A ‘rona here, a ‘rona there and pretty soon you’re talking about real money.
Patrick Rishe, director of the sports business program at Washington University in St. Louis, believes the upcoming football season will be played — even if it’s during the spring — because of “astronomical financial implications” for athletic departments if it is canceled.
Quite simply, college athletics might not have a financial choice.
Rishe estimates that the 65 Power 5 schools would collectively lose more than $4 billion in football revenues, with at least $1.2 billion of that due to lost ticket revenue. Each Power 5 school would see at least an average loss of $62 million in football revenue, including at least $18.6 million in football ticket sales, he said.
Yeah, I can see where that could be a problem. There’s more to it than just that number, though.
For one thing, while TV is the main revenue driver, what comes from ticket sales isn’t inconsequential.
Public school Power 5 athletic departments on average made nearly half of their total operating revenue from football, with about 14% coming from football ticket sales alone, according to an analysis of 2017-18 financial data provided to ESPN by Syracuse University’s S.I. Newhouse School of Public Communications.
Athletic departments still need those asses in the seats to cover their nut… well, with a couple of exceptions.
About half of the public Power 5 athletic departments were self-sustaining in 2017-18, meaning revenue covered expenses without funding from student fees or university support. Take away football ticket revenue alone and only two schools still make the cut — Georgia and Texas A&M — according to the data from Syracuse University.
So where do you draw the line about attendance? It’s one thing to set up a regimen to test players and staff rigorously, but you can’t do that with your fan base.
Ah, but you say, that’s where the reserve fund comes in. Genius! Cover the shortfall as needed, as that rainy day is finally here. Sounds good, except…
In a multibillion-dollar industry, fewer than half of FBS athletic departments have financial reserves in place that could be used during this type of crisis, according to a recent survey by Lead1 Association, the professional organization that represents athletic directors at 130 FBS schools. In the survey of more than 100 ADs, 41% of Power 5 and 26% of Group of 5 departments confirmed having such a reserve.
But here’s the thing. Even at a place like Georgia that’s managed to save…
A self-sustaining budget coupled with financial reserves places the University of Georgia in a better financial position than most FBS schools should there be a canceled, shortened or delayed football season this fall.
According to the UGA athletic department, it has more than $102 million in reserve funds, which includes 2019-20 reserves, long-term investments and general endowment funds.
“We never thought it would be at this level,” UGA athletic director Greg McGarity said. “With a $153 million budget [for the 2019-20 fiscal year], we tried to stay in that three- to six-month period so we would be able to sustain our program.”
Georgia’s football program accounted for almost half of the athletic department’s $174 million in revenue from ticket sales and contributions alone in the 2018-19 fiscal year, according to its most recent NCAA Membership Financial Report. The Bulldogs generated $34.6 million in football ticket sales and $44.3 million from donations, much of which is attached to those tickets.
“You can run all of the numbers and projections, but if you don’t have that football part, it’s just agonizing,” McGarity said. “If you don’t have football revenue, where does your revenue come from? It’s a huge void that would create some dire situations on the operation of a program.”
… the first instinct isn’t to breathe a sigh of relief and tap those funds. It’s to do everything possible to make a football season happen, regardless. It’s as if the main point of having a reserve fund is not to use it.
Once criticized for not spending enough in the SEC’s seemingly never-ending arms race, the Bulldogs’ reserves will enable them to make things work — at least in the short term — if they can’t play football this fall or face a truncated, conference-only season.
That’s why they playin’. Everywhere.