Some major-college athletics programs are beginning to prepare for the possibility of a delayed start to the football season because of the coronavirus crisis.
Three athletics directors say budget forecasts for the 2020-21 fiscal year are being adjusted to take into account the impact of the still-growing public-health emergency, including the possibility of reduced attendance at games.
Kansas AD Jeff Long said during a video conference with local reporters on Monday that his program is exploring “What would a 10%, what would a 20% cut in our operations look like?” — although he stressed that no decisions have been made.
Defending national champ LSU and other college football teams are worried their seasons might be delayed by the coronavirus. (Photo: Derick E. Hingle, USA TODAY Sport)
Football drives not only television contracts and ticket sales but also the value of schools’ local multi-media/marketing rights deals; shoe-and-apparel agreements and payments that some customers must pay for the right to lease suites or buy prime tickets. Guarantee-game payments, a feature of many early-season matchups, also could be impacted.
There are no indications at this time that the college football season will be disrupted, but athletics departments must plan for potential impact to their budgets.
While the first games are scheduled Aug. 29, most schools have budgets that work under a fiscal year that begins June 1 or July 1. So, as fiscal 2020 outcomes seem likely to be affected by the cancellations of the NCAA men’s basketball tournament and other events, the development of spending plans for fiscal 2021 are getting started now.
And administrators already are looking at the prospect of increased spending to accommodate spring-sports athletes whose seasons have been canceled. The NCAA Division I Council’s eight-member leadership group said March 13 that providing a replacement season of eligibility “is appropriate for all Division I student-athletes who participated in spring sports.”
“Our athletics department is one of the most fiscally efficient in the Power 5,” Washington State AD Pat Chun said in text message to USA TODAY, referencing a budget that perennially is among the smallest of those schools. “The exercise of reducing expenses for our department is complex but a mountain we are destined to climb.
“The economic forecast in the near term is daunting. The unknown variables at this time need to be defined and will be significant — the reduction in distribution from the NCAA and the impact of student-athletes with an additional year of eligibility. The scenario of the football season being impacted becomes more real by the day. The impact on our overall finances could be precarious. We are in the beginning phases of our 2020-21 budgeting process and will need to factor in a scenario that includes a negative impact on football revenues."
Long said Monday his program has extended all part-time and graduate employees and its event workers through the remainder of this academic year, guaranteeing those salaries.
Asked at what point he has to start worrying about losing September games and what contingency plans are in that scenario, he said: “We’re talking a lot about that, as you might expect. We’re somewhat waiting on more information, right? … We will have to look into the future, and we’re doing some exploratory cutting. What would a 10%, what would a 20% cut in our operations look like? We’ve just, again, started those as part of strategic planning for the future, haven’t made and decisions. And again, most of that is determined on how far and how long this crisis lasts.”
Conferences’ multi-sport television agreements and schools’ local media-and-marketing deals get as much as 85% of their value from football, according to AJ Maestas, the CEO of Navigate, a Chicago-based firm that specializes in college and professional sports rights valuations. Those deals, as well as shoe-and-apparel deals, often contemplate the prospect of payment-adjustment negotiations if games are not played for reasons beyond the school’s control.
“We are working on all sorts of contingency plans,” Temple AD Pat Kraft said via text message. “We are just starting to run numbers as to what the impact of a delayed football season would look like. The impact would be felt not just on ticket sales but things like merchandise sales, donations and the potential impact on sponsorship and media dollars. This is just the tip of the iceberg. I don’t know yet what the total impact on the department would be, but it would impact our revenue for sure.”
Steve Berkowitz writes for USA TODAY; Matt Galloway writes for The Topeka (Kansas) Capital-Journal.
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