MINNEAPOLIS -- The University of Minnesota Board of Regents’ emergency meeting Tuesday estimated the coronavirus pandemic could strip Gophers athletics of anywhere between $10 million and $75 million.
Using “very early estimated revenue losses,” the U outlined three scenarios in how the department’s finances might unfold amid uncertainty on when regular athletic activities could return in the COVID-19 crisis.
Here are the projected losses in the three scenarios:
- “Best case” though spring: $10 million
- “Moderate” into summer: $30 million
- “Severe” into fall: $75 million
The U of M’s athletic spending was $129 million in 2018-19, so the severe case would be a 58% decrease in what the university spent in the last athletic year. Revenue primarily comes from ticket sales, NCAA allotments, TV contracts, fundraising and merchandise sales.
University of Minnesota president Joan Gabel asked Gophers athletic director Mark Coyle to present budgets that line up with each of these scenarios at the Regents meeting May 7-8.
Gabel made this request to Coyle’s department, and to the U of M’s medical school, because of the “unique attributes to parts of the institution to which they are responsible. They will prepare their own plans … in sync with the regular budget presentation that was scheduled for that time.”
Coyle said in a statement Tuesday that he has “had several meetings with our head coaches, staff and the leadership of our Student-Athlete Advisory Committee and conveyed to them that our budget will look different going forward. We are currently evaluating our budget. …
“It is also important to note that the models presented today reflect only potential lost revenue and do not take into consideration any expenses that would not be incurred in each scenario.”
The “best case” would be a return to activities as normal this fall. The “moderate case” would be reduced activity through summer and “nontrivial” impacts into fall.
Regent David McMillan said he believes the “moderate” case is actually the “best” case. “I don’t want to be a downer here,” he said.
The “severe case” is a reduction into fall and a return to operations in spring semester 2021.
Gabel said it is premature to say when a decision would be needed on starting fall classes as usual, but they “want as much runway as possible.” That could mean developments in the “earliest part of summer,” she said.
The NCAA reduced its financial distribution to Division I conferences from approximately $600 million to $225 million on March 26. The cut was due to the cancellation of the NCAA men’s basketball tournament that generates roughly $1.1 billion in annual revenue.
Division I programs received 2% to 5% of total operating revenue from the NCAA in fiscal year 2019, USA Today reported.
Iowa State was one of the first major NCAA Division I programs to make cost-cutting moves. Last week, Cyclones AD Jamie Pollard made a one-year 10% reduction to pay and cut to bonuses for coaches and himself, delaying seating donation plans and freezes on season-ticket prices.
That plan would save $4 million, Pollard said, and that seems to only be the first step as time continues to pass without games and practices amid social distancing.
“But if we can’t play football this fall,” Pollard told reporters in Iowa, “I mean, it’s Ice Age time.”