Athletics at USIU in Peril : Financial woes: Basketball coach says he hasn’t received a paycheck in two weeks.

The future of intercollegiate athletics at U.S. International University appears to be in jeopardy after the school filed for bankruptcy last week in a desperate move to save itself through economic reorganization.

USIU Athletic Director Al Palmiotto said Monday the fate of the school’s 12 Division I sports programs will be determined by the its board of trustees in a meeting Friday, and the outcome could range from minor adjustments to the total elimination of sports at USIU.

Palmiotto said he made “several proposals” on restructuring the athletic department to Kenneth McLennan, the university’s acting president, last week. But he declined to reveal the details of his proposals.

Palmiotto stressed his desire to preserve all of the Gulls’ sports programs while cutting costs in what he described as an already bare-bones athletic budget. He also expressed concern that the school might not maintain its NCAA Division I status and that abolition of sports would hurt its marketability with prospective students.

Any decision Friday by the trustees could affect the cornerstone of USIU athletics, its men’s basketball team, which faces the possibility of becoming extinct in midseason.

The Gulls are scheduled to play two home games at Golden Hall this week. Palmiotto said those games will be played. But by Jan. 3, the day Northwestern State is scheduled to play the Gulls here, USIU basketball could be a thing of the past.

“I have no idea what (McLennan) is going to do,” Palmiotto said. “(But) having no athletics at an undergraduate institution will definitely put a big, big problem on the board. Most undergraduates look for those intangibles that you can’t put your finger on. And one of them happens to be athletics.”

USIU filed for protection under Chapter 11 Thursday because Mission Federal Credit Union threatened foreclosure of a 70-acre portion of its 200-acre campus. The parcel, which would have been collateral on a $3.5-million loan, included athletic facilities. Now the university will work with a federal court to develop a plan for solving its long-running financial turmoil.

McLennan, who became the acting interim president in January, said he will review proposals from all administrators from each department on campus, but said USIU’s athletics and its highly regarded arts curricula would likely be the first to be cut.

Palmiotto suggested that his programs operate on such a strict budget already that the only thing left are the programs themselves.

“When you’re faced with something like this, you’ve just got to go straight for the hard line,” he said. “I think the hard line is going through a pared-down schedule and trying to cut in areas that won’t have an impact on the very essence of safety: food, lodging, things like that.

“My budget is very honest. It’s a very honest assessment of what it takes to run a Division I (program) without all the frills and all the hoopla. I don’t have a marching band. I don’t have football. I don’t have cheerleaders. We don’t have a gymnasium. Those are big cost items.

“Obviously, we have a little less in cash flow than we need. We have it in property, but not in cash flow.”

Gary Zarecky, the men’s basketball coach who has never had a winning season in five-plus years at USIU, hinted that minimal financial resources might be one reason.

“We have the smallest men’s basketball budget in the country,” he said. “And one of the most difficult things I’ve ever had to do with coaching is trying to deal with what’s been going on in our athletic department. I’ve been motivated for six years at USIU by all the negatives. Now I’ve been thrown a curve.”

Zarecky said he hasn’t received a paycheck in two months and that he never was paid for a previous three-month period of work. He said USIU’s move to bankruptcy became a headline story in Dayton, Ohio, where the Gulls were competing in the US Air Tournament Friday and Saturday, and that his players were “devastated” when he broke the news to them shortly before their opener against Murray State.

The Gulls (1-12) lost both games, by margins of 48 and 42 points.

“My players are not deserting me,” Zarecky said. “The team wants to overcome this. My heart and my feelings go out to my players right now.”

Palmiotto said Monday that he felt like he was sitting in a doctor’s office waiting to find out whether he had terminal cancer.

“We don’t know which way we’re going,” he said. “Is he going to come out of the room saying, ‘Bless you, child. You’ve got another 50 years’ or ‘I’m sorry to have to tell you . . .’ ”

Also at stake are the futures of the following USIU programs: baseball, softball, women’s volleyball, and men’s and women’s tennis, cross-country, soccer and golf. The Gulls have competed in Division I since the 1979-1980 school year, and for them to maintain that status on a probationary basis they must finish the year with eight sports in the program (four men’s and four women’s) with at least two competing during spring, fall and winter seasons.

Should the trustees cut any USIU sports, Palmiotto said athletes would retain their scholarships until the end of the season. He was not clear, however, about the eligibility status of USIU’s basketball players, who have played nearly half their season. The NCAA normally does not restore a year of eligibility to an athlete if he or she has played in more than 20% of the scheduled games.

Palmiotto is not only gravely concerned for the future of athletics at USIU, but is steadfast in his belief that eliminating them will only add to problems in the ensuing years.

“I think it’s very important to hold some kind of program together,” he said. “I don’t think they should just go through and cut just because they can save $50,000 $100,000, $200,000. I think they have to look at the whole domino effect. I think it’s essential to keep a core of everything they have that makes the university what it is.

“The only two things that are auxiliary at that university that are truly big league are the performing arts and athletics. I think if they drop them totally, it would be a hard hill to climb back up.”