The need to fund athletic scholarships is the driving force behind a campus panel considering whether to put up permanent advertising signage in Kenan Stadium and the Smith Center.

Along with conventional agreements with advertisers, the Task Force on Signage in Athletic Facilities is looking at one option that would feature a more comprehensive relationship with a few companies and generate revenue for the academic side of campus as well as athletics.

Created late last year, the task force resulted when the University Board of Trustees asked the Athletic Department to evaluate all revenue streams that could boost its finances.

Athletic Signage Task Force Members Dick Baddour -- Athletic director, Athletic Department Martina Ballen -- Senior associate athletic director (business and finance), Athletic Department Scott Blackwood -- Staff member (Office of Sponsored Research) on Athletic Council Rusty Carter -- Board of Trustees member Frank Craighill -- Deputy chair of Octagon and Carolina alumnus Doug Dibbert -- President, General Alumni Association John Ellison -- Board of Trustees member John "Jack" Evans -- Faculty member (Kenan-Flagler Business School) and faculty athletics representative Kevin Gailey -- Graduate student (Exercise and Sport Science) Kathleen Harris -- Faculty member (Department of Sociology) and member of Faculty Committee on Athletics Carl Matheson -- General Alumni Association Board of Directors member Sherrell McMillan -- Undergraduate student and president of the Carolina Athletic Association James Murphy -- Dean, Summer School Dennis Press -- University controller, Controller's Office Don Stallings -- Board of Trustees member Norwood Teague -- Associate athletic director (promotions), Athletic Department Jack Vogt -- Faculty member (School of Government) Thomas Len White Jr. -- First vice chair, Educational Foundation

Trustees called for the move after hearing from Dick Baddour, athletic director, that this will mark the first year annual donations from Educational Foundation Inc., better known as the Rams Club, will not be enough to fund fully the scholarship program. That has forced the Athletic Department to dip into its operating funds to cover the shortfall.

The need for more scholarship funds stems from higher tuition costs, Baddour said. Just last month, the UNC Board of Governors endorsed proposals that would increase undergraduate tuition here next year by $250 for resident students and by $1,500 for non-residents. The proposals, which state legislators must approve, would put residents' cost at $3,205 and non-residents' at $16,303.

"Every time there's a tuition increase, there's an accompanying rise in the amount of money we need to offer scholarships, particularly for student-athletes coming here from outside the state," Baddour said. "Those additional tuition dollars are critical to the University's health, but they do have financial implications for us."

Baddour said the scholarship budget for Carolina's 28 varsity sports teams has jumped by at least $2.5 million over the last five years, and projections say another $500,000 will be needed to cover inflation in next year's budget.

"We're proud of the breadth of our program, and we don't want to weaken it by cutting back on scholarships," Baddour said. "We have a responsibility to consider all options."

Carolina's obligations to women's teams as the result of Title IX mandates further drives the need to raise scholarship funds, Baddour said.

The Athletic Department also needs revenue to raise Olympic-sport operating budgets, many of which now rank in the bottom third of the Atlantic Coast Conference. It, too, must maintain or renovate aging facilities such as Carmichael Auditorium, Boshamer Stadium, the Smith Center and Kenan Stadium, maintain new facilities such as Henry Stadium and Finley Golf Course, as well as finish projects that include the Softball Complex.

The Task Force on Signage in Athletic Facilities began meeting in January with these needs as a backdrop. Appointed by Chancellor James Moeser and Richard "Stick" Williams, chair of the Board of Trustees, the panel includes faculty, staff and student representatives, along with trustees, alumni and Educational Foundation members.

"It's a good group," Baddour said. "They represent a range of constituencies, but they all have Carolina's best interests at heart."

The tenor of the task force's discussions so far has reflected the sense that financial pressures will inevitably prompt Carolina to allow permanent advertising signage in the Smith Center and Kenan Stadium.

At the same time, task force members have said, the University must not go too far and spoil the culture of decorum that Carolina has built over the decades.

Moeser reinforced that notion at the task force's latest meeting in March, telling members that people expect Carolina to behave at a "higher level" than other public universities.

"We have something very precious in our hands," he said.

But, he added, while Carolina must preserve that heritage, it shouldn't be locked into the past. Moeser asked members to consider where Carolina should fit into the "national continuum" when it comes to signage in athletic facilities.

The University has permitted temporary signage in Smith Center and Kenan Stadium but has kept the two venues relatively "pure" compared to signage erected at other schools, Moeser said. He urged the task force to consider major contracts with a few advertisers as a way to avoid clutter.

That idea was expanded on by Frank Craighill, a Carolina alumnus and deputy chair of Octagon, a sports marketing firm with a U.S. office in New York City. He suggested that the University strike deals with two to three prestigious "corporate partners" that could bring in $3 million per year.

The agreements would probably extend beyond athletics. Possible arrangements might include the campus using the companies' services for business operations or giving them special access to employees and students in offering services. This feature could mean that academic programs would share in the revenue generated by the contracts.

"Budgets are getting tighter and tighter across campus, and we're all having to think more and more creatively about how we can bring in the resources necessary to remain competitive both on and off the field," Baddour said.

The task force has directed Craighill to come back to the panel with a more detailed proposal. Other options being considered are doing nothing or entering lesser-scale contracts with several advertisers for signage in the Smith Center and Kenan Stadium. With proceeds limited to athletics, these contracts would generate annual revenue of about $600,000 to $1 million, depending on the extent of the signage.

Current policy prohibits broadcast advertising by alcohol or tobacco products. The University has approval rights for all advertising.

The task force's next meeting has not been set, but Baddour said he hopes the panel can wrap up its work by mid-summer and then forward a recommendation to Moeser and the Board of Trustees.

Meantime, he said, members will gather feedback from the groups they represent so that their deliberations reflect the campus's input.

"This would be a departure for us," Baddour said. "We want everyone to be as comfortable with that as possible."