Supinie: Pandemic puts strain on Illinois athletic department budget
CHAMPAIGN – The Titanic is heading toward the iceberg.
In these next few days, next few months or perhaps, if things go better than expected, the next few months, college athletic directors like Illinois’ Josh Whitman wonder if a football season can be played and finished. Because if it isn’t, the world will change as we know it.
Whitman and his peers walk a tight rope between financial stability and player safety, all the while knowing if this pandemic wins the battle, there’s no escaping economic turmoil for college athletic departments that rely on the gold goose brought by football.
If the season disappears and takes ticket sales and TV money with it, Whitman will be in financial peril, faced with the likelihood of cutting sports and laying off chunks of athletic department personnel. But if you ask Whitman, this isn’t about the money.
“I know the cynic in all of us says, ‘Well, it’s about the money,’ and these decisions are being exclusively driven by financial considerations,’’ he said. “I really don’t like it when people question motives.’’
At the same time, he added, ‘’I’m not going to sit here and say we have no financial calculus. That wouldn’t be true.’’
The problems for Illinois began years ago when building and rebuilding with limited ticket sales in football and an inability to raise enough funds to cover the costs of the construction. With luxury boxes sitting empty during football weekends, club seats often open during basketball and fundraising unable to cover the void, Illinois already faced difficulty in keeping up with the upper curst of the Big Ten Conference.
That was even before adding a golf course the previous two Illini athletic directors passed up. Needless to say, Illini varsity hockey is years away, if ever being realized.
Among public universities, Illinois ranks second in the nation with athletic department debt at $325 million. The service debt is more than $20 million a year, Whitman acknowledged, and now comes a pandemic that might shut down the biggest revenue producers, if football goes the same route as the NCAA Tournament did last spring.
When college coaches are the highest paid employees in the state and $54 million a year from the Big Ten Network can’t keep schools from spending more than they make each year, it’s about the money.
And we’re about to find out who has more money than the rest of them, even if Whitman said this whole endeavor is about the sanctity of the amateur college experience.
For sure, it’s great to see young men and women playing games in the school colors, but the outrageous money spent over the last couple of decades – including the arms race in facilities and coaching salaries, coupled with bloated athletic department rosters – may come to an end because of a virus that might keep everyone on the sidelines this fall.
“We have $13 million in scholarships we fund for our 500 student-athletes in 21 sports,’’ Whitman said. “They’re getting a world-class education, a life-changing experience because of what we do.
“We have 300 employees in our athletics department that rely on us to help pay their rent or their mortgage, to put food on their table, to provide them with financial stability or security, insurance. We have a local economy here that relies on us to keep hotels open, restaurants, gas stations, retail establishments. And we give them the opportunity to provide our community members with jobs and disposable income.”
“I’m not going to sit here and say there aren’t financial considerations involved. Obviously, there are.’’
But Whitman and other athletic directors, primarily from the Power 5, must try to balance the budget with potential economic disaster around the corner while providing for the health and safety for athletes, coaches, and staff.
“None of us have ever experienced this before,’’ he said. “We’re all kind of making this up as we go.
“We have 500 athletes who worked most of their lives to be a student athlete at a place like the University of Illinois. They love playing their games, and we love watching them. We believe so strongly in the quality of that experience, and meaningfulness of that experience that so long as we can do it, and do it in a way where feel like we can provide for their health and safety, we’re going to do it. If we can’t, and at any point when we determine that we can’t, then we won’t.”
Obviously, Whitman said, there’s no plan to overcome a loss of $40-60 million in revenue from losing a football season. He’s tried to tighten the belt,
Whitman dropped the head count in the athletic department by roughly 20 people. He didn’t fill 11 vacancies and eliminated seven full time positions, plus some part-time help. That would account for $3-4 million in staffing changes, he said over a two-year period.
Whitman also took a 15-percent pay cut, and the higher pay levels in the department took a 7-percent cut. But the big question is if he would need to cut sports.
“I’ve been transparent about this with our coaches, staff and student-athletes,’’ Whitman said. “If things get to a certain point, you have to put everything on the table, including the elimination of positions, including salary reductions and including a potential look at our sports sponsorship. It doesn’t mean we’re going to do it. Anybody who says we can at $40-million reduction in revenue and isn’t at least evaluating the kind of savings that come in the change in the sport model isn’t entirely being forthcoming.
“I told the group we’re not cutting sports for now. But you never know what the future will bring. It’s every AD’s last resort. It’s ours as well.’’
But there are some things that must be paid, such as paying for scholarship and paying off that insane amount of debt.
“It’s obviously a big number,’’ Whitman said. “We, like most people, have a mortgage. That mortgage for us runs in excess $20 million per year. That’s one of our outstanding financial obligations as we work thru this financial situation and addressing those costs. Certain costs aren’t variable.’’
Paying off the debt, paying for scholarships and paying salaries are generally the pecking order. Illinois isn’t alone in this mess. Michigan ranks fourth among public school athletic departments with $300 million in debt, following immediately by Minnesota ($252 million) and Ohio State ($250). At the same time, Wisconsin is sitting on $190 million in reserves.
This pandemic will likely change the financing in big-time college sports. There’s a reason why the Power 5 have been so powerful. Sooner or later, it’s about the money.