No ‘silver bullet’: AD Jim Smith faces steep climb fixing Maryland finances

Q: What financial challenges is the University of Maryland athletics facing?

The University of Maryland athletics is facing significant financial challenges, ranking last in revenue and spending among Big Ten public schools for fiscal year 2025.

Q: Who is Jim Smith and what is his role at the University of Maryland?

Jim Smith is the first-year athletic director at the University of Maryland, responsible for addressing the financial issues within the athletics department.

Q: How have budget shortfalls affected Maryland athletics in recent years?

Maryland athletics has experienced budget shortfalls in each of the past two years, complicating the financial landscape for the program.

Q: Why does Jim Smith believe there is no 'silver bullet' for fixing Maryland's finances?

Jim Smith believes there is no 'silver bullet' solution due to the complex and ongoing financial challenges faced by the University of Maryland athletics.

(Nia Meyers/Baltimore Sun/TNS)

Jim Smith doesn’t see a “silver bullet” to fixing the University of Maryland athletics’ financial situation.

The first-year athletic director understands where the Terps stand. For fiscal year 2025, Maryland ranked last among the 16 Big Ten Conference public schools in both revenue and spending and has faced budget shortfalls in each of the past two years.

None of it came under Smith’s watch. But it’s the reality he inherited. One that has only grown more complicated as the college athletics landscape continues to shift.

“The good part is, we’re balancing revenue and expenses while being competitive,” Smith told The Baltimore Sun last week. “How do we grow? That takes some time.”

That growth won’t come easily.

Smith estimates Maryland sits roughly $50 million to $60 million behind the middle of the Big Ten — a gap that can’t be closed overnight. Eleven public conference schools reported more than $170 million in operating revenue last year (Southern California and Northwestern are private schools and don’t have to report revenue), with eight exceeding $180 million — the benchmarks Smith has placed with the $124 million in operating revenue last year.

The challenge isn’t just catching up. It’s doing so while the cost of competing continues to rise.

“It’s very dynamic,” Smith said. “[College athletics are] in a constant state of flux. … You just don’t know quite yet what the rules are going to be.”

That uncertainty defines the modern model.

Revenue sharing is already underway, with roughly $20.5 million per school flowing annually to athletes. Name, image and likeness money remains uneven. Transfer rules continue to shift through the courts. And on April 3, President Donald Trump signed an executive order proposing standardized transfer rules and a five-year eligibility cap.

The issue with the executive order is that it holds limited power as the NCAA is a private, voluntary nonprofit organization. Trump cannot directly force it to change its rules. Congressional, bipartisan approval is needed to grant the NCAA an antitrust exemption, legally override federal court rulings and establish a single, uniform national standard for athlete compensation and transfers.

Gaining congressional approval on a Trump-backed executive order is also a hurdle.

“I think at this point in time, we will take any set of rules that are consistent that we know we can plan accordingly for,” Smith said.

Without that framework, long-term planning becomes difficult.

“If you have a rule and you don’t like it, you go to court, and sometimes the rule doesn’t apply, and sometimes it does,” he said. “That’s the hard part of the job, just not knowing which rules apply and which ones don’t.”

One proposed solution is collective bargaining: A model that would treat athletes more like employees, with contracts, defined compensation and clearer rules across the sport.

Smith isn’t convinced it would solve everything.

“It’s an option. I don’t know that that’s the best option,” he said. “When you talk about college athletics, you’re not just talking about teams in the Big Ten. You’re talking about every level. A one-size-fits-all is really hard to get to.”

Even beyond the uncertainty, Maryland’s challenge is financial.

The Terps rely heavily on Big Ten distributions, bringing in roughly $59 million the past fiscal year — the largest share of their operating revenue at 48%. But they have not yet reached a full share. That is expected in 2027, with payouts upward of $70 million.

Even then, Smith said, rising expenses tied to revenue sharing will offset the increase.

“It’ll be net neutral,” he said. “We still have to go find new revenue streams.”

Conference money provides a foundation, but separation in the Big Ten comes from everything else — ticket sales, donors, sponsorships and premium experiences. For football, a main ticket revenue stream in the conference, the Terps ranked last in the 2024 season among public Big Ten universities with $5 million.

“That’s where the real competition is,” said Rick Burton, a sport management professor at Syracuse. “Those other revenue streams have to add up.”

Maryland has started searching for those answers.

At Xfinity Center, the athletic department introduced new luxury seating this past season. The press box was moved higher into the stands, while 200 padded, oversized seats were added behind the east basket near the home bench. The seats, listed at $5,495 annually, also came with access to the new Maryland Club.

The early returns weren’t what the school had hoped.

“If you went to a game, you saw a lot of empty seats,” Smith said. “We have to do better selling through those seats, and I think we will.”

The approach reflects a broader shift.

“Everything has to be premium now,” said Matt Winkler, a sports business professor at American University. “That’s just where you make the money.”

Across the country, programs are adding suites, sponsorship inventory and new revenue streams to keep pace with rising costs.

For Maryland, that push comes in a crowded market. Competing with pro teams and other colleges in the Washington-Baltimore region, attendance and donor engagement often hinge on success — particularly in football, which has gone 4-8 in back-to-back seasons under coach Michael Locksley.

“Let’s look at the market we’re in. The DMV really has the largest upper middle class per capita in the world,” Winkler said. “Now that doesn’t necessarily funnel to College Park, Maryland, which is an old town.”

Maryland’s top donors believe Smith is the right person to lead the effort.

Bob Baker, a longtime booster who, along with his wife, Carol, has committed $10 million to the university, said Smith has quickly built confidence.

“I think he’s done an excellent job,” Baker said. “He brings a new perspective … and he’s going out to raise money in ways that we haven’t explored before.”

Smith’s resume reflects that focus, with previous roles on the business side of sports, including positions with the Atlanta Braves, Atlanta Falcons and Atlanta United, along with leading the Ohio State Alumni Association.

For Baker, that background is enough. For now.

“He doesn’t have to prove anything to me,” Baker said. “His actions will speak for themselves.”

Those actions, Smith said, are centered on building relationships and generating revenue. His weeks are filled with meetings — dinners, lunches and calls with donors and supporters — while also balancing time with coaches to assess program needs.

“It’s busy,” Smith said. “It’s the balance of those two things that you spend the most time on. This is where college has gone with NIL and rev share.”

In a rapidly shifting landscape, Smith said that work is essential.

“You have to be bringing in new revenue streams in order to be able to compete at the highest level,” he said.

Maryland knows where it rests among its conference foes. Closing the gap is the hard part.

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