The University of Maryland athletics program recorded a budget shortfall in its last fiscal year after spending $5.7 million to buy out the contracts of former men’s basketball coach Mark Turgeon and two assistant football coaches.
It was the second consecutive year the Big Ten Conference program, which students help fund through a mandatory athletics fee, spent more than it received, according to financial records the school sent to the NCAA. The Baltimore Sun obtained the records using a Maryland Public Information Act request.
The previous year’s budget gap of $20.9 million resulted from games played without spectators, canceled games and other issues related to COVID-19.
Now, the university has reported the latest deficit — $6.8 million — for the fiscal year that ended June 30.
Since its revenue exceeded pre-pandemic levels, the school attributed this deficiency to buying out Turgeon’s contract and turnover costs related to hiring his replacement, Kevin Willard, in March 2022.
The athletics program must borrow from university reserves to plug such budget holes.
While annual shortfalls are rare — the department reported surpluses in the 2018, 2019 and 2020 fiscal years — Maryland is among a number of big-spending college athletic programs that have been willing in recent years to pay buyouts, popularly known as “dead money,” so they can unload coaches and hire fresh talent.
For instance, by the end of the 2019 fiscal year, Maryland had run up an $8.1 million buyout tab on nine former football head coaches and assistants, paying out most of the money that year and owing the rest. The biggest beneficiary, former head coach DJ Durkin, had signed a five-year, $12.5 million contract in 2015 that called for him to receive 65% of any remaining money if he was dismissed. Durkin was fired in 2018 after offensive lineman Jordan McNair suffered heatstroke and died.
Despite such buyouts, the department has in most years been able to avoid deficits with the help of its steadily increasing share of Big Ten revenues. The conference last year signed lucrative deals with Fox, CBS and NBC. Maryland’s conference share was $41.7 million in 2020, $33.7 million in 2021, and $48.8 million in 2022, according to its reports to the NCAA for those years. The $33.7 million was lower than the preceding year because ticket sales across the 14-school conference were ravaged that year by COVID-19 attendance restrictions.
After minimal spending on coaches’ severances in the two years following Durkin’s dismissal, Maryland athletics spent $5.7 million on buyouts in the 2022 fiscal year, according to the report it submitted Jan. 13 to the NCAA. About $5 million went to Turgeon, with much smaller amounts going to former top assistant football coaches Brian Stewart, who left after the 2021 season, and Scottie Montgomery, who left in early 2021, university officials told The Sun.
Turgeon’s unanticipated departure, which came eight months after signing a contract extension through the 2025-26 season, pushed the department into the red, according to the school. His exit was accompanied by related costs, such as “increased pay for other basketball staff members who were elevated into interim roles and expenses related to the search and hire of the new basketball staff,” athletics department spokesman Jason Yellin said.
The 2022 deficit “is solely due to the men’s basketball coaching transition that occurred during FY22,” Yellin said.
University of Maryland athletics finished the fiscal year that ended on June 30 with a $6.86 million budget shortfall, the second straight year the program spent more than it received. These were its four biggest sources of revenue and expenses.
Revenue: $107.5M
Expenses: $114.4M
Source: NCAA Membership Financial Reporting System
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Turgeon’s exit — less than a month into his 11th season with the Terps — was a mutual decision of the coach and the university, according to Yellin and a statement from Turgeon that the school released at the time.
The team, which was at No. 21 in The Associated Press preseason poll, was a disappointing 5-3 when he left and the once-popular coach was being booed by some Terps fans.
Turgeon could not be reached for comment.
Under Willard this season, the Terps are 20-10 overall and 11-8 in the Big Ten heading into Sunday’s final regular season game at Penn State.
Maryland included a clause in Turgeon’s May 2021 contract extension allowing it to end the deal “whenever the university determines that it is in its best interests.” In Turgeon’s case, that meant he was owed $5 million. The contract’s remaining years, through April 2026, were worth at least $14 million.
Such buyouts have become familiar in major college athletics — as if part of the cost of doing business — as universities jockey in an arms race for pricey coaching talent that wins games and makes a splash that attracts recruits, fans and donors.
As of Nov. 1, 14 football coaches in the so-called Power Five — the nation’s wealthiest conferences, including the Big Ten — had been dismissed in the previous season and a half, and their buyouts totaled more than $150 million, according to a report by the Knight Commission on Intercollegiate Athletics titled “Paying Football Coaches Not to Coach.”
At Maryland, most of the money to fund buyouts and other athletic department expenses comes from the department’s largest revenue sources, particularly its share of Big Ten Conference revenues.
Maryland joined the Big Ten in 2014 — two years after budget constraints forced it to eliminate seven sports teams — with the goal of stabilizing athletic department finances, elevating the football program and rejuvenating the fan base.
While the conference has flourished — it plans to add Western powerhouses UCLA and Southern California in 2024 — the Terps’ progress in the Big Ten’s most lucrative sport has been uneven. Maryland’s record in Big Ten Conference football games is 23-52 and its ticket sales revenue of about $6.6 million in the last fiscal year barely surpasses the $6.4 million the team recorded in its final season in the Atlantic Coast Conference.
The Maryland athletics program receives no state government subsidy. But students must contribute at Maryland and many other schools. Maryland undergraduates’ athletics fee is $399 a year.
“Student fees are subsidizing these budgets” at many universities’ athletics programs, said Karen Weaver, an adjunct assistant professor at the University of Pennsylvania’s Graduate School of Education and author of several books on financing college sports.
“College football and college basketball are fundamentally their own markets, which are set by whoever wants to be the highest bidder,” Weaver said. “There is no counterbalance, no, ‘Well, that $10 million salary is ridiculous.'”
In many years, the Terrapins men’s basketball or football head coach ranks as the state’s No. 1 highest-paid public employee. In calendar year 2022, football coach Michael Locksley held the top spot with a gross salary of $4.19 million, according to the most recent data available from the state comptroller’s office.
Maryland says the student fee helps support what Yellin called “one of the best athletic programs in the country.”
“Athletics elevates the university’s profile, adds to the value of degrees, provides engagement with our 388,000 alumni worldwide, and helps attract a quality, diverse pool of prospective students,” the university said in a written statement that appears in its undergraduate catalog.
There is no national standard for student athletic fees, with two of Maryland’s other large Division I schools, Towson University and the University of Maryland, Baltimore County, charging more than $1,000 a year, while other schools charge less than Maryland or nothing at all.
Maryland has more than 30,000 undergraduates and sponsors eight men’s and 12 women’s sports.
In the last fiscal year, the department collected $11.9 million in student fees — about the same as the previous year — its third-largest revenue source behind the $48.8 million from the conference and $12.7 million in overall ticket sales.
Its largest expenses included coaches’ salaries ($25 million, up from $20.9 million a year earlier), support staff and administrative costs ($18.7 million, up from $15.8 million), and scholarships ($17.9 million, up from $17.4 million).
In addition, $11.7 million in outstanding debt remained on the construction of Xfinity Center, where the men’s and women’s basketball teams play, and the renovation and expansion of Tyser Tower, which houses suites and other premium seating for football fans at SECU Stadium, according to the report.
Since the 2023 fiscal year began July 1, Yellin said athletics revenue is at or above targeted amounts. But he said travel expenses “have been severely impacted by our current national fiscal environment” and those increased costs and inflation generally “will continue to challenge us regarding our budget.”
