Now it hits the Big Boys wallets

[UCFBfan]

A Big Ten school becomes the first in the conference to cut sports programs due to lost revenue

A move that many have sadly projected was coming given the loss of Big Ten revenue this season happened yesterday. Wisconsin Athletic Director Barry Alvarez has been very public about the financial…

badgerswire.usatoday.com

Looks like it's not just the non P5 schools that are going to take a hit in this. Iowa cut 6 sports: men’s gymnastics, men’s swimming and diving, women’s swimming and diving, and men’s tennis.

 

[UCONNJACK]

Nebraska too.

Nebraska athletics announces furloughs, closes training table amid budget crunch

With the door closed on fall football, 51 members of the Nebraska athletic department will be furloughed from Sept. 1-Dec. 31.

omaha.com

 

[BlueDogs]

Terrible for those kids. They work their butts off too. Just not right.

 

[Palatine]

Football pays their entire athletic department budget. No football no dough.

 

[CL82]

Football pays their entire athletic department budget. No football no dough.

Football + media rights, but yeah. Don't underestimate the value of a packed (yuge) football stadium brings in.

 

[Chin Diesel]

First in with the "When will Pat Forde write an article about how these schools mismanaged their money?" comment.

 

[JohnFSilver]

How many of these programs put away all this money for a rainy day? How many programs took out disruption insurance such as what Wimbledon did?

Managers should have prepared for scenarios and mitigated risk. If they are going to act like a business, they should at lest be able to assess risk.

The line -- football pays for everything isn't good enough. They should have planned and controlled expenses on football and across the AD department just in case the had to have a drop in revenue.

This was absolutely a risk management gap that the universities didn't consider. Some types of insurance to help cover non-revenue programs in an event of a pandemic, war, terrorist attack.

 

[uconndogs]

How many of these programs put away all this money for a rainy day? How many programs took out disruption insurance such as what Wimbledon did?

Managers should have prepared for scenarios and mitigated risk. If they are going to act like a business, they should at lest be able to assess risk.

The line -- football pays for everything isn't good enough. They should have planned and controlled expenses on football and across the AD department just in case the had to have a drop in revenue.

This was absolutely a risk management gap that the universities didn't consider. Some types of insurance to help cover non-revenue programs in an event of a pandemic, war, terrorist attack.

Great point!

 

[AndOne]

Football pays their entire athletic department budget. No football no dough.

Probably also hurts those schools by not getting a big cut from student fees to help fund their athletic dept. Student fees at Iowa is like $800. Whereas UConn is $3,400.

 

[Skiblets]

How many of these programs put away all this money for a rainy day? How many programs took out disruption insurance such as what Wimbledon did?

Managers should have prepared for scenarios and mitigated risk. If they are going to act like a business, they should at lest be able to assess risk.

The line -- football pays for everything isn't good enough. They should have planned and controlled expenses on football and across the AD department just in case the had to have a drop in revenue.

This was absolutely a risk management gap that the universities didn't consider. Some types of insurance to help cover non-revenue programs in an event of a pandemic, war, terrorist attack.

That's asking way too much of Administrators in State-run schools. They've all been raised in the 'if you don't spend it this year they'll take it away next year' school of management. Sound business advice from you? Absolutely!! Sound business advice ever executed in government bureaucracies? Ummmm. Never!!

 

[JohnFSilver]

Probably also hurts those schools by not getting a big cut from student fees to help fund their athletic dept. Student fees at Iowa is like $800. Whereas UConn is $3,400.

That's asking way too much of Administrators in State-run schools. They've all been raised in the 'if you don't spend it this year they'll take it away next year' school of management. Sound business advice from you? Absolutely!! Sound business advice ever executed in government bureaucracies? Ummmm. Never!!

Exactly. Then, they aren't a business and can't whine when their budgets don't match. Deal like the rest of the world. That's what has annoyed me the most about this. The Athletic Directors act like kings, then business went south, and they immediately blame the government and whine about no money means problems.

No crap. Welcome to the real world. They should all have minimally figured out direct cost expense for their programs, which would be overhead for coach salaries and equipment grounds Maintainance. And kept that as a rainy day (UConn, of course, is in a deficit and couldn't do this). But no excuse for Iowa or Michigan to be decimated by this. There have brought in probably a billion this decade in revenue.

Manage expenses.

 

[Chief00]

How many of these programs put away all this money for a rainy day? How many programs took out disruption insurance such as what Wimbledon did?

Managers should have prepared for scenarios and mitigated risk. If they are going to act like a business, they should at lest be able to assess risk.

The line -- football pays for everything isn't good enough. They should have planned and controlled expenses on football and across the AD department just in case the had to have a drop in revenue.

This was absolutely a risk management gap that the universities didn't consider. Some types of insurance to help cover non-revenue programs in an event of a pandemic, war, terrorist attack.

But football is their revenue - period.

Lots of insurance policies have exemptions for the types of items you mentioned. Could you buy high priced Speciality insurance to cover these things? Perhaps, but it’s tough justifying that expense for something that’s never happened before to close down a season. You would also have long court cases regarding if a school should have reasonably suspended football and that will be a high bar, especially if others do it successfully.

 

[UCFBfan]

But football is their revenue - period.

Lots of insurance policies have exemptions for the types of items you mentioned. Could you buy high priced Speciality insurance to cover these things? Perhaps, but it’s tough justifying that expense for something that’s never happened before to close down a season. You would also have long court cases regarding if a school should have reasonably suspended football and that will be a high bar, especially if others do it successfully.

Football is the revenue, I agree. However, the TV money and bowl money alone should be enough to cover these costs. Now add in merchandise and license agreements and Booster donations and you have extra cash to allow you to stash some away.

This is the same problem the NCAA is going to have if the Tourny is cancelled in March again.

 

[freescooter]

Exactly. Then, they aren't a business and can't whine when their budgets don't match. Deal like the rest of the world. That's what has annoyed me the most about this. The Athletic Directors act like kings, then business went south, and they immediately blame the government and whine about no money means problems.

No crap. Welcome to the real world. They should all have minimally figured out direct cost expense for their programs, which would be overhead for coach salaries and equipment grounds Maintainance. And kept that as a rainy day (UConn, of course, is in a deficit and couldn't do this). But no excuse for Iowa or Michigan to be decimated by this. There have brought in probably a billion this decade in revenue.

Manage expenses.

John While I agree with some of this, there was a great piece on the public university “business model” recently that I read. The New Yorker I think but could have been the Times. Most public universities were already under funded relative to where they where prior to the 2008 recession. As a result they have been operating based on unsustainable models for a while. Federal funds that go to students through such things as PELL grants and various student loans, and by increasing the numbers of non-state and international students who can pay full freight. And on Top of that over the past few decades universities have felt the need to add fairly expensive “fun” elements, gyms in dorms, apartments with all the amenities rather than double dorm rooms, movie Theaters and malls on campus. Recruiting students has become an industry that didn’t exist 20 years ago. And since no one focuses on education, after all most first time consumers are 18-19, faculty are no longer full time tenured professors but adjuncts. The makeup has gone from 70-30 to 45-55 full time to adjunct since the early 2000s. Now Covid 19 hits an the income side takes a huge hit, the schools have Fixed costs of these facilities and fewer students, thus fewer federal dollars since that money goes with the student. Despite their arrogance and supposed independence athletic departments are part of the larger institution so they are getting hit by both losses of their traditional income, tickets, tv , and getting hit by the same losses at the institutional level. They really couldn’t plan for that. UNC for example, or Michigan State face huge losses in covering the operating costs for everything from dorms to gyms to losses of literally millions in parking ticket revenue. Athletic departments have really just mirrored the activities of the larger universities building practice facilities with tons of amenities because you know football players and basketball players can’t possibly lift the same weights and need their own lazy rivers...now they have to carry those costs without the revenues just like their institutions.

 

[Skiblets]

John While I agree with some of this, there was a great piece on the public university “business model” recently that I read. The New Yorker I think but could have been the Times. Most public universities were already under funded relative to where they where prior to the 2008 recession. As a result they have been operating based on unsustainable models for a while. Federal funds that go to students through such things as PELL grants and various student loans, and by increasing the numbers of non-state and international students who can pay full freight. And on Top of that over the past few decades universities have felt the need to add fairly expensive “fun” elements, gyms in dorms, apartments with all the amenities rather than double dorm rooms, movie Theaters and malls on campus. Recruiting students has become an industry that didn’t exist 20 years ago. And since no one focuses on education, after all most first time consumers are 18-19, faculty are no longer full time tenured professors but adjuncts. The makeup has gone from 70-30 to 45-55 full time to adjunct since the early 2000s. Now Covid 19 hits an the income side takes a huge hit, the schools have Fixed costs of these facilities and fewer students, thus fewer federal dollars since that money goes with the student. Despite their arrogance and supposed independence athletic departments are part of the larger institution so they are getting hit by both losses of their traditional income, tickets, tv , and getting hit by the same losses at the institutional level. They really couldn’t plan for that. UNC for example, or Michigan State face huge losses in covering the operating costs for everything from dorms to gyms to losses of literally millions in parking ticket revenue. Athletic departments have really just mirrored the activities of the larger universities building practice facilities with tons of amenities because you know football players and basketball players can’t possibly lift the same weights and need their own lazy rivers...now they have to carry those costs without the revenues just like their institutions.

The point is the lack of will and creativity from universities to adjust their business models when circumstances change. First reaction is always to say that they're underfunded rather than get creative and make tough choices like the rest of society has to do. 'We need more money', 'we need to raise student fees', 'we need more help from the state'. Meanwhile the bricks and mortar academic model will never be the same. High end schools will be fine but will start poaching students from next level schools who will do the same down the line. Academic Darwinism. Add in fewer kids in total going to college and fewer international students due to Covid and the whole model is going to crash.

The point is, well run organizations are resilient and have contingency plans for these events. Schools are not well run

 

[CL82]

How many of these programs put away all this money for a rainy day?

Great point. The media rights bubble dumped a prodigious amount of money on P5 schools. I suspect that you are right and relatively few of them created a sinking fund from a portion of that money

 

[JohnFSilver]

Look at the crazy spending of those AD departments. They had so much money in tv revenue, they all bought new training centers, ridiculous locker rooms, paid assistant coaches $1 million.

I just dont think with a budget if $125 million and revenues of $125, that they couldn’t find a way to setup a Rainey day fund.

John While I agree with some of this, there was a great piece on the public university “business model” recently that I read. The New Yorker I think but could have been the Times. Most public universities were already under funded relative to where they where prior to the 2008 recession. As a result they have been operating based on unsustainable models for a while. Federal funds that go to students through such things as PELL grants and various student loans, and by increasing the numbers of non-state and international students who can pay full freight. And on Top of that over the past few decades universities have felt the need to add fairly expensive “fun” elements, gyms in dorms, apartments with all the amenities rather than double dorm rooms, movie Theaters and malls on campus. Recruiting students has become an industry that didn’t exist 20 years ago. And since no one focuses on education, after all most first time consumers are 18-19, faculty are no longer full time tenured professors but adjuncts. The makeup has gone from 70-30 to 45-55 full time to adjunct since the early 2000s. Now Covid 19 hits an the income side takes a huge hit, the schools have Fixed costs of these facilities and fewer students, thus fewer federal dollars since that money goes with the student. Despite their arrogance and supposed independence athletic departments are part of the larger institution so they are getting hit by both losses of their traditional income, tickets, tv , and getting hit by the same losses at the institutional level. They really couldn’t plan for that. UNC for example, or Michigan State face huge losses in covering the operating costs for everything from dorms to gyms to losses of literally millions in parking ticket revenue. Athletic departments have really just mirrored the activities of the larger universities building practice facilities with tons of amenities because you know football players and basketball players can’t possibly lift the same weights and need their own lazy rivers...now they have to carry those costs without the revenues just like their institutions.

You have a link to that. Would like to read it.

 

[Waquoit]

Look at the crazy spending of those AD departments. They had so much money in tv revenue, they all bought new training centers, ridiculous locker rooms, paid assistant coaches $1 million.

Exactly, I don't want to hear poverty from any program that pays assistants over a million.

 

[huskymedic]

Iowa Hawkeyes Drop 4 Sports, Admit They Are In Deep Financial Trouble (Forbes)

Iowa Hawkeyes Drop 4 Sports, Admit They Are In Deep Financial Trouble

Division I athletic programs are dropping sports as a way to address the looming deficits in their budgets. But is that the answer?

www.forbes.com

 

[Skiblets]

Iowa Hawkeyes Drop 4 Sports, Admit They Are In Deep Financial Trouble (Forbes)

Iowa Hawkeyes Drop 4 Sports, Admit They Are In Deep Financial Trouble

Division I athletic programs are dropping sports as a way to address the looming deficits in their budgets. But is that the answer?

www.forbes.com

Almost like it was written by John Silver..

 

[jdb50]

As this covid-19 event has been unfolding I have wondered when the salary structure of bigtime sports would hit the chopping block. The Forbes article was written like an indictment. The salary arms race is on trial.

 

[JohnFSilver]

As this covid-19 event has been unfolding I have wondered when the salary structure of bigtime sports would hit the chopping block. The Forbes article was written like an indictment. The salary arms race is on trial.

how dumb is cutting sports?

You Have a $130 million budget and your answer for a $100 million revenue gap is to subtract 1%?

It really is a joke.UConn, it makes sense. Every nickel out is a nickel not coming back. But who zero bases $100 million in revenue?

I tell you. People who are looking to hide profit. They don’t want a profit on the books becuase that means they are a business. So, they spend like drunken sailors on lazy rivers, coach salaries, almost anything to show they actually aren’t a business.

They invent expenses. It is insane.

 

[Watchdog]

how dumb is cutting sports?

You Have a $130 million budget and your answer for a $100 million revenue gap is to subtract 1%?

It really is a joke.UConn, it makes sense. Every nickel out is a nickel not coming back. But who zero bases $100 million in revenue?

I tell you. People who are looking to hide profit. They don’t want a profit on the books becuase that means they are a business. So, they spend like drunken sailors on lazy rivers, coach salaries, almost anything to show they actually aren’t a business.

They invent expenses. It is insane.

We were looking at some old UConn memorabilia and came across a 1966 Yale/UConn football program book with photos of the team and coaches. Only six coaches. Maybe there was a strength coach but nothing like the list of support staff today.

Today we have eleven coaches and fourteen others in various support positions such as player personnel, operations, community affairs, etc.

The NFL has a great thing going. The colleges develop the players for free and the NFL gets trained, mature, athletes who've performed at such a high level the scouting is easy.

 

[uchusky32]

First in with the "When will Pat Forde write an article about how these schools mismanaged their money?" comment.

This is what hspoens when you live check to check.

 

[FroginCT]

The point is the lack of will and creativity from universities to adjust their business models when circumstances change. First reaction is always to say that they're underfunded rather than get creative and make tough choices like the rest of society has to do. 'We need more money', 'we need to raise student fees', 'we need more help from the state'. Meanwhile the bricks and mortar academic model will never be the same. High end schools will be fine but will start poaching students from next level schools who will do the same down the line. Academic Darwinism. Add in fewer kids in total going to college and fewer international students due to Covid and the whole model is going to crash.

The point is, well run organizations are resilient and have contingency plans for these events. Schools are not well run

Like the state of CT?