Jump to content
Head Coach Openings 2024 ×
  • Current Donation Goals

    • Raised $2,716 of $3,600 target

IU Athletics' $25 million deficit is its largest ever. The university will help dig it out.


Muda69

Recommended Posts

https://www.indystar.com/story/sports/college/indiana/2022/02/02/covid-19-pandemic-causes-iu-athletics-deficit-indiana-university-mitigate-debt-25-million/9277242002/

Quote

IU’s athletic department faced a nearly $25 million deficit in the 2021 fiscal year, one closed with substantial help from the university.

That figure, confirmed through an NCAA-required annual financial report obtained via records request, matches numbers Athletics Director Scott Dolson laid out to IndyStar in an interview last June discussing the financial impact of COVID-19. It is the largest one-year deficit Dolson’s department has ever faced.

Per a spokesperson, the department’s work with the university to mitigate the impact of that shortfall is ongoing.

“IU athletics has worked with the institution at-large to restructure its financial obligation, including the deficit created by the pandemic,” the spokesperson told IndyStar. “(The department) continues to find creative ways to reduce expenses and maximize revenue streams, while continuing to work with the university at-large on the restructuring.”

The department will draw help from the university in a variety of forms.

Some will come as physical funds, loaned by the university directly to cover various deficits, while some will take the form of restructured debt service, allowing the department to defer or defray certain costs as it fills in the hole left by this shortfall. The department and the university will work together, adjusting both forms of assistance as needed while IU athletics repairs its finances. 

Where'd the money go?

There’s little mystery in where the money went — COVID-19 severely impacted meat-and-bones revenue streams that wound up costing the department eight figures. Indiana’s financial issues in the fiscal year 2020 reflect in numerous ways the wider challenges presented to major college athletics by COVID’s aftershocks.

Ticket sales, from which Indiana reported revenues exceeding $36 million across fiscal years 2019 and 2020, were a near-total loss, just $59,257 in 2021. The department also reported a dip approaching $3 million in gameday revenues related to things like parking and concessions.

Conference distributions fell from more than $4 million in each of the previous two years to $554,305 in FY21, after the Big Ten substantially pared down shares to individual schools to cover the costs of conference-sponsored COVID testing. The league said when it restarted sports in fall 2020 it would cover the costs of testing, but according to a report from NorthJersey.com, the conference deducted nearly $56 million in distributions to cover testing costs across the fiscal year, effectively passing the cost back to its member schools.

 

Even as Dolson told IndyStar last June that department donors “really stepped up,” contributions dipped from nearly $23 million in FY20 (and more than $28 million in FY19) to just $18.8 million last year. That decrease reflected both the wider financial uncertainty related to the ongoing pandemic, and the lack of in-person and retail fundraising made impossible by the conference ban on game attendance beyond team family.

And media rights — the most lucrative single revenue stream on IU’s athletics budget because it reflects the value of Big Ten television contracts — dipped by more than $10 million. That’s because the conference’s truncated football and basketball seasons did not fulfill its entire inventory of games for TV partners.

Severance payments also increased by more than $1.6 million. Most of that reflected former men’s basketball coach Archie Miller’s buyout, from his termination in March through the end of the fiscal year.

How'd IU cut costs?

Cost-cutting moves within the department and COVID-required changes to day-to-day operations did prompt savings in some areas.

For example, department-wide furloughs and job eliminations combined to save IU athletics nearly $3.8 million in coaching, staff and administrative salaries. A department-wide recruiting budget that crossed $2.5 million in FY19 and still ran past $1.6 million in FY20 was just $169,761 in FY21, as in-person recruiting was suspended by the NCAA for much of the fiscal year.

With no one to market to, the department’s marketing and promotional expenditures decreased by nearly $2.5 million. And with no nonconference football season, plus a dramatically scaled down nonconference basketball season, guarantees promised by the department to visiting opponents fell from more than $4 million in FY20 to just $793,275 in FY21.

The department proactively prepared for the coming deficit as early as spring 2020, during the transition between Dolson and outgoing AD Fred Glass. That’s when the staff-wide furlough plan was announced, as were substantial cuts in things like cellphone stipends and non-essential travel.

Dolson also approved the elimination of 32 full-time staff positions within his department during his first year on the job. Some were jobs left unfilled when employees left, while others were direct layoffs. Dolson estimated last June the cuts would save the department $2 million per year going forward.

“In all the budget-cutting position eliminations, none of those have been student-facing or really impacted our students,” Dolson told IndyStar in that interview. “That was one of our big intentions in cutting, we didn’t want our student-athletes to feel it.”

One multimillion-dollar revenue stream was also restored in FY21. After its canceled men’s basketball tournament forced the NCAA to substantially pare down distributions to member schools in FY20, the association returned to relative normal last year. IU’s reported NCAA distributions in FY21, $4,640,558, much more closely matched what the department reported in FY19 (approx. $4.7 million) than what it did in FY20 (approx. $1.8 million).

IU isn't only program struggling

But even combined, those measures and savings could not erase such a substantial deficit.

IU isn’t alone. Many, if not most, Big Ten schools will face some form of shortfall due to the impact of the pandemic, though those shortfalls will vary by school. In some cases, schools were able to alleviate the burden through added fundraising, while departments more reliant on gameday revenues — including the conference’s biggest football schools — could be hit harder.

According to figures obtained by USA Today, Purdue reported a shortfall of $8.1 million in its latest NCAA report. At Illinois, that was just $3.2 million. But at Iowa, one of those schools where a sizable portion of the budget will be derived from football gameday revenues, the FY21 deficit was $42 million. Ohio State reported a post-capital loans payments deficit of $41 million, and according to internal news reporting will examine the possibility of taking out an interest-bearing loan from its university at the end of this calendar year.

In addition to taking a $50 million loan with the help of its university administration, Iowa’s athletic department has cut sports since the beginning of the pandemic, though some were reinstated.

Dolson has been adamant since taking over the department that eliminating any of his 24 varsity programs would be a last resort, and IU has given no indication it plans to do so.

Sorry, government university athletic departments shouldn't be allowed to take on debt, when these loans are funded by the university itself.  Now you have Indiana taxpayers in effect funding government university athletic programs.   The answer should be to immediately cut negative-revenue sports to the bone.  You can't spend what you don't have.

 

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...