Pandemic could spell financial trouble for college sports

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The coronavirus pandemic has affected nearly every aspect of American life financially. As of late May, more than 38 million Americans have filed for unemployment, and the U.S. economy fell into a recession in February. It’s hard to find an industry that hasn’t been affected by this crisis, and college sports are no exception.

On March 12, the NCAA canceled the rest of its tournaments, including the March Madness basketball tournament, its biggest moneymaker. Because of this loss, in June, the NCAA will distribute only $225 million of the $600 million it had budgeted to Division I schools. These numbers show a glimpse of what could be a grim economic climate for college sports for the remainder of and after the pandemic.

And that loss could just be the beginning. As the country begins to open up, some athletes are returning to campus for practices. Some schools have already started, and the Pac-12 will allow voluntary in-person practices starting July 15. However, the coronavirus has proven to be anything but predictable, and there is a growing list of schools with athletes who have tested positive since returning to campus. This is a reminder that even if college sports start on time, they can be shut down in an instant, which could have challenging financial consequences.

The college football season is scheduled to start in less than three months, but whether or not it will even happen remains uncertain. Canceling the football season would put a major financial burden on many Division I athletic departments because football revenue is often used to fund other sports. For most public Power Five schools, about 50% of the sports revenue comes from football. The estimated overall impact of not playing a football season would total $4 billion across colleges. At Cal specifically, about 41% of the revenue generated by sports last year came from football, and ticket sales made up almost 23% of the program’s revenue. Professional sports leagues have started to plan their returns to play without fans, and for college sports planning to do the same, this loss of ticket revenue could be an issue.

However, not every school’s funding structure looks the same. According to Stephanie Shrieve-Hawkins, director of athletics at San Francisco State University, her school, along with most other Division II schools, relies heavily on student fees to fund the athletic department. Decreased enrollment due to the pandemic, therefore, could cause a budget problem for many sports at SFSU.

“When you look at Cal, they are depending on some revenue to be generated,” Shrieve-Hawkins said. “(Our budget) is more from student fees, so when the enrollment is down, less people are paying that fee and our budget decreases.”

The issue of student fees is further complicated by the possibility of a remote fall semester, during which students may not be able to access some of the services their fees pay for.

“A lot of students feel like the fee structure should at least be reduced,” Shrieve-Hawkins said. “I think some families and students understand that paying some of the fees is helping to preserve programs for when they return.”

Conversely, schools that don’t rely on sports revenue actually have the potential to save money on travel costs and other expenses if the season is canceled, though overall cuts to their budgets are highly likely.

Regardless of financial structure, many schools are starting to think about how to deal with these financial impacts — there have been schedule changes, the cancellation of end-of-season tournaments and even programs cut in anticipation of what might happen in the fall. During the pandemic, nearly 100 college sports programs have been nixed in an attempt to save money, with 19 of them being Division I teams. Additionally, some athletic departments have instituted hiring freezes, furloughs and pay cuts for coaches and staff.

Within a pandemic, everything is uncertain. It’s impossible to know what the world will look like even a month from today, and colleges have a lot of decisions to make.

“Moving forward, it’s not going to be going back ‘normal’ right away,” Shrieve-Hawkins said. “There will be a hybrid schedule, and there will be modifications made to make sure that people are safe.”

Rachel Alper writes for Bear Bytes. Contact her at [email protected].