Beset by Financial Woes, U. of New Orleans Considers Leaving Division I

After several years of mounting deficits in its athletics department, the chancellor of the University of New Orleans announced today that the university was considering a move from the NCAA’s Division I to Division III.

“We had to reduce funding for athletics in the previous round of budget cuts, and since then the financial picture of the university and the athletics program has not improved,” the chancellor, Timothy P. Ryan, said in a written statement.

A move to Division III would allow the Privateers to run a more “cost-effective” program, Mr. Ryan said. But his decision marked a distinct shift from just a few months ago, when he said the university would remain in Division I and would not consider dropping down to Division II or III.

“We’re a public research university,” he told The Chronicle in July. “We didn’t feel that it would be appropriate for the University of New Orleans to be in one of those other divisions.”

The Privateers’ athletics program, with a deficit of at least $6-million, has been beset by challenges since Hurricane Katrina blew through the city four years ago. After the devastating storm, athletics officials cut several teams and struggled to rebuild severely damaged facilities. But as expenses rose, revenues dried up: The department receives most of its operating dollars from student fees, which dwindled as the university’s enrollment plummeted.

Last spring, statewide budget cuts prompted university officials to eliminate a nearly $1-million annual subsidy to athletics, which amounted to roughly one-fifth of the department’s $5-million operating budget. Not long after, students, in a campuswide referendum, rejected a proposal to increase student fees to cover the gap.

Athletics officials had obtained a waiver from the NCAA to remain in Division I for five years even as the university fielded far fewer than the required 14 teams. And the officials had hoped that efforts by prominent local businessmen to raise money in New Orleans, as well as a bequest from a wealthy former patron, would provide a financial boost.

But officials said on Wednesday that the fund raising “did not materialize” and the donation was “far less than anticipated,” leading them to reconsider the future of the university’s Division I status.