“Cal Baseball was betrayed on Friday…” – Gwyn Mohr

“Dear Friends,

Cal Baseball was betrayed on Friday.  We were betrayed by the University of California’s Leadership and we will demonstrate below why this betrayal must not stand.  Many of you have asked for the whole story.  Below are the facts (mixed with a little opinion) and these facts have been vetted with at least 15 people with first-hand knowledge of “The Rest of The Story.”

On September 28, 2010 the University cut 5 programs:  Men’s Rugby, Women’s LaCrosse, Women’s Gymnastics, Men’s Baseball, and Men’s Gymnastics.  The University said that the reason that the cuts were made was because the Athletic Department was in dire financial straights.  And certainly, this statement was (and continues to be) accurate.   But it is the story behind this story that is truly unbelievable and almost unfathomable.

In 2009, Sandy Barbour approached head baseball coach David Esquer and said “you don’t need to worry about fundraising, I’ll take care of that.  You worry about developing a winning program.”  Well, Coach Esquer has created a perennial winning program (2011 pre-season rank 17, nationally top 10 recruiting class) and has not focused at all on fundraising.  In 2010, Ms. Barbour hedged, and approached coach Esquer saying that he needed to cut some costs – he then let go of Coach Zuber and took additional minor cost-cutting measures netting about $100,000 per year).  This was the only warning shot issued to Cal Baseball or any person associated with the Cal Baseball family.  In fact, in an interesting tidbit, Jeff Kent (a Cal Baseball alum and 2000 MLB National League’s Most Valuable Player) accompanied Sandy Barbour on a fundraising trip to LA last year (ironically, a fundraising trip for all Cal sports) and she never mentioned that Cal Baseball or any other sport was in trouble, that there was any serious funding problems in the athletic department, or that there was even a threat that there could be cuts in the athletic programs.  So what changed?

In 2010, the Athletic Department commissioned a group – the Chancellor’s Advisory Committee – to provide recommendations to help deal with financial issues in the Athletic Department.  The primary finding of this group was that there was widespread financial mismanagement within the Athletic Department – so much so, that the Commission could not decipher what the costs and revenues were for each sport.  This finding was further supported in conversations with Chief Financial Officer Laura Hazlett (appointed in late 2010), others inside the Athletic Department, and long-term donors to Cal Athletics.  Specifically, Jeff Kent was hesitant to give money to the Save Cal Baseball reinstatement effort because the last time he donated to the University, the University lost a good portion of his donation!  In other words, they couldn’t account for nearly half of his donation to support women’s athletic programs at Cal.  Bob Milano, long-term coach of Cal Baseball, eventually tracked down the money for Mr. Kent inside the Athletic Department – a place where coaches rarely tread.

 

In addition to noting the lack of accountability, the University’s Committee strongly recommended that the financial resources available to the University – private donations as well as better business planning – was not adequately developed by the Athletic Department.  Specifically, the Commission noted that corporate sponsorships, private donations, and other sources of revenue (like sustainable business plans) were underdeveloped.  Further, the Commission noted that the expenditures at Cal were among the highest in the nation and that simple cost accounting and “belt tightening” could save significant money.  These findings directly implicated the University Leadership’s ability to manage the Athletic Department’s finances.

The Save Cal Sports group decided to quietly and independently investigate these issues.  (The Save Cal Baseball group changed its name at the behest of several major donors and with the consent of each of the 5 cut programs, including Men’s Rugby, in order to cooperatively raise funds to reinstate all 5 programs collectively).  Save Cal Sports took two approaches to investigating the finances.  First, we asked the newly employed CFO of the Athletic Department to help us investigate the financial issues.  She provided information that demonstrated that the financial accounting was in disarray.  Second, we asked independent accountants to analyze the financial information that we were able to obtain from other back channels in the Athletic Department.  They also concluded that the accounting was so bad that it was actually impossible to draw any reasonable conclusion about where and how money was raised and spent.  The only discernable item was that it appeared that the athletic programs were near the very top in spending compared to all the athletic departments in all of the United States (leave it to California!).  Save Cal Sports had corroborated the Advisory Committee’s findings.

Armed with all this information, the Save Cal Sports group – collectively pursuing a single goal to reinstate all 5 sports – had two conceptual paths to achieve that goal:  a cooperative approach or a confrontational approach.  We decided to work cooperatively. The premise of this approach was to raise enough money to get all 5 sports reinstated on a temporary basis and then focus on developing individual sport sustainable business plans and then help develop a real business plan (and better cost accounting) for the athletic department as a whole.  The long-term goal, besides full program reinstatement, was to help the Athletic Department overcome its accounting disaster within its own walls and to save other sports in the future from the 5 sports’ fate.

The starting point was to approach the athletic department and the University and ask them how much money we needed to raise in order to reinstate the programs.  The University Leadership refused (actually stubbornly refused) to give us an answer.  And there was meeting after meeting after meeting on this topic.  Getting nowhere and actually having a Cal Baseball parent file a public records act request to obtain decent information (which turned out to be worthless gibberish financial documents), we decided to set our own goals based upon our discussions about finances with the cut athletic programs – generally the best sources of financial information about their specific costs and revenues.  After this discussion, we actually set a two-phase approach – raise $10 Million by January 1, 2011 and raise an additional $5 Million over the course of the 2011 fiscal year to reinstate all 5 programs for a period of 4 years.  Not once did the University say that this number was too low, too high, just right – NOTHING.

 

After an incredible outpouring of financial contributions from Cal Alums all over the world (with over $10 Mil raised in 2 months), the University changed its tune.  In December of 2010, the University said that the collective group would need to raise $80 Million for reinstatement – clearly a target number that was beyond impossible to raise by these programs in the short-term.  My personal opinion is that the University Leadership did not want any chance for the athletic programs to be reinstated because it would demonstrate, unequivocally, that the University Leadership – specifically Sandy Barbour – was not doing her job (or at least doing a good job as related to her responsibilities of fundraising, financial accounting, and business planning).

Un-phased by this clear effort to break our resolve, Save Cal Sports then hit the road to raise even more money.  And by January 1, 2010 we hit $12 Million in pledges – $2 Million above our original goal.  By the end of January, Save Cal Sports had received $16 Million in pledged dollars with a confirmed $12+ Million in hard dollars.  The University was completely caught off guard by the ability of all members of the group to fundraise.  Please note, that the Athletic Director’s job is to fundraise for Cal Athletics and she provided absolutely no help whatsoever nor did anyone else in the Athletic Department.  The University Leadership provided no contacts, no assistance, no guidance, and offered no support for the fundraising efforts whatsoever.  And, in fact, the University Leadership attempted to stonewall the effort by not giving answers or even guidance about how much money needed to be raised, by when, and how we could actually resolve the financial problems within the cut programs.  Only in mid-January did the University Leadership say, “you’ve got our attention” so let’s talk.  Save Cal Sports met with Larry Baer (Giants CEO and Cal alum), Sandy Barbour and Frank Yeary (Vice Chancellor) to talk about how we had their attention.  Larry Baer strongly supported Save Cal Sports efforts and was quoted live on Comcast on decision-day that all 5 sports were going to be reinstated.

At about the same time (mid-January), it became apparent that the Athletic Department had never considered the implications of its decision to terminate programs to the other athletic programs at Cal related to Title IX and gender equity.  In other words, the University Leadership had no concept of how Title IX functioned or whether or not Cal was in compliance before or after the decision to cut the programs.  It was never logically considered in the decision-making.  Anyway, it became apparent when the New York Times Article broke that the decision to cut the programs would have actually required the University to cut 80 more men from Cal’s athletic programs! In other words, the decision to cut the programs now jeopardized other programs that had not been cut.  The Athletic Department has yet to acknowledge that they alone created this debacle for all of Cal athletics.  Negligence?  Gross Negligence?  Total Incompetence?

Shortly thereafter, the University Leadership declared that Save Cal Sports needs $25 Million to reinstate the 5 cut programs.  Again, we asked for some specific support for why they had come up with this number and our inquiries were dismissed.  As any financial person will tell you, part of a financial equation is cost cutting, not just revenue generation.  If there is something to cut (even scholarships) Save Cal Sports was open to the idea related to each program.  But the University would provide us with no support or information about why $25 Million was “the right number” – and we still do not have a logical answer.

Towards the end of January, the story takes on its political twists.  Looking back, the reason that the University Leadershiop decided to engage us at all after seriously stonewalling was because they completely blew the Title IX issue in terminating the programs and they needed to handle the problem.  So, not only did they see our efforts as giving them an avenue to get them out of the Title IX mess, but we had already raised the money to get the programs back.  Somewhere in here, the Rugby program was informed that it could control its reinstatement (and Jack Clark, the rugby coach, may have tipped off the Athletic Department to its big error as he had mentioned it in several Save Cal Sports conference calls in the past).

 

The Rugby program had raised a significant portion of the $12 Million in confirmed dollars (about $6 Million – enough to pay for Rugby, Women’s LaCrosse, and Women’s Gymnastics).  Initially, Cal Rugby wanted to raise money for a Women’s Rugby team but decided, after much discussion with the remaining Save Cal Sports teams, that the best approach was to get all 5 programs reinstated rather than “only” rugby.  In addition to Rugby’s fundraising, Cal Baseball “alone” raised at least $2 Million and Cal Baseball’s leadership in the Save Cal Sports effort raised an additional $4 Million (5 of the 6 Foundation members were related to Cal Baseball).  The Women’s sports and Men’s Gymnastics raised about $1.5 Million.  In addition, many major Cal Athletic donors threatened to extricate their donations from the Endowed Stadium Program (ESP) as well as eliminate all mention of Cal in their estate planning efforts if the 5 sports were not reinstated.  This major issue was raised by the Chancellor’s Advisory Committee in its report but the University Leadership ignored the warning.  And even with this knowledge in hand, the Sandy Barbour issued a letter to alumni stating that the ESP was still going well but that they needed more support than ever to keep it going “in these tough economic times.”

But the University liked the idea of partial reinstatement (and I’m speculating here) because it allowed them to (a) extricate the University from the Title IX debacle, (b) continue to keep in good graces with some major donors, and (c) continue the theme that we cannot afford to bring back the other sports (the original “reason” for terminating the sports).  In other words, the University Leadership was looking for a way to cover their mis-steps in some terrible decision-making in the past but still allow them to stick with their primary messaging about costs and cost cutting.  Even a teary-eyed “these are hard times” could easily be thrown into the press conferences.

The decision to move this forward was carefully orchestrated with a Public Relations Plan and blitz in order to control the messaging as it was put on the airwaves and in the newspapers on Friday, February 11th (the preferred “bad news” media day).  The story was released to the presses before the players and parents were told and before the programs that got thrown under the bus were told (even though the letter from Ms. Barbour to the players said “I wanted to tell you first” – of course, she was too afraid to do this in person).  Even better than that, the story was that “Cal Baseball didn’t hold up its end of the bargain” and that it, alone, needed $10 Million for temporary reinstatement. Interesting. That was the first time anyone in the Cal Baseball Family or involved with Save Cal Sports had heard that there was a bargain directed specifically at Cal Baseball! The press releases and interviews with Sandy Barbour and Frank Yeary stating that they had told Cal Baseball that they needed to raise these dollars specifically for its program in advance were simply lies and masked the long-term stonewalling efforts the University had placed in front of the reinstatement effort.

But the story pushed to the press has significant holes.  First and foremost, we have raised enough money to reinstate all 5 sports for a period of 4 years!  The confirmed dollars to date exceeds $12 Million and Rugby plus the other two sports have continually noted that they only need $6 Million (and maybe less). But the Athletic Department says those sports need $8 Million.  Why do the reinstated sports need $2 Million more than the coaches say they need (25 % more)?  And why won’t the Athletic Department allow anyone to review the analysis behind the genesis of these numbers?  Is cost-cutting in “hard economic times” somehow off limits?  Second, there is still $6 Million in confirmed dollars sitting on the table.  Six Million dollars is plenty of money for reinstatement for the two remaining teams.  The Cal Baseball program and the Men’s Gymnastics have said “we can live with $6 Million by itself” but we know we can raise another $4 Million (if that’s the new magic number) over the course of 4 years of having a program.  Is this going to be returned to the donors?  In addition, what about the $4 Million in unconfirmed pledges?  Can we make the effort to confirm those?  Why not? And, we haven’t even asked for future continuous donations through Save Cal Sports – only a one-time temporary reinstatement dollars to help us get off the ground!  The over 600 Save Cal Sports supporters have indicated a willingness to help with the next phase of our reinstatement plan. The real fundraising and sustainable business planning have yet to really start!

 

Cal Baseball’s commitment all along is to develop a sustainable business plan where we live and die by the money we generate and the money we spend.  We have repeatedly asked these specific questions and made these points but the University Leadership just says refuses to give any coherent answer.  It is as though they simply do not want reinstatement at all.  Why?

Importantly, many of the large-dollar donors whose money has been channeled to Rugby, LaCrosse and Women’s. Gymnastics, were told that their financial commitment was going to save all 5 sports.  And the broader fundraising effort was labeled Save Cal Sports as an all for one and one for all effort.  Exactly how this financial debacle will play out – likely in the courts – should be very interesting over the next few months.  But, again, clearly another debacle created by poor leadership at the University.

 

By reinstating some programs, but not all, the University Leadership has driven a wedge between athletic teams at the University and Cal Athletics donors who have kept the sports alive for many generations.  This decision will likely have long-term devastating implications for Cal Athletics and is further indication about the lack of vision from University Leadership – regardless of whether Cal Baseball and Men’s Gymnastics gain reinstatement.  Will donors pull supoort from the ESP program?  Will other Cal sports suffer the same fate as the 5 cut sports because the alumni are less inclined to donate?

The short summary of this entire fiasco is that the University Leadership lacked attention to financial detail, institutional knowledge, and foresight. The financial accounting is in disarray.  The Title IX compliance was never understood.  And the University Leadership has alienated 119 years of Cal Baseball alumni and their heirs and have driven a wedge into relationships within the Athletic Department and in the alumni community.  There are grand theories floating around that the University wants to take the Baseball Program’s prime real estate for other purposes, that the University Faculty is insisting on athletic program cuts (not just better athletic program financial accounting), and that the Athletic Department’s financial mismanagement is so egregious that the cuts are intended to divert attention from that big problem.  Whatever the underlying root of the series of poor decisions were, they were clearly not based in logic and reason.  The University Leadership has demonstrated its poor and narrow-viewed leadership through lack of:

 

  • warning to the cut programs,
  • cooperation in helping the programs meet their past financial needs and goals,
  • teamwork to help the cut programs raise money and gain reinstatement
  • openness as to why reinstatement is prohibited even when enough money is available, and
  • foresight in the “divide and conquer” strategy with partial reinstatement

 

Make no mistake, Save Cal Sports is not done and we will not quit.  The reinstatement game has simply become more interesting and the University Leadership has upped the ante.  This is where the great past and present Cal student-athletes thrive.  Stay tuned for more information this week about “what we are doing” and stay strong in your commitment to Save Cal Sports.  NEVER CORNER A BEAR!”

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