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College Athletic Departments Face Prospect of 'Ice Age' if Football Season is Severely Impacted by Pandemic

Published by
DyeStat.com   Apr 2nd 2020, 9:54pm
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Alteration, Reduction To Fall Football Schedule Due To Coronavirus Pandemic Would Have Major Financial Repercussions For NCAA Division 1 Athletic Budgets

By Erik Boal, DyeStat Editor

During the past decade, the introduction of the College Football Playoff and increased television revenue gained from the growth of conference networks and the addition of several bowl games created a significant boost in the athletic budgets for all NCAA Division 1 member schools.

The financial reach of college football sparked impressive growth for entire athletic departments – including cross country and track and field – when it came to coaching salaries and additional staff positions, as well as project initiatives to build exceptional new facilities and renovate existing ones.

But even with the decision Monday of the NCAA Division 1 Council to extend eligibility and provide scholarship relief for spring sport student-athletes who had their seasons canceled March 12 as a result of the ongoing Coronavirus (COVID-19) global pandemic, the biggest challenge facing coaches and athletic directors going forward has more to do with the future of college football than addressing the challenges that await spring sports, including outdoor track and field.

bowls“Almost all of our programs are managing a zero bottom line. Some of them have reserves, but generally speaking, we’re run like the non-profits that we are,” Big 12 Commissioner Bob Bowlsby said during a March 26 conference call.

“(Football) is a driver from a popularity standpoint. It’s a driver for schools from a fundraising standpoint. It’s a big driver from a TV standpoint, and it’s a big driver from a ticket sales and revenue standpoint.

“It’s a whole new ballgame. It affects everything we do. It affects the largest portion of our TV contract. If that doesn’t happen, the underpinning of what we know as normal goes away, and we’ll have some major changes to make.”

Even more weight is being applied to this upcoming college football season than in past years, a byproduct of the NCAA distributing only $225 million in June to Division 1 member schools, a shortfall of 63.5 percent of the anticipated $600 million as a result of the cancellation of the men’s basketball tournament that generates the majority of the association’s annual $1.1 billion in revenue.

The results from a pair of surveys of the 130 athletic directors in the Football Bowl Subdivision were released in the past week, one by Brett McMurphy, college football insider for Stadium Network. The other was conducted by LEAD1 – an association of those 130 athletic directors – and Teamworks, a company that designed an app with the goal of keeping athletic programs and departments connected.

According to the survey completed by LEAD1 and Teamworks, 63 percent of the athletic directors predicted a decrease in revenue to their budgets by at least 20 percent during the 2020-21 school year. When asked about the 2019-20 fiscal year, 65 percent of the athletic directors surveyed expected a decline in revenue of as much as 20 percent, with the remaining 35 percent planning for a decrease that could reach 10 percent.

According to Navigate Research, a Chicago-based advisory group that specializes in sports and entertainment marketing, 85 percent of the annual revenue of an athletic department of a Football Bowl Subdivision school is generated from football.

The average Power Five school – a group that encompasses Notre Dame, along with programs in the Atlantic Coast, Big Ten, Big 12, Pac-12 and Southeastern conferences – makes approximately $120 million each year, which equates to more than $100 million in revenue from football alone.

Navigate Research estimated each home football game for a Power Five program is worth approximately $14 million, which includes television contracts, or more than 11 percent of an athletic department’s overall revenue.

If the college football schedule starts on time Aug. 29 as originally planned, but fans aren’t allowed to attend in an effort to continue the promotion of social distancing during the Coronavirus pandemic, it would amount to a huge loss. Navigate Research estimates the average Power Five school generates approximately $25 million in ticket sales for football alone.

In addition, the advisory group noted the average Power Five school could receive anywhere from $20 to $30 million annually in donations, another revenue source that would be impacted without the presence of a complete college football schedule, or the existence of a season at all. A stifled economy and high unemployment could exacerbate that problem as well. 

The presence of television revenue also plays a vital role, most notably for Power Five conferences. Providing a full 12-game regular-season schedule is played, Power Five conferences will distribute to their member schools revenue ranging anywhere from $33 million for the Pac-12 to $54 million for the Big Ten.

coyle“I heard this a long time ago that money isn’t the most important thing in college athletics, but it’s right up there with oxygen. We all need resources to do what we do every day,” Minnesota athletic director Mark Coyle said on Tuesday’s edition of the Golden Gopher Podcast.

“We all have big hearts, but it’s on us to be creative and to be innovative in how we can generate new revenue and how we can be more strategic in how we spend our dollars going forward.”

According to the survey conducted by McMurphy, with 112 of the 130 athletic directors in the Football Bowl Subdivision responding and almost all of them speaking on the condition of anonymity, they explored multiple options when it came to the challenge of salvaging both regular-season and postseason bowl and playoff competition.

“There better be (a season), or many programs will be out of business,” one athletic director told McMurphy.

One solution suggested was a 12-game regular season played during both the fall and spring semesters, with the College Football Playoff semifinals being held in May or even June.

“I think being open to a non-traditional season is a must for (athletic) departments to survive,” one Power Five athletic director expressed to McMurphy.

Another scenario offered a schedule that consisted of only nine regular-season games. There has also been discussion of only playing conference games, thus eliminating the September schedule consisting mostly of non-conference contests, but still allowing for bowl games and the College Football Playoff to remain as scheduled.

But without the presence of non-conference games, Group of Five schools and a lot of Football Championship Subdivision programs would not receive their annual anticipated million-dollar revenue streams for competing against Power Five opponents.

“It would be crippling to the Group of Five programs and would destroy the FCS ranks as well,” one Power Five athletic director summarized to McMurphy.

Several athletic directors shared in the survey conducted by McMurphy that if the Coronavirus pandemic doesn’t allow for college football to be played in the fall, the last resort would be a spring schedule beginning in January and culminating around Memorial Day weekend next year.

“Would that be the preferred situation? Absolutely not. But the lights have to be kept on somehow,” another athletic director explained to McMurphy.

Depending on the scope of the Coronavirus pandemic and the potential for a more relaxed approach when it comes to social distancing, the possibility exists that fans would be able to attend games during a spring season, thus allowing athletic departments to still benefit from the revenue generated by the football programs.

“If it’s our only option, we absolutely would have to do it in the spring,” one Group of Five athletic director discussed with McMurphy.

“It would be incredibly difficult for us to survive financially without football revenue. That’s how critical it is to each university. We have to be creative in our thinking on this.”

Pac-12 Commissioner Larry Scott said in an interview Tuesday with the San Jose Mercury News that a decision regarding the future of the existing college football schedule would need to be made by the end of May in order for school presidents, athletic directors and conference commissioners to proceed accordingly.

“The optimistic model has an elongated training camp and an on-site start,” Scott said. “The most pessimistic has no season at all.”

According to the figures generated by Navigate Research, anything less than a normal 12-game regular season would have a profound impact on an athletic department’s overall budget.

“I think football has the opportunity to be a tremendous healer for our nation if we can get up and running by then,” another athletic director communicated to McMurphy.

Without the significant revenue gained from TV contracts, local and regional sponsors, alumni donations and ticket sales, several athletic directors told McMurphy that the consequences resulting from the potential absence of millions of dollars usually accounted for in a department’s budget could include reducing the programs or eliminating Olympic and non-revenue sports, such as cross country and track and field.

Old Dominion was the first Division 1 school to eliminate a sport as a result of increased financial challenges due to the Coronavirus pandemic, deciding Thursday to discontinue its wrestling program that had existed for 63 years.  

“If we aren’t back (playing) by the fall, it will look like the Great Depression, and we will be in soup lines,” a Group of Five athletic director predicted to McMurphy.

In the meantime, not only the NCAA, but its member schools, have already begun to implement financial restrictions and cost-cutting measures on their own in an effort to prepare for a worst-case scenario during the 2020-21 school year.

According to a report obtained Tuesday by USA Today, NCAA President Mark Emmert decided to reduce his salary along with the association’s nine other highest-paid leaders each by 20 percent, with all of the vice presidents in his cabinet each enduring a reduction of 10 percent.

Based on the NCAA’s federal tax records from 2017, Emmert’s base salary exceeded $2.1 million. The next-highest salary for any officer was slightly less than $1.1 million.

Oregon president Michael Schill announced during a virtual town hall meeting Thursday that he would take a 12 percent pay reduction for the next six months and possibly for the entire 2020-21 school year. Schill also said that Oregon athletic director Rob Mullens along with the school’s 10 vice presidents would reduce their respective salaries by 10 percent during the same period. 

Wyoming athletic director Tom Burman announced Tuesday he would reduce his salary by 10 percent through the end of the calendar year in an effort to limit the impact on all students affected by the Coronavirus pandemic.

Burman also said there are plans to increase donations to the Cowboy Joe Club, which helps provide funding for scholarships for Wyoming student-athletes. Craig Bohl, Wyoming head football coach, and his wife Leia Bohl made a $100,000 donation to the Cowboys’ athletic department, of which $70,000 will be devoted to covering the cost of scholarships for senior spring sport student-athletes who decide to return in 2020-21.  

pollardIowa State athletic director Jamie Pollard announced Wednesday a pair of significant reductions to the school’s athletic budget.

Pollard decided on a one-year reduction for the salaries of coaches and specific staff members, a strategy that would help decrease total payroll by more than $3 million. Like Burman and Mullens, Pollard is also reducing his own salary by 10 percent.

In addition, Pollard has suspended for the next year all coaching bonuses and incentives, saving the athletic department an additional $1 million.

During a media conference call Thursday, Pollard shared a recent conversation he had with Iowa State faculty athletics representative Tim Day.

“He said what we’re facing right now is one of three things,” Pollard said. “It’s either a winter blizzard that we hunker down for the weekend. It’s the Farmer’s Almanac predicting that we’re going to have a really hard winter, or we’re facing the Ice Age.

“I think we’ve all figured out that this is bigger than a blizzard (where) we’re shut down for the weekend. We’re probably in a phase right now that we’re in a long, hard winter. But if we can’t play football this fall, I mean it’s Ice Age time. There is nobody in our industry right now that could reasonably forecast a contingency plan for how they would get through not playing any football games.”

Although the NCAA Division 1 Council made an appropriate decision Monday when it came to extending the eligibility clock for spring sport student-athletes and offering scholarship relief for seniors who decide to return to compete for another season, that plan can’t be executed effectively without the presence of football at some point during the 2020-21 school year.

“There was an acknowledgment that we don’t know the future,” Division 1 Council chair M. Grace Calhoun, the director of athletics and recreation at University of Pennsylvania, told the Associated Press.

“If other seasons are canceled and other things happen in the future, we’ll have to take that up with the individual merits of the case at time.”



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