Big Ten Football Loss Could Cost Schools $100 Million Each

(Bloomberg) -- Big Ten football fans face months of empty Saturdays this fall. But for at least one conference member, the lost revenue means the permanent elimination of four other sports that rely on football for survival.

The University of Iowa said last week it will discontinue men’s gymnastics, men’s and women’s swimming and diving, and men’s tennis after the 2020-2021 season. The school said the cuts will help make up for $100 million in football losses and an overall deficit of as much as $75 million this fiscal year.

“We are heartbroken for our student-athletes, coaches and staff,” Iowa President Bruce Harreld and Director of Athletics Gary Barta said in a letter posted to the Hawkeyes’ website.

The Big Ten announced Aug. 11 it was canceling all fall sports, including football, a major revenue source for the 14 conference members. The Hawkeyes are the only school so far that’s wiped out other intercollegiate sports teams to make up for the lost income, but many of the universities say losses could be near $100 million, with a combination of job and pay cuts, furloughs and delayed spending being deployed to fill the shortfalls.

The Big Ten is the highest-earning conference in the country, with fiscal year 2019 revenue of $781.5 million, according to an analysis by USA Today. Most of that money is generated by football and men’s basketball, which typically subsidize the rest of the athletic departments’ budgets. With the cancellation of the March Madness basketball tournament and now the 2020 football season due to the spread of the coronavirus, Big Ten schools have had to get creative about their finances.

Shared Sacrifice

Like Iowa, the University of Wisconsin projected losses of $100 million from the cancellation of football, but the Madison-based school, whose football team is ranked No. 12 nationally in the AP preseason poll, said it plans to cut pay, continue workshare furloughs begun in spring, freeze most hiring and travel, and delay its South End Zone renovation project.

“This shared sacrifice has allowed us to avoid these tough decisions other schools have already had to make, like eliminating sports or laying off employees or reducing support for student-athletes,” spokesperson Jessica Burda Leslie said in an email.

Pennsylvania State University, ranked No. 7 in the country, will sustain losses “reaching nine figures,” according to an Aug. 6 letter from Sandy Barbour, the school’s vice president for intercollegiate athletics. The Nittany Lions, like other Big Ten universities, is offering three options for ticket holders: full refund, rollover to 2021 or convert them to a tax-deductible donation to Penn State.

Sacrosanct Scholarships

Michigan State University said its losses could be as much as $85 million in an athletic department budget of $140 million. In a video call, Athletic Director Bill Beekman said $42 million of that represents personnel costs, which are being temporarily reduced, and $15 million are scholarships, “which is sacrosanct.” The remainder is for equipment, travel, facilities projects and other expenses, he said.

“This isn’t a year to try and figure out how we shave off 10% of this or 5% off of that,” Beekman said on the call. “This is a year when we start with zero and try to spend as little as we possibly can.”

The University of Michigan took in $56.6 million in ticket sales for all fall sports last fiscal year, according to Wolverines spokesman Kurt Svoboda. “That figure could theoretically go to zero without hosting events this academic year,” he said. The school is in discussions over how to deal with the potential loss, he said.

Difficult Decisions

Layoffs, reduced budgets and a travel freeze helped the University of Nebraska Athletic Department cut spending 10% starting July 1. The Cornhuskers announced 51 additional employees would go on furlough from Sept. 1 to Dec. 31.

“The postponement of the fall sports season, and specifically the football season, has put us in the position of making some very difficult decisions that impact every member of our staff,” Athletic Director Bill Moos said in a public post.

Paul Kennedy, a spokesman for Northwestern University, the only nonpublic member of the conference, said he wouldn’t share revenue losses.

The Big Ten and the Pac-12 are the only conferences among the so-called Power Five to call off their football seasons. The SEC, Big 12 and ACC are scheduled to go ahead with their schedules.

Meanwhile, the Big Ten is in discussions to reschedule fall sports for the spring. Ohio State University Head Coach Ryan Day says his team is keeping at its weight training, film study -- and Covid-19 testing.

“We have to play in January, February and March,” said Day, whose Buckeyes are ranked No. 2 in the country and would’ve had a shot at winning a national championship. “As a coach, you work your whole life for an opportunity to coach a team like this.”

©2020 Bloomberg L.P.