining the Colonial Athletic Association, Towson Athletics has been challenged in both a budgetary and a competitive sense. In comparison to the resources of its CAA colleagues TU faces a gap between the financial resources necessary to compete successfully and the actual dollars it has available to do so in what is considered to be one of the nations premier mid-major conferences. The conference is not immune to the shifts in teams and in conferences that we witness in college athletics today. In October 2012, the University of Albany and Stony Brook University were invited into the CAA for football-only membership while the College of Charleston, a nonfootball playing ICA program, was accepted into the CAA as an all-sports member beginning in the fall of 2014. In the spring of 2013, the CAA is expected to vote on adding several additional institutions to the conference. The profiles of prospective and new member institutions are all achievement oriented and will increase the need for Towson Athletics to become even more proactive in its goal of increasing overall competitiveness. The bar is being raised for schools to be able to compete for championships in the CAA. Many Division I schools not members of the six Bowl Championship Series Conferences or BCS conferences (i.e., the Big Ten, Big 12, ACC, PAC-12, Big East, SEC), including institutions within the CAA, have had to confront several significant challenges. They have done so by making difficult decisions regarding: a) compliance under Title IX, especially with regard to gender equity; b) budget planning in a difficult fiscal environment for universities, students and families; and, c) academic and team competitiveness at a level that is sufficient to meet the overall

institutional goals for their ICA programs and those programs' contribution to the entire institutional community. Among the critical success factors for an ICA program is the determination of the proper size and range of the program itself. Program scope has a substantial impact on strategies for responding to the aforementioned challenges. The elimination of team sports has often times been a necessary component of the institutional response. Over the last 20 years, the CAA has had 29 teams discontinued by current member institutions. These schools have added a total of 18 sports, resulting in a net loss of 11 programs. Of the 18 teams added, 83 percent were womens sports, while 68 percent of programs dropped at the same time were mens programs. These decisions include the elimination of 10 sports at JMU (2007); this included 7 mens and 3 womens sports, football at Hofstra (2009) and Northeastern (2009). In 2011 Delaware dropped Mens Cross Country and Track. At present, several CAA schools are in early stage discussions of sport elimination.

TUs History of Reconfigured Sports

What follows is a short history of programmatic reconfiguration at TU. To maintain proportionality, Towson Athletics has had to assess program eliminations and expansions multiple times. In 2003-2004, TU was faced with the difficult decision of eliminating four mens sports for reasons similar to its current concerns. The following chart lists TUs reconfigured sports, the year the sport started, and the sports status:
Sport Wrestling Track - Outdoor - Men's Tennis - Men's Cross Country - Men's Gymnastics - Men's Track - Indoor - Men's Track Indoor - Womens Soccer - Womens Track- Indoor - Womens Golf- Womens Year Started 1926 1940 1947 1956 1969 1976 1976 1992 1995 2007 Status Eliminated after 1981-82 Eliminated after 2003-04 Eliminated after 2003-04 Eliminated after 2003-04 Eliminated after 1983-84 Eliminated after 2003-04 Eliminated in 1992 Added for Title IX Reinstated for Title IX Added for Title IX

The additions of womens soccer in 1992 and womens golf in 2007 were for Title IX gender equity compliance purposes and increased female participants in the athletics program. In both cases, Towson was a member of a conference that sponsored each sport. As such, competition and conference championship opportunities were available immediately.

The CAA and TU are not alone in implementing program realignment. Many athletics programs across the country have added and dropped sports as they searched for the proper balance between fiscal sustainability, compliance, and competitiveness. In the last six months, the University of Richmond (mens soccer & mens track & field) and Mount Saint Marys (mens soccer, mens golf, womens golf) have dropped sports while UNC Wilmington has announced plans (February 6, 2013) to study the elimination of sports following the 2013 spring semester.

III. Challenges Facing Towson University Athletics

What follows is a discussion of the current challenges facing TU. These are: Title IX Compliance, Financial Sustainability & Affordability, and Academic and Athletic Competitiveness.

1.

Title IX Compliance

The federal law prohibiting sex discrimination in educational institutions who either directly or indirectly receive federal funding is Title IX of the Educational Amendments Act of 1972 (amending the Higher Education Act of 1965). The act was amended by the Civil Rights Restoration Act of 1987. The law states that "no person in the United States shall on the basis of sex be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving federal financial assistance. The Act in 1987 expanded the definition of program or activity to include all the operations of an educational institution that receives federal funds and clarified that this could be either through directly receiving these funds from the federal government or indirectly through means such as the students at the school receiving federal financial aid funds. Title IX forbids sex discrimination in all university student services and academic programs including, but not limited to, admissions, financial aid, academic advising, and athletics. TU regularly monitors its compliance under Title IX. Compliance with the gender equity aspects of the article has long been problematic for the institution. On the matter of athletics, a university can achieve Title IX compliance in one of three ways: a) Prong 1 is a method of satisfying compliance standards by achieving proportionality between the percentage of women enrolled at the institution and the percentage of women participating in the Universitys Intercollegiate Athletic Program; b) Prong 2 satisfies compliance standards by demonstrating a history of continuing the practice of adding womens sports to increase the player participation levels; and, c) Prong 3 achieves compliance by demonstrating that the institution is meeting the interests and abilities of women (usually through survey methods). Historically, TU has relied upon the Title IX strategy known as "Prong 2" that specifically required the institution to add a women sports team every five years until substantial proportionality is achieved. However, this strategy has not kept pace with the changing demographics of the TU undergraduate population as Table 2 below indicates. The "Prong 2" approachadding women's teamshas also become increasingly cost prohibitive due to the expense involved. 6

It should be noted that the definition used for computing Title IX proportionality is based on fulltime, undergraduate, degree-seeking students.1 Table 2 Towson University - Gender Distributions of Undergraduates
2007-08 2008-09 39 % 61 % 2009-10 39 % 61 % 2010-11 39 % 61 % 2011-12 39 % 61 % 5-Year Avg. 29,54 9 45,96 9 75,51 8 39 % 61 % Undergraduate Population 39 Male 5,539 % 5,997 61 Female 8,641 % 9,234 14,18 15,23 Total 0 1 Student-Athlete Population 50 Male 287 % 283 50 Female 290 % 301 Total 577 584

5,962 9,319 15,28 1

6,049 9,307 15,35 6

6,002 9,468 15,47 0

48 % 52 %

265 301 566

47 % 53 %

262 295 557

47 % 53 %

274 302 576

48 % 52 %

1,371 1,489 2,860

48 % 52 %

Notes: Data from Towson University Institutional Research (K. Sellers) Data is for full-time, undergraduate degree-seeking individuals per Title IX definition

In July 2011, as part of its ongoing monitoring efforts, TU engaged the law firm of Libby OBrien Kingsley and Champion (Title IX Consultant) to conduct a Gender Equity Review (Review). [See - Gender and Equity Subcommittee of the Intercollegiate Athletics Committee Report on Gender and Diversity Equity, March 8, 2010.] The Title IX Consultant is a nationally recognized expert on Title IX compliance. Based upon a recent court decision, the consultant warned that TU could not rely on its Prong 2 approach to gender equity compliance. In Mansourian v. Regents of the University of California Davis, 602 F. 3d 957 (2010)) the court held that Prong 2 compliance cannot likely be achieved if a university eliminates a womens team. This decision complicated matters for TU because the institution suspended womens track in the 1990s for a period of time. The Title IX Consultant strongly advised against relying on Prong 2 compliance, and instead argued that a safe harbor approach would be more prudent.2 The Consultants review concluded that elimination of mens sports was the most viable and long term method for maintaining Title IX compliance.3

This is different than the numbers reported in the EADA report, as it now includes part-time and nondegree-seeking students per a move to use IPED numbers two years ago. 2 See emails from Title IX Consultant dated August 3, 8 and 10, 2012 in appendix. 3 See the confidential report in appendix.

When combined with the existing fiscal imbalance in the TU ICA operation discussed in the following section, it appears that a strategy based upon the continued expansion of TUs ICA program through the addition of women's teams to meet compliance requirements adds significant financial risk to the ICA as a viable self-support program.

2.

Academic and Athletic Competitiveness

Competitiveness is a value. Competitive organizations are usually characterized as being focused on achieving their strategic priorities, are dedicated to continuous improvement, and seek to operate in a quality fashion in all that they do. A university benefits when its teams are competitive, both academically and athletically, within its respective conference and similarly situated conferences. Competitiveness increases interest within the larger campus community, and it is a critical success factor for a financially stable program that generates sufficient resources to continuously invest in improvements. Most importantly, competitiveness enriches the higher education experience for both student-athletes and the general student population. The Black and Gold Task Force Report found that TU had not continuously and consistently articulated an operating philosophy of competitiveness in Division I sports and in the CAA. In the past TU has followed what may be described as a less than adequate strategy to achieve both academic and athletic competitiveness in its ICA program. The operational philosophy at TU has been to ensure that the university was majorly competitive in its top tier sports (Tier 1) and as competitive as resources would allow for its remaining teams, which are characterized as Tier 2. (To some, competitiveness is not necessarily a strategic priority. Rather, greater access through the formation of as many different athletic teams as possible is of greater importance.) This philosophy, when coupled with the practice of assembling as significant a number of teams as needed to ensure compliance, has resulted in several teams being uncompetitive on the field, including an inability to generate sufficient financial resources.

Per Student-Athlete Funding

Based on FY2011 funding, Towson Athletics was 10th out of the 12 CAA institutions in overall per student investment, and last among football playing members. TU allocated $24,654 per student-athlete. The top four campuses in the CAA at that time (Virginia Commonwealth, Hofstra University, Northeastern University and the College of William and Mary) were budgeted at $40,596 per student-athlete, or 65% greater than TU. This has impacted TUs ability to compete. Over the last five years, Towson sports teams posted a combined winning percentage of .482. Only six of 20 teams attained an overall winning record. TUs revenuegenerating sports football, mens and womens basketball, mens and womens lacrosse and gymnastics totaled a combined record of 323-328 (.496). This includes the superior records of womens lacrosse (66-28) and gymnastics (91-24). The three mens sports have a combined record of 87-202 (.301). Achieving competitiveness would require greater attention to all aspects of the student-athlete experience to ensure that the program and its athletes are well suited for competition and have every chance to succeed. Based on the findings of the ICA studies, competitiveness at TU would require focus on the following strategies: Investing in scholarships across all sports Building roster sizes sufficient to compete in the Colonial Athletic Association (CAA) 8

Increasing academic support for student-athletes Providing competitive salaries for critical coaches and staff Increasing recruiting budgets to bring the best prospective student-athletes to TU Enhancing sports performance support (sports medicine, strength & conditioning) Investing in facilities and renewal Enhancing the travel per diem to provide healthy meals for all athletes and enhancing meal plans for athletes on campus to a minimum of 3 meals per day Pursuing strategic scheduling to raise the profile of the University regionally and nationally

Below is a status report regarding two student-athlete support categories from the above list. In these two cases TU has already increased investment in competitiveness strategies related to student-athletes. a. Academic Support In FY2011, the academic support area was strengthened through the addition of two full-time staff members ($40,000 plus benefits for each position). Their duties included working with other members of the academic staff as well as administrators and coaches to implement strict class attendance policies, which were developed by the Director of Athletics. As a result, student-athletes have attained a composite GPA over a 3.0. Fourteen teams improved in composite GPA in 2012, with perhaps the most dramatic improvement occurring in mens basketball. Prior to 2011, academic and program oversight for basketball in particular was inadequate and was a factor in the team failing to meet NCAA APR standards. Due to below standard APR scores, the program was declared ineligible for the 2013 NCAA Tournament and CAA Tournament. Since the addition of the two FTE staff members, the mens basketball team has achieved the highest cumulative team GPA in the history of the program at 2.997, and is likely to regain its post season eligibility for the 2014 season.

b. Sports Medicine and Strength & Conditioning

Sports Medicine and Strength and Conditioning added two new employees in FY2011, providing full care and coverage to student-athletes. This included one full-time employee ($55,000 plus benefits) and one part-time employee ($18,000 Contingent II). When paired with a new external partnership with Union Memorial Hospital/MedStar, the program began offering enhanced services to student-athletes that are more suited to properly care for studentathletes training in a Division I program and has had a positive effect on the health and well being of student-athletes at TU. With its focus on strength training, speed and agility training as well as flexibility work, no other investment has had greater impact on athletic competitiveness and injury prevention than this program. A robust sports medicine and strength and conditioning program is considered a critical success factor in sustainable competitiveness These relatively modest investments in competitiveness appear to have positively affected the ICA program. There have been gains in the classroom and on the playing fields. In 2011 the football team won the CAA title, the first in its 12-year history in the conference and followed it with a second conference title in 2012. In posting winning seasons in each of the 9

past two years attendance levels increased significantly. The mens basketball program is in the midst of its first winning season in 17 years. Mens lacrosse has reemerged as a preseason Top 25 team nationally. And finally, fundraising, corporate sponsorships, and ticket sales have improved. 3. Financial Sustainability and Affordability The USM Board of Regents has expressed in policy its goals and expectations for the operation of intercollegiate athletics. These policies were last revised in 2011 and established expectations for financial management, academic performance of student-athletes, and compliance with NCAA rules, as well as state and federal laws and regulations, including Title IX. Intercollegiate athletics are to be managed on a self-supporting basis, meaning ICA should be able to rely on its own resources for financial operation, with few exceptions. In working towards improving the oversight environment, the Regents recognized the range of approaches to accounting for ICA costs currently in place across the university system. Institutions are responsible for ICA decision making and are responsible for their specific accounting and costsharing standards for intercollegiate athletics. Underlying their thinking was the Regents view that student-athletes are first and foremost students, and it remains the Boards expectation that student-athlete academic performance and progress will be comparable to that of non-athletes. The NCAA has recently adopted standards for student-athlete academic progress that now also carry fiscal sanctions when institutions fall short. Sanctions include loss of athletic scholarships and ineligibility for postseason competition.

Fiscal Overview of Towsons ICA Program

The TU athletics program is beset by a structural deficit in its operating budget. In FY2012 actual expenditures exceeded ongoing revenues by $1.36 million. Spending totaled $18.8 million and revenues equaled $17.4 million. Approximately $850,000 of the deficit was due to a planned use of ICA fund balance. FY2012 was the first of a three-year enhancement in ICA including investments to increase revenue sources through development, sponsorships, and other activities. These investments returned early benefits and show real promise in increasing revenues in the long term. Nevertheless, under a status quo set of assumptions, the operating deficit will grow. This structural imbalance is displayed in Table 3 below and is explained in the ensuing discussion on ICA Expenditures and ICA Revenues.

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Table 3 TU Department of Athletics Budget The Status Quo Scenario

(in 000's) Actual FY 12 REVENUE Other Revenue Auxiliary Student Fee Transfer Total Revenues $3,332 14,092 3 17,427 $3,414 14,159 0 17,573 $3,459 14,411 0 17,870 $3,463 14,991 0 18,454 $3,467 15,444 0 18,911 $3,472 15,911 0 19,383 $3,476 16,391 0 19,867 Proj. FY 13 FY 14 FY 15 FORECAST FY 16 FY 17 FY 18

EXPENSES Payroll Expenses Operating Expenses Internal IDC/Facility Use Total Expenses Net Gain (Loss) Beginning Fund Balance Ending Fund Balance 8,346 9,781 655 18,782 (1,355) 3,356 2,001 9,148 8,453 669 18,270 (697) 2,001 1,303 9,137 9,138 500 18,775 (906) 1,303 397 9,411 9,360 510 19,281 (826) 397 (429) 9,694 9,588 520 19,802 (890) (429) (1,320) 9,984 9,972 541 20,497 (1,114) (1,320) (2,434) 10,284 10,370 563 21,217 (1,350) (2,434) (3,784)

ICA Expenditures at TU

Given the FY2012 shortfall, budget cuts were implemented in FY2013 and revenues increased somewhat due to modest enrollment growth, two large football guarantees and improved fundraising. However, projected expenditures for FY2013 will again exceed revenues. The current estimated shortfall is approximately $700,000 and although this gap is less than that of a year ago, it will cause the remaining fund balance to decline still further. TU will continue to run operating deficits. Of the 13 options considered by the Athletics Task Force (the last of the three ICA studies), every option produced deficits spanning the next several years, and ten failed to balance the budget over the long term. Importantly, as Table 3 above shows, under a status quo scenario, TU will exhaust its remaining Fund Balance in FY2015. Left unattended, the deficit would grow to $3.8 million by FY2018, clearly an unsustainable and unacceptable path. Also, the ICA program would likely fail in achieving competitiveness, both academically and athletically, and would not attain gender compliance with Title IX. The deficit would grow principally because of salary adjustments. In FY2014 there will be a 3% COLA in January and a 2.5% merit pay increase in April. On the revenue side, the scenario raises 11

student athletics fees in FY2015 by 3%, followed by 2% annual adjustments through FY2018. The status quo scenario does not provide for increased investment through reallocations between the programs since it assumes the current 20 team setup. There is also the danger of entering into a cycle where expenditure cuts cause revenue shortfalls, leading to more spending reductions and the obvious consequences of those actions. ICA Revenues at TU ICA revenues at Towson consist primarily of student fees with ticket sales, sponsorships, NCAA/CAA assistance, guarantee games and fundraising making up the remainder of the revenue. Each of these is examined below. a. Student Fees While TU, with 17,988 undergraduate students, has the second-highest athletics fees among University System of Maryland institutions (at a per full-time student cost of $798 annually) and it has the greatest number of teams (20) among the eight USM campuses with sports programs. TU has the fifth-highest percentage of athletics fees to general fees (.323). TU has not raised student fees since FY2012 when it increased fees by four (4) percent. It should be noted that the highest USM student athletics fee in USM is UMBCs $867 annual charge. However, approximately $100 of the UMBC fee is dedicated to recreational sports. Thus, TUs fee is actually the highest charge dedicated exclusively to intercollegiate athletics. When looking at athletics fees from a CAA perspective, TU has the third-highest athletics fee ($798) of the seven CAA schools that responded to the survey (George Mason, James Madison, UNCW, Northeastern, William & Mary, and Georgia State). Three other CAA schools do not have athletics fees but receive university support (Delaware, Drexel, and Hofstra). As a public university, fee affordability is a key concern of the institution. Inflationary adjustments will need to be made as costs rise, especially since the State is once again authorizing wage increases that will be applied to all regular employees of the University, including TUs ICA staff. Student debt is a major problem. It is important to protect the economic interests of students and families and be prudent in the setting of tuition and fees. b. Ticket Sales Sales of tickets to sporting events generated $269,000 in FY2012. While this was an improvement over the prior year, revenues remain well below FY2010 and 2011 totals. However, these ticket revenues included revenue from the NCAA Womens Lacrosse Championship which Towson University hosted. For most ICA programs, football and basketball are the main revenue producing sports. Seating capacity is a factor in ticket revenue potential of an institution in its revenue producing sports. (Of course, capacity is a cost that must be reasonably related to attendance risk.) Two CAA member schools - James Madison (JMU) and the University of Delaware (UD) - are institutions where ticket revenues comprise a relatively larger percentage of total revenue than Towson. TU ticket revenue is less than 2% of the $17.6 million in overall FY2013 ICA revenue mentioned above. With a much larger ICA budget overall, JMUs ticket sales account for approximately four percent of total revenue at $1.1 million: this is four times the dollars collected by TU. UDs ticket 12

sales account for roughly eight percent of total revenue at $2 million or seven times TUs actual revenue. Much of this difference is related to seating capacity in football: JMU seats 25,000 and UD seats 22,000. TUs Unitas Stadium seats 11,200. In the last two seasons, TU Footballs average game attendance was approximately 80 percent of capacity. In fact, 5 of the top 8 crowds in TU history attended Unitas Stadium games over the past two seasons. However, as part of the athletics fee, students attend games for free. Consequently, while some potential for increased football ticket revenue exists through greater football attendance, it will be balanced with the likely increase student demand. With regard to TU Basketball, following 17 straight losing campaigns in the mens program, the team is making great strides under head coach Pat Skerry (who was hired in April 2011). The team has posted the greatest one-year turn around in terms of victories in CAA history during the 2012-13 season. Attendance is well below capacity for basketball at this time and the team is academically ineligible for post-season play. However, the new Tiger Arena is set to open for the 2013-14 season. With a more competitive team, and, reinstatement of eligibility for postseason play (due to improved academic performance), the opportunity to increase revenue from basketball over the longer term is greatly enhanced. Here, too, student interest in attending games may temper revenue gains from ticket sales. c. Sponsorships Given the economic model for mid-major athletics conferences, TU and the CAA do not share in high dollar television contracts or significant conference revenues that exist within the major conferences. To improve results in sponsorships, TU contracted with CBS Collegiate Sports Properties in 2011 to advance all athletics sponsorships. This change was coupled with a reduction in institutional costs. Previously, the operation of the sponsorship department actually cost more than sponsorship collections. The Athletics Department reallocated positions to the Tiger Club for the purpose of adding resources for expanded fundraising (see below). d. Fundraising Although TU achieved its highest Tiger Club fundraising year ever in FY2012 at $624,220, the institution does not have a long or consistent history of fund raising production from athletics. The development environment remains difficult in the aftermath of the national recession. For example, the University of Delaware (UD) and James Madison University (JMU) raised over $1.6 million each in FY2012, a substantial share of their overall operating revenues. However, each institution declined from the prior year, with UDs decline at 18 percent. Fundraising is a critical success factor in the ICA program just as the overall TU Capital Campaign is for the entire campus. Athletics fundraising must increase in order to achieve financial sustainability in the athletics program. Additional fundraising positions were added to the development program in Spring 2011 and the operation has been reorganized. University Advancement professionals and the Athletics Department fundraising staff are now in a structured collaboration. This has created an

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integrated athletics fundraising approach with central university development efforts. Both development and sponsorships benefited from the investments.

IV. Presidents Recommendations on the Towson University Athletics Program

After extensive and careful analysis, the Administration recommends an ambitious yet pragmatic strategy that will put our ICA program on the path to excellence. We will be clear and consistent about our vision and value system for college athletics: to enrich the student-athlete experience and the experience for our overall student body. We will build upon our strengths, and address the flaws in the current program. It will require that we make difficult and smart choices and we will maintain a sense of discipline throughout implementation. The TU Athletics program benefits from the strong leadership of its Athletics Director and his team of coaches and staff. The Department of Athletics has already implemented a number of actions that substantively improve the program. The institution will build on their success and will take an optimal approach to advancing the ICA program. This means a sharp focus on program excellence in all of its responsibilities. The Department will be charged with implementing three overarching strategic priorities: Academic and Athletic Competitiveness; Compliance with Title IX Gender Equity Requirements; and, Financial Sustainability and Affordability. Reconfigurations of our team sports will be required to simultaneously improve the athletics program, achieve gender equity, and put ICAs fiscal house in order. It will also require a safe harbor Prong 1 approach to achieving gender proportionality in the sports program. Finally, it means working toward a financial model that protects students and families from high fees while providing the appropriate level of funding for student athletes. A description of our most critical responses for achieving the overarching strategic goals follows.

Strategy Elimination of Mens Baseball and Mens Soccer

The review of the preliminary recommendation to eliminate two teams, mens baseball and mens soccer, and add mens tennis, by the Athletics Task Force was exhaustive. Table 4 below provides a summary of the thirteen options developed by the Athletics Task Force and includes the predicted outcomes for each of the three strategic priorities. Nine of the options involved the elimination of teams and four did not.

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Table 4: Options Reviewed

Acad. & Athletic Comp.* Fiscal Sustain. & Afford.* 5-Year Cum. Gain (Loss) $000 Year-5 Net Gain (Loss)$000 Athletic Gender Proport. (F/M)

Option

Title 9* Compliance

Athletes Affected

Year-5 Scholarship Changes Women Men 4.7 4.7 4.7 4.7 (3.4) (3.4) (4.7) 4.7 (4.7) 4.0 (12.1) (12.1) 2.1 Net 20.7 37.7 26.1 25.1 28.5 20.5 15.5 25.1 27.2 37.9 9.9 15.9 36.5

3 4 6 8 2 13 12 7 1 9 11 10 5

Elim. M-S, M-BB and W-FH, add M-T Elim. M-S, M-BB and W-FH, add M-T and W-R Elim. M-S and BB, add M-T Elim. M-SW and BB, add M-T Elim. only BB, M-S 1 Schshp, add W Rugby Elim. BB, M-S only 1 schshp, add W-SVB, W-B Elim. M-S, Keep BB with only 1 Schshp, add WSVB and W-B Elim. M-S and M-SW, add M-T Elim. only M-S, BB 1 Schshp, add W Rugby Roster Re-distribution Keep M-S & BB with only 1 Schshp, add W-R Keep M-S & BB with only 1 Schshp, add W-R, W-SVB and W-Bowl Add WR, adj Roster Sizes *Decision Priorities

Y Y Y Y Y N N Y Y N N N Y

Y Y Y N N N N N N N N N N

3,238 1,728 1,495 573 (515) (1,026) (1,313) (1,427) (2,277) (2,757) (3,349) (5,997) (6,440)

858 284 277 (25) (138) (153) (69) (107) (180) (758) (63) (666) (964)

N Y Y P Y Y Y N P P Y Y Y

86 86 62 59 62 62 62 51 62

58/42 61/39 62/38 60/40 61/39 62/38 61/39 59/41 60/40 60/40

16.0 33.0 21.4 20.4 31.9 23.9 20.2 20.4 31.9 33.9 22.0 27.9 34.4

62 62

61/39 62/38 62/38

S (Soccer) BB (Baseball) FH (Field Hockey) T (Tennis) R (Rugby) SW(Swimming/Diving) SVB (Sand Volleyball) B (Bowling)

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As the table shows, only two options appeared to satisfy the goal of achieving the three priorities. Both of the options involved the elimination of teams. The first of these scenarios is Option 4 in the table. It would eliminate three teams (mens baseball and soccer, and womens field hockey). It would also add two teams (mens tennis and womans rugby). This option would impact 86 athletes and would unnecessarily eliminate one womens team with history at TU in favor on starting a new womens team sport. The second option that satisfied the priorities is Option 6. It would eliminate two teams (mens baseball and soccer) and add one team (mens tennis). It would affect 62 athletes. It is designed as a Title IX Gender Equity Prong 1 approach that achieves the proportionality requirement of 61% female undergraduate enrollment to 61% female sports participation. This change is done in a manner that provides for funding to improve both academic and athletic competitiveness and a balanced budget. Option 6 was selected as the best option to achieve the overarching strategic priorities. It involved fewer teams and athletes. It avoided eliminating a womens team, which may have had a negative impact on achieving Title IX compliance. Finally, its financial results were similar to Option 4. As discussed below, TU ICA would be self-supporting and would provide the flexibility to invest in competitiveness.

Strategy Require a Balanced ICA Self Support Budget

The importance of operating ICA as a self support activity was discussed earlier. Suffice it to say, self support status is expected by institutional leadership, the USM Board of Regents, and the Maryland General Assembly. The plan takes the form of a 5-year forecast, beginning in FY2014 and running through FY2018, to achieve a balanced budget. As you will note, the plan is tightly balanced the FY2018 surplus is technically balanced with a slight operating margin for the year at $7,500. The margin compares to a $21.0 million athletics budget. Importantly, by the close of FY2018 the aggregate fund balance will reach nearly $1.0 million. (See Table 5 below)

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Table 5 Budget Sustainability and Affordability Model

(in 000's) Actual FY 12 REVENUE Other Revenue Auxiliary Student Fee Transfer Total Revenues EXPENSES Payroll Expenses Operating Expenses Program Changes: Men's Soccer - Elim. Expenses Men's Soccer - Scholarships Men's Baseball - Elim. Expenses Men's Baseball - Scholarships Men's Tennis - Add Program Scholarship inc. Comp. & Title IX Reallocations to Women's Sports Internal IDC/Facility Use Total Expenses Net Gain (Loss) Beginning Fund Balance Ending Fund Balance 0 0 0 0 0 0 0 655 18,782 (1,355) 3,356 2,001 0 196 0 212 0 0 0 669 18,270 (697) 2,001 1,303 (211) 184 (278) 158 97 0 160 500 18,465 (441) 1,303 862 (216) 105 (284) 113 99 0 163 510 18,827 21 862 883 (222) 39 (291) 48 101 250 166 520 19,446 48 883 931 (230) 0 (302) 0 105 350 173 541 20,130 54 931 985 (237) 0 (313) 0 109 531 180 563 21,004 8 985 993 8,346 9,781 9,148 8,045 9,137 8,718 9,411 8,927 9,694 9,142 9,984 9,507 10,284 9,888 $3,332 14,092 3 17,427 $3,414 14,159 0 17,573 $3,613 14,411 0 18,024 $3,856 14,991 0 18,848 $4,050 15,444 0 19,494 $4,273 15,911 0 20,184 $4,621 16,391 0 21,012 Proj. FY 13 FY 14 FY 15 FORECAST FY 16 FY 17 FY 18

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The major revenue assumptions are as follows. Enrollment levels will meet projections, an important factor in athletic fee collections. Enrollment is expected to grow by 1,400 FTE over the five years. Almost 50% of the enrollment increase is projected in the first year of the plan and is related to the Governors investment in STEM and health care degrees and investment in completion strategies. The enrollment related revenue is, by far, the largest share of the overall increase in the FY2014 forecast at over $500,000. Consequently, we will know early in the plan if this key assumption holds. The plan projects an aggressive increase in revenues over the next five years from fundraising, sponsorships, ticket sales, and other non-athletic fee based revenue. The plan allows for the continuation of initiatives to build fundraising and sponsorships where early results show promise. When compared to the current level of revenues, these non fee revenue items are projected to increase by $1.2m or 35% by FY2018. If achieved, it will take the share of revenues to 20.3% of total revenue versus 19.7% today. It will also represent 20.3% of expenditures versus 18.7% presently. Last is the matter of athletic fee rates. The plan seeks to control the growth in rates in consideration of the costs students and families bear for college. In FY2014, fees will remain at current levels. It will be the third year of a freeze on fees. Beyond FY2014 there are modest increases built into the plan. In FY2015, fees will increase by 3%, followed by 2% increases per year through the remainder of the plan.

The major expenditure assumptions are as follows. Current services costs will be driven largely by changes in salaries and employee benefits. Earlier, it was mentioned that the State has authorized increases in salary for all regular employees including Athletics Department staff. The funds for salary increases must come from ICA revenue. Salaries are projected to grow by 9% over the next five years. It is a relatively conservative projection and will need to be assessed from year to year. On the one hand, the state government has shown an interest in supporting salary increases overall, particularly given the effects of the four year freeze on wages that began in FY2008. This would increase the burden on self support programs generally. On the other hand, when the State has faced financial problems it has a history of controlling salary levels to help balance the budget. In the early years of the plan it will be necessary to slow and then eliminate the use of fund balance. This plan eliminates reliance on fund balance between FY2015 and FY2016. The elimination of two teams will cut costs by approximately $500,000 in FY2014. The savings will help to reduce the use of fund balance almost immediately, taking it from almost $700,000 in FY2013 to approximately $450,000, a $250,000 reduction in fund balance use. Keep in mind, this savings is occurring as athletics fees remain frozen in FY2014. In FY2015 fees are anticipated to increase by 3% and, as a result, the budget reaches technical balance. This underscores the importance of careful monitoring of revenues and expenditures. 18

The campus has committed to maintaining scholarships for baseball and soccer athletes who have chosen to stay and graduate from TU. Over time, as these students graduate, or leave to pursue their athletic career elsewhere, spending on scholarships will decline naturally. This, too, will help achieve a balanced budget. The current spend on scholarships in the two discontinued programs approximates $400,000, and by FY2017 it will be eliminated. There are also plans to increase programmatic spending o An additional ICA cost will result from adding a mens tennis team to the program. It will cost approximately $100,000 per year. It will mean that TU has 19 sports teams, 13 womens teams and 6 mens teams. o There will be new funds for scholarships to improve athletic and academic competitiveness across all teams, and meet Title IX benchmarks for gender equity. These investments will begin in FY2016 at $250,000 and it will grow to $500,000 by FY2018. o There will also be budget reallocations to womens teams beginning at $160,000 in FY2014, and growing modestly from that point. o During the period there may also be strategic investments in student academic success and revenue raising activities.

Strategy A Culture of Excellence Academic and Athletic Competitiveness

Being a student-athlete is hard work. We expect them to do well in the classroom and on the court or field as well as serving as TU ambassadors to the larger community. We want them to win but only in the context of an environment that is focused on preparing them for lifes road ahead. We must have our values in proper order and adhere to them, and we must understand the rightful place of intercollegiate athletics on a college campus. ICA must participate in and add to the mission of the University. The Board of Regents has worked to establish sound expectations for student-athlete academic success. A Regents Workgroup on Athletics remains in place to monitor developments at USM institutions with intercollegiate athletics programs, financial management and academic progress and achievement for student-athletes System-wide. Once the Regents Workgroup ends its work, the Board Committee on Finance will review the management and finances of the institutional programs while the Committee on Academic Policy and Student Affairs will evaluate student performance. As was discussed earlier, the TU Department of Athletics is attempting to bring to the Universitys ICA programs a philosophy of excellence, which need not be repeated here. Suffice it to say, the results to date are very promising. The recommendation is to continue on that path. The larger campus community will work to support the Departments efforts, through dual reporting roles and collaborative efforts: 19

The TU Development Office will work collaboratively with the Departments fundraising and sponsorship staff to increase giving. The Office of Events and Conference Services will assume management control of the athletic facilities, a responsibility the Office is well suited to perform. You will note that the fiscal plan includes this E&E initiative and it should save significant dollars in the ICA budget. The Office of Administration and Finance will work closely with the Department of Athletics to plan and monitor spending. We seek to take risk out of the budget by informing ICA of the environmental trends at work that will also affect ICA financially. Also, the Office will work with the Department to pursue a naming rights contract for the new Towson Arena that will help to fund technology installations in the facility and provide for training equipment. University Counsel will continue to work closely with Athletics Compliance ensuring there is a checks and balance system in place. Academic Affairs will continue to work collaboratively with Athletics through the Intercollegiate Athletics Committee and our Faculty Athletic Representative.

ICA will continue to implement a number of initiatives and initiate other aspects of continuous improvement as follows: o o o o o o o o o o Make strategic investments in scholarships across all sports; Practice competitive roster management by building roster sizes sufficient to compete in the Colonial Athletic Association (CAA); Continue to increase academic support for student-athletes especially where the strategies are working; Ensure competitive salaries for critical coaches and staff; Within the above described budget model, make strategic investments in recruiting budgets to bring the best prospective student-athletes to TU; Continue to enhance sports performance support - sports medicine, strength & conditioning. This initiative has already had great effect; Comply with Regents policy goals regarding facilities renewal; Enhance team travel per diems and meal plans for athletes on campus to a minimum of 3 meals per day in order to provide healthy meals for all athletes; Pursue strategic scheduling to raise the profile of the University regionally and nationally; The athletic director will continue to emphasize student-athlete academic performance, regularly monitor through NCAA APR reports and benchmark with our CAA colleagues.

The resolution of the three issues facing the university requires our immediate action and attention and cannot be deferred. Over the past several months, I have carefully examined all 20

data, facts and budget projections used in the athletics proposal and task force report. In addition I have explored new projections, models, and comparisons with other Colonial Athletic Association schools and Division I programs. After a comprehensive review and analysis of all of the information, I accept the recommendations from athletics leadership and the Athletics Task Force to discontinue mens soccer and baseball and to add mens tennis starting in fall 2013. I strongly believe this decision must be made for the short and long-term stability of athletics at Towson. This decision is accompanied by many new procedures and additional supports for the department which will require involvement of individuals both internal and external to the university. It is not the end, but rather the beginning of building a stronger, more competitive Division I athletic program at Towson. Now the hard work must begin to continue progress in the identified areas to keep the program on its path to success.

What follows are several Appendices for the readers review of the issues and discussions in this Report. This concludes the Towson University Report on Intercollegiate Athletics.

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