College sports’ bleak financial future in wake of coronavirus pandemic apparent in AD survey

The nation’s FBS athletic directors have painted a bleak financial picture of college sports going forward in what qualifies as the most extensive survey of the impact of the coronavirus on their profession.

Among the conclusions of Lead1 Association’s annual FBS AD survey is the potential for a financial tsunami hitting college sports.

An overwhelming 86 percent of ADs believe their universities will require their athletic departments to make “financial sacrifices” because of the crisis.

Over one-third of ADs forecast at least a 30 percent decrease in revenue for the upcoming 2020-21 academic year. That compares to only 8 percent in that category for the current fiscal year ending June 30.

All of it hints at a possible future that includes cutting sports, slashing salaries, laying off staff and weighing ability to fully funding existing sports if finances become too tight.

In fact, Iowa State announced Wednesday a one-year temporary (yet unspecified) reduction in salary to coaches and staff that would save $3 million. A one-year suspension of bonus money will save another $1 million. If not the first, Iowa State became one of the first athletic departments in the country to announce such cuts in the wake of the virus. AD Jamie Pollard said his department faced a $5 million shortfall alone from the cancellation of the Big 12 and NCAA Tournaments.

“It goes to the conflict of the mission of college sports which is to provide broad-based opportunities [versus] the cruel [profit-driven] economics,” said Tom McMillen, Lead1’s executive director. “The bottom line is going to have to be very important.”

Lead1 is the professional organization of the nation’s 130 FBS athletic directors. There were 110 respondents.

McMillen called what is ahead “a reckoning” for college sports.

About two-thirds of respondents said the most likely outcome of the crisis for their departments is a decrease in enrollment at their schools. Slightly more than half believe there will be decreased fan interest.

An overwhelming 90 percent of Power Five ADs are most concerned about ticket revenue reductions in 2020-21. The Group of Five (63 percent) is most concerned about NCAA revenue distribution.

Less than half of the Power Five athletic departments (41 percent) have sufficient financial reserves to ride out the crisis. Only 26 of Group of Five departments have enough reserves.

More than two-thirds of ADs (67 percent) agree or strongly agree they must find a way to limit coaches’ salaries. Forty percent at least approve of their “high earners” (primarily coaches) voluntarily cutting salary during the crisis.

 “If this starts to bleed into the fall and this starts to impact football, this is really going to be a transformative event for the industry as a whole,” said Zach Maurides, CEO of Teamworks, an organizational platform that helped conduct the survey.

More than half of the ADs (56 percent) say they agree a way must be found to limit buyouts.

Nebraska has spent more than any school in the country in the last 15 years in buyouts ($27 million), according to the Omaha World-Herald.  A proposed federal law would seek to limit coaches’ salaries.

“That shows you how hot button it is,” McMillen said.

Not surprisingly, starting the football season on time is seen as a panacea to the economic woes. ADs were quoted anonymously throughout the survey.

“Depends entirely on when we can get back up and running,” wrote one. “I think football has the opportunity to be a tremendous healer for our nation if we can get up and running by [the 2020 season].”

Over the next three months, 89 percent of ADs are most concerned about academic progress of their athletes, who are studying remotely with the shuttering of schools due to the virus.

“APR needs to be suspended for this semester,” one AD wrote.

Teams that don’t achieve an Academic Progress Rate score of 930 — equivalent to a 50 percent graduate rate — are subject to penalties, including postseason ineligibility.

After financial concerns, the greatest fear of ADs (39 percent) in six months is “morale and culture.”

Summing up the current climate, one AD wrote, “Due to the crisis and nature of what is going on nationally, I think that this is horrible time to be implementing name, image and likeness and one-time immediate transfers. The financial landscape is going to look so much different going forward.”

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