For months, officials throughout college athletics have expressed concern about the impact on its industry if the football season is wiped away by the coronavirus pandemic.
Most of the statements have been speculative, but an NJ Advance Media analysis of the financial budgets around the Big Ten shows schools in the nation’s most lucrative conference are facing potential eight- and nine-figure losses if the college football season is canceled.
Rutgers, which earns approximately $750,000 per home football game and relies on its annual Big Ten payment for nearly half of its operating budget, is facing a nearly $50 million loss in revenue if the 2020 college football season is canceled, the NJ Advance Media analysis reveals.
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For now, it’s a doomsday scenario that no high-ranking college official wants to discuss publicly.
But as COVID-19 cases in the U.S. surge in dozens of states in recent weeks, there is a growing sense that the college football season will be postponed to the spring or canceled completely due to the risk of infections to players, coaches, and personnel who make the game run.
“We may not have a college football season in the Big Ten,‘' Big Ten Commissioner Kevin Warren told the BTN last week after the conference eliminated non-league competition for all fall sports — a move that was followed by the Pac-12 the following day.
Officials from the three other leagues that make up the Power 5 Conferences have said they’ll wait until the end of the month to decide on whether they’ll proceed with a normal fall college football season.
But on Thursday the NCAA issued new guidelines for bringing back college sports this fall. The report called for daily self-health checks, the use of face coverings during training, competition and off the field and testing strategies that include results within 72 hours of competition in high-contact sports such as football.
“The rate of spread of COVID-19 has been increasing in many regions of the country,‘' the report stated. “Because of this increase, it is possible that sports, especially high contact risk sports, may not be practiced safely in some areas. In conjunction with public health officials, schools should consider pausing or discontinuing athletics activities when local circumstances warrant such consideration.‘'
NCAA president Mark Emmert said the guidelines were intended to offer schools “the advice of health care professionals as to how to resume college sports if we can achieve an environment where COVID-19 rates are manageable.‘‘
But he conceded the recent surge of cases in football-crazed states such as Florida, Texas, California and Arizona could result in the NCAA canceling the fall season — just like it did in March when it wiped out the the NCAA basketball tournaments and the entire spring sports championship season.
“When we made the extremely difficult decision to cancel last spring’s championships it was because there was simply no way to conduct them safely,” Emmert said in a statement. “Today, sadly, the data point in the wrong direction. If there is to be college sports in the fall, we need to get a much better handle on the pandemic.”
Multiple industry insiders told NJ Advance Media this week college officials are debating several options, including conference-only schedules across each Football Bowl Subdivision league. In this scenario, the typical 12-game regular season would likely be condensed to no more than 10 games.
Another scenario is college officials opt to push back the fall schedule by a few weeks in order to see how the NBA and MLB do with their startups. Both leagues begin play later this month, and professional teams having a low number of positive cases could give college athletics officials the confidence to forge ahead with a truncated football season.
A third option is the college football season is moved to the spring. While this would keep alive the hope for a season, there is also widespread skepticism of a spring format because no one knows whether there will be a vaccine or improved medical care for those infected by the virus by early 2021.
“We’d basically be kicking the can down the road by moving the season to the spring,‘' an athletics director from a Power-5 Conference school told NJ Advance Media.
Still, the AD — speaking on the condition of anonymity because he was not authorized to speak publicly on the league’s plans — said the spring scenario keeps alive the goal of recouping the millions of dollars that would be lost without a college football season.
The NJ Advance Media analysis shows the deficit schools inside the Big Ten would be facing if a college football season is postponed completely.
Combined, the 14 schools in the Big Ten could face a potential loss of more than $950 million, an analysis of the NCAA 2019 fiscal year reports of the league schools shows.
The calculus for determining the potential losses is simple: add the projected Big Ten distribution with the profit each school earns from playing a full season (ticket sales plus parking/concessions minus travel costs and game expenses) and you get a number that ranges from roughly $49 million (Rutgers) and $104 million (Ohio State).
If a college sports season were to proceed as normal, 12 of the 14 Big Ten schools at the conclusion of the 2020-21 academic year would receive a check for $54.6 million. That’s the projected full-share distribution the Big Ten provides its member schools, according to a report furnished by College Sports Solutions and published by Rutgers University in 2018.
If the college football season is canceled, that distribution would be reduced — or eliminated completely — since the money comes as a result of media-rights agreements that could be voided by the league’s TV partners. Already, Big Ten schools saw their conference-distribution reduced in fiscal year 2020 after the NCAA canceled its basketball tournament during the early stage of the pandemic in March.
In addition to the potential reduction or the elimination of the $54.6 million distribution, college football programs are facing another massive hit to a high-value number in its annual budget: ticket sales.
College football programs will certainly see decreased attendance totals at games this season. That much is clear. But while some schools are holding out hope to go with a 25% seating capacity, a more likely scenario is the majority of teams will play in empty stadiums this fall.
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At Ohio State, an empty stadium would result in a potential $50 million loss. That’s how much the school received in football ticket revenue during the 2018 season, according to its most recent publicly available financial report.
Combined, 13 of the 14 Big Ten schools with publicly available documents — Northwestern, as a private school, does not disclose its annual athletics budget — face potential losses totaling $952.55 million.
The potential losses don’t factor in the amount Big Ten schools would save from having a fall without the non-revenue sports being played.
But the savings, documents show, add up to a small fraction of the potential losses from not having a football season and there are millions of dollars in coaching salaries, recruiting costs and equipment needs that are guaranteed to be on the football ledger with or without a season.
The fall Olympic sports such as men’s and women’s soccer, field hockey and volleyball result in a red number on the financial ledgers at most colleges across the country.
At Rutgers, the men’s soccer ($188,923), women’s soccer ($355,093), field hockey ($188,407) and the volleyball ($358,558) programs combined to cost $1.1 million in game expenses and travel expenditures, according to the university’s most recent athletics fiscal report. Rutgers is still paying the bills tied to coaching salaries, scholarships, equipment and recruiting that add up to $5.1 million for the four sports teams.
“There’s uncertainty in athletics (and) there’s uncertainty across the university,‘' Rutgers athletics director Pat Hobbs said in an interview with The Associated Press in June. “Once you have (a plan), you’re going to have to make financial adjustments.”
In April, the university announced that Hobbs and Rutgers’ three highest-paid coaches — football coach Greg Schiano, men’s basketball coach Steve Pikiell and women’s basketball coach C. Vivian Stringer — would take 10% pay reductions through August.
“There will be less revenue from some of the usual sources, but there are also significant cost savings through the spring months,‘' Hobbs told NJ Advance Media in April. “Travel costs, recruiting budgets, food — all of those types of things (result in) significant savings. Through the remainder of the year, on a net basis, we look to be fine. The concern is should we go deep into the new academic year, how do you handle those financial concerns?”
A lost college football season would likely result in a multi-billion dollar loss in the industry overall when one combines the money raked in from media-rights contracts and football-game profits nationally.
And it’s why one leading advocate for student-athletes rights questioned whether conference commissioners, college ADs and university presidents should be making the decisions on whether to play the college football season this fall.
“Believe me, they’re already making these decisions based off of finances,‘' Ramogi Huma, executive director for the National College Players Association, an advocacy group for student-athlete rights, told NJ Advance Media. “A big reason why the Ivy League pulled the plug (on a fall college football season) is because they don’t stand to lose the same amounts of money as the Power 5 Conferences. Why are we even talking about still playing? Because football brings in virtually all of the money for these athletics departments. That’s why.‘‘
Huma said the coronavirus pandemic is “laying bare the truth about college sports.‘'
“A player’s health and safety has never been a priority,‘' he said. “They’re unpaid, without any representation, and they’re used and abused to make coaches and conference commissioners rich and to give colleges a lot of branding and advertising. That’s pretty much the function. Those that benefit are the coaches, the ADs and the conference commissioners, who are the ones driving going forward with a season.‘'
“Who has a conflict of interest in terms of (deciding) it’s safe or unsafe to play but there’s money to be gained or lost? It’s the ADs and the commissioners who stand personally to potentially lose a lot of money if those presidents say, ‘You know what, the season got canceled (so) we’re gonna have to rework or suspend your salary.’ That’s why many of them are so adamant. They can talk about other things but that’s why.‘‘
What Huma doesn’t want to see happen is college ADs decide to minimize a fraction of their athletics’ spending budget by cutting non-revenue sports. It’s already happened at 19 Division I schools, according to an Insider.com report, and resulted in the loss of 57 teams combined.
“We’re advocating heavily for preserving non-revenue sports,‘' Huma said. “What people don’t realize is those non-revenue sports are actually revenue generators for the schools. Because, in most of those sports, their players are not on full scholarships, and that means they’re paying 40 to 60 percent of their tuition, their room and board and other bills that are revenue generators for the university. Some ADs are using this as an excuse to remove their Olympic sports, but those are actually revenue generators at most institutions.‘'
If there's a football season in 2020, Rutgers will look to improve on its 2-10 record from 2019. Andrew Mills | NJ Advance Media for NJ.com
It’s no secret that Rutgers’ annual athletics budget is heavily subsidized by a combination of the university’s general fund, student fees and loans from the university and the Big Ten. The school’s athletics fiscal report from the 2018-19 season shows a $45.2 million shortfall in a $103.2 million budget that was made up by $14.5 million in support from the university’s operating fund, $12.1 million in student fees, $15.4 million from an internal loan and $3.2 million in direct state or government support.
But Rutgers is the exception when it comes to schools in the Big Ten that lose money, financial documents around the league show.
No Big Ten school rakes in more money than Ohio State, which reported $210.5 million in revenue on its 2019 fiscal year report.
But since 28.4 percent of that total is made up from $59.8 million in overall ticket sales — and because fans might be prohibited from attending football and basketball games in the 2020-21 season — Buckeyes athletics director Gene Smith said the fiscal fallout could prove more impactful than the recession that hit the nation about a decade ago.
“This one is a lot more devastating,” Smith said, via the Columbus Dispatch in April.
Michigan produced $197.8 million in athletics revenue in 2018-19 thanks to a football program that tallied $122.2 million in operating revenues, the university’s fiscal report shows.
But late last month Michigan athletics director Warde Manuel presented a budget to the university’s governing board that showed a 31.4 percent decrease in revenue for the 2020-21 year. The department, Manuel said, projects a deficit based on operating revenues of $135.8 million and projected expenses of $161.9 million.
Manuel said the deficits were based on the notion that revenues from ticket sales will likely decrease 50 percent between fiscal-year 2020 and fiscal-year 2021.
“There is still a lot of turbulence about what’s going to happen,” Manuel told the board, according to the Detroit News.
One solution to what Michigan officials expect to be a $65 million revenue loss from last year is to work with the university on a debt-service plan to cover its deficit. It’s a measure that some of the top-revenue producing Big Ten schools could likely take, but one that might not fly at Rutgers, which has no shortage of critics who bemoan the annual subsidies given to the athletics department.
Rutgers’ annual fiscal-year documents show the athletics department’s deficit to be $444.5 million since 2003-04.
The question of how a financially strapped Rutgers program would pay its bills without making drastic decision such as cutting sports or massive layoffs to administrative and support staff is unknown.
But one Power 5 Conference school official told NJ Advance Media this week some college officials have suggested the Big Ten takes out a bank-funded bridge loan and uses it as the distribution in the upcoming fiscal year. If the media-rights agreements are altered or voided altogether, the conference bailout might be the cash-flow solution, the school official said.
“Obviously there’s a lot of loss revenue and this is just a reckoning of the absorbent expenditures in college sports,‘' Huma said. “As they look to mitigate this, there needs to be a reset. Are these schools going to incur losses or are they going to change the salary structure in the meantime? It’s not an automatic that they have to lose as much as they’re going to lose.‘‘
Here’s how each Big Ten school would be impacted financially, according to the NJ Advance Media analysis:
- Ohio State
Total revenue: $210.55 million. Total revenue from football ticket sales: 24 %. Football-game profit: $49.63 million. Potential loss: $104.27 million.
Total revenue: $197.82 million. Total revenue from football ticket sales: 23.4 %. Football-game profit: $43.53 million. Potential loss: $98.17 million.
- Penn State
Total revenue: $164.53 million. Total revenue from football ticket sales: 22.4 %. Football-game profit: $36.66 million. Potential loss: $91.29 million.
Total revenue: $136.23 million. Total revenue from football ticket sales: 22.1 %. Football-game profit: $30.66 million. Potential loss: $85.3 million.
Total revenue: $157.66 million. Total revenue from football ticket sales: 15.2 %. Football-game profit: $26.97 million. Potential loss: $81.6 million.
Total revenues: $151.97 million. Total revenue from football ticket sales: 14.6 %. Football-game profit: $19.46 million. Potential loss: $74.09 million.
- Michigan State
Total revenue: $140 million. Total revenue from football ticket sales: 14.1 %. Football-game profit: $16.37 million. Potential loss: $71 million.
Total revenue: $130.46 million. Total revenue from football ticket sales: 7.2 %. Football-game profit: $6.28 million. Potential loss: $60.91 million.
Total revenue: $110.84 million. Total revenue from football ticket sales: 7.2 %. Football-game profit: $5.47 million. Potential loss: $60.11 million.
Total revenue: $127.83 million. Total revenue from football ticket sales: 5.3 %. Football-game profit: $4.85 million. Potential loss: $59.48 million.
Total revenue: $108.8 million. Total revenue from football ticket sales: 5.5 %. Football-game profit: $4.25 million. Potential loss: $58.89 million *
* Maryland received an advance on its future Big Ten distributions and reportedly has a payback on a $66 million loan. The USA TODAY reported Maryland’s future Big Ten revenue shares will be adjusted accordingly.
Total revenue: $118.57 million. Total revenue from football ticket sales: 5.2 %. Football-game profit: $4.01 million. Potential loss: $58.64 million.
Total revenue: $103.25 million. Total revenue from football ticket sales: 7.8 %. Football-game profit: $4.45 million. Potential loss: $48.76 million *
* As a result of two loans from the Big Ten totaling $48 million, Rutgers is scheduled to see a decrease in its full-share distribution in the 2021 through the 2026 fiscal years. Rutgers’ 2021 Big Ten distribution will be $43.7 million, according to the CSS report released by the university in 2018.
Here’s a look at Rutgers’ football revenues/earnings figures since 2007:
- FY2007: $15.7M revenue; $15.7M expenses (Subsidized $3.7M in university support/student fees)
- FY2008: $18.8M revenue; $18.8M expenses (Subsidized $2.5M in university support/student fees)
- FY2009: $22.4M revenue; $22.4M expenses (Subsidized $3.3M in university support/student fees)
- FY2010: $26.8M revenue; $26.8M expenses (Subsidized $2.8M in university support/student fees)
- FY2011: $19.5M revenue; $19.5M expenses (Subsidized $1.3M in university support)
- FY2012: $21.4M revenue; $21.3M expenses (No subsidy; $61,161 surplus)
- FY2013: $19.7M revenue; $19.7M expenses (Subsidized $419,918 in university support)
- FY2014: $21.7M revenue; $19.7M expenses (No subsidy; $2M surplus)
- FY2015: $26.7M revenue; $18.6M expenses (No subsidy; $8.1M surplus)
- FY2016: $28.7M revenue; $25.2M expenses (No subsidy; $3.5M surplus)
- FY2017: $19.5M revenue; $27.7M expenses (No subsidy; $8.2M deficit)
- FY2018: $11.77M revenue; $26.87M (No subsidy; $15.1M deficit)
- FY2019: $14.76M revenue; $27.08M expenses (No subsidy; $12.3M deficit)
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Keith Sargeant may be reached at ksargeant@njadvancemedia.com.
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