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Exclusive Conversation With Penn State AD Sandy Barbour: The Books, The Stipends And The TV Deals

by on March 25, 2015 2:20 PM

Note: This is the first part in a three part series discussing the state of Penn State athletics with athletic director Sandy Barbour. 

Penn State athletic director Sandy Barbour's office in the lower level of the Bryce Jordan Center still smells like paint and fresh cut wood on early Wednesday morning as she takes a seat at her office table.

For a job that largely revolves around sporting events, Barbour's workplace is surprisingly bare when it comes to the usual wall decorations and school spirit you might expect in her office.

As it turns out, the smell of fresh paint and wood isn't a figment of the imagination. Just a few weeks ago a door in her office led to a conference room. The catch -- anyone who wanted to access the conference room had to go through Barbour's office. Running an athletic department is hard enough as it it, let alone when everyone is walking through your work space.

So like much of Penn State athletics, Barbour's office is in a transition phase and getting a new look. Just last week Barbour announced changes that reconfigured the structure of the department's line of communication with a few new jobs added to the mix. Across the street Penn State football is entering year two under James Franklin, just around the corner from Barbour's office, Pat Chambers is working off the energy of a new contract extension.

Simply put, it's a busy time for everyone.

For Barbour the challenges are perhaps maddeningly complex and yet simple. Her purpose within the giant of Penn State athletics is two fold; balance the books of a department still recovering from NCAA sanctions; and create an experience unlike any other for student athletes. 

In Barbour's eyes the student athlete experience is the primary focus, but a few things have to happen before she can focus on that.

"I don't like it at all, and I've probably been guilty of saying it, that my priority is the financials," Barbour said slowly turning her iced tea. "I don't like that because I think it does a disservice to the student athletes and our primary focus, our primary purpose. But I get it, because in order to create that experience we have to have resources and we have to create resources and then there is pressure there.

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"I think we've got a great opportunity to really look at a lot of things that we do and why we do them and what kind of resources we're putting into them and are we spending smart, are we creating smart, are paying enough attention to our fans and our community. Are we creating enough value for them? We don't get to decide if it's worth the price of a ticket for a fan, the fan decides that. So we've got to create value. Our number one priority is to create this world class student athlete experience but in order to do that we have to have resources and be able to create resources, so how do we do that?"

Right now the creation of resources takes up nearly all of Penn State's energy. Just a year removed from reporting a budget deficit of $6 million, Penn State reported a small positive of just a over $100,000 in its latest report.

The fluctuation will continue as Penn State already plans on reporting a deficit. The pending fiscal year includes the hiring of a new coaching staff and a trip to Ireland. There are one time payments that have already hit the books. In many ways Penn State athletics' fiscal reports state what has already happened in the past, and does not necessarily show where the athletic department stands at that moment in time.

Even so, Penn State athletics has long been accustomed to large reserves of money, massive net profits and the ability to invest that money back into the system. Barbour may feel that her primary function is to help the student athlete, but until there is financial stability that might be a tall order.

The good news for Penn State is that the stability may not be too far down the road. That would be a small but important step in the rebuilding and recovery of a limping athletic program.

"The plan is to return to a position where we're in the black annually, we have an opportunity to rebuild a reserve and we are able to invest annually into our infrastructure. That window is certainly foreseeable in the next five years." Barbour said.

That recovery will be aided by two incoming revenue streams; Penn State's reinstated share of Big Ten bowl revenu; and the renewal of the Big Ten Network TV contracts. Bowl revenues bring Penn State roughly $5 million, the TV deal could nearly double its current value to a figure upwards of $45 million a year per school.

As Barbour pointed out though, the Big Ten will likely set the bar for conference television rights as the first to renegotiate. But as other conferences negotiate their own deals, the market may not continue on its upward trajectory. By the time the Big Ten is set for a new deal after this upcoming one, it's difficult to know if that rise in the market value will have continued.

"I think the only thing that we really know is that it's going to be more," Barbour said of the soon-to-be-negotiated TV rights in 2016-17. "For now, that's how rights fees are going. In some ways we're fortunate. In some ways we're unfortunate that we're last in this cycle. It means we're probably going to have the biggest numbers, maybe. But it also means we're going to go last for the next bump."

"The way we have to look at this is that these resources are to fund these ever growing needs, and probably some wants of running whats. I think Penn State is a Top 5 collegiate athletics program in this country. We're additionally challenged because we have 31 programs. Ohio State, yes? Some of the privates. But Ohio State and Penn State are the two public schools over 30. So that's different than an Alabama at 17 or 18."

An additional challenge to the books is the new cost of attendance stipend. A recently approved NCAA ruling for Power Five conferences allows schools to provide student athletes with federally formulated funds to help improve their standard of living. For Penn State it will run the athletic department $1.75 million annually. It's a cost Barbour felt was needed to be competitive in college athletics. The basics of the plan are still to be determined, but it does mean prioritization will be crucial moving forward.

"The expense side of this is not tricky, cost of attendance, $1.75 million," Barbour said. "Our revenues are growing so we have the opportunity to do this. But as I talked to our coaches I said we're going to commit to doing this because I think it's important, I think it's one of the success factors. But that means $1.75 million we can't spend on something else. It will be bigger and it will be incremental, but I also have a very,very large list of capital projects that are almost exclusively legitimately needs. We have some facilities that are on the end of a really critical need."

The plan for getting that money out to each student athlete has yet to be determined according to Barbour, but it will likely mirror an already created model.

"I would say it's going to be one of two things. We're either going to take that figure and divide it by nine and give it to them monthly or do what the Pell Grant does, and give it to them by semester. So if it's $4,788 that's (what you work with.) Two things that are already established, Pell Grant which is per semester or room and board stipends which is monthly which makes sense because you're paying your rent. Those two things are already in place and already established so I would think that we would follow one of those."

Through all of the haze Penn State athletics does seem to be headed in the right direction financially. A lot of this is aided by the fact Penn State is dealing with one time payments rather than the mismanagement of funds. NCAA fines, temporary loss of revenue streams and postseason bans all hurt Penn State's ability to make choices.

But nearly all of those assets are coming back into the fold within the first few years of Barbour's tenure. So right now the key is to use the funds properly, and let time and an athletic department-sized savings account do the rest.

"We've got limited dollars. Now saying that, we've got more than a lot of people, but saying that it's not a limitless pot." Barbour noted, tapping on the table. "So how do we make sure that we're being really really smart and being good stewards for our resources? Whether they're created by ticket sales or created by TV dollars or philanthropy. We need to be great stewards to our resources."



Ben Jones covers Penn State football and basketball for StateCollege.com. He's on Twitter as @Ben_Jones88.
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