Sport managers prepare for at least 20% financial slowdown, poll finds

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Sports directors of the country’s biggest sports powers are preparing for a possible financial crisis linked to the coronavirus pandemic.

According to a survey released Thursday by LEAD1, an association of sports directors from 130 major college football schools, 63% predict a worst-case scenario in which their incomes will drop by at least 20% in the 2020-21 school year. Even a shortened soccer season could cost schools so much.

LEAD1 and Teamworks, a company that created an app designed to keep teams and sports departments connected, surveyed more than 100 sports directors from FBS schools. “The state of athletics in the face of the coronavirus” provides some insight into the main concerns of the country’s wealthiest sports departments.

The NCAA canceled winter and spring sports on March 12, separating thousands of university athletes from their teammates and coaches and preventing them from training and competing.

Sport managers interviewed said their biggest concerns about their athletes over the next three months were academic progress, mental health and the lack of resources for them when they weren’t on campus.

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And then there are the financial problems.

The cancellation of the Division I men’s basketball tournament cost NCAA $ 375 million to distribute to member schools.

When asked about their worst-case scenario analysis, 65% of sport directors said revenue for the 2019-2020 fiscal year would drop from 0 to 20%, with 35% expecting a drop from 0 to 10%.

Some schools are already taking steps to fill the gaps this year.

Iowa State has announced a temporary one-year pay cut for coaches and certain employees to save more than $ 3 million. The school will also suspend coaching bonuses for a year to save another $ 1 million.

“So much has changed in the world in a very short time,” said sporting director Jamie Pollard in an open letter to Cyclone fans. “It is even more daunting to realize that our world will continue to change at a rapid rate for the foreseeable future. “

Wyoming Sporting Director Tom Burman tweeted on Wednesday that he would cut his salary by 10% until December 31.

In the LEAD1 survey, 40% of the 95 DAs who responded said they agreed or strongly agreed when asked if they thought high earners should voluntarily offer to make a personal financial sacrifice during the crisis; about 15% refused or strongly refused.

Football season is five months away, and for most FBS schools, by far the biggest revenue driver. Any interruption in the football season could be devastating for university sports, as this income funds just about every other sports program.

“We often hear from AD and MMR [multimedia rights] sellers that nearly 85% of revenue comes from football, “said Matt Balvanz, executive vice president of analytics for Navigate, a sports marketing consultancy.

He said that the average Power 5 school generates about $ 120 million a year in income, “which means about $ 100 million a year in football.”

For the average Power 5 team, a home game is worth $ 14 million, including its value from a television rights deal, which represents more than 10% of average total income, said Balvanz.

“The larger departments can probably absorb a 10% loss, but if it increases to 20% and 30% with more games lost, then that could be a major problem,” he said.

Playing fanless games in the stands? Balvanz said the average Power 5 school gets about $ 30 million in ticket sales. If 85% of that comes from football, it represents a loss of 25 million dollars.

The sports directors interviewed by LEAD1 were asked about the sources of income that concerned them most. Donations and ticket sales received the most votes. Balvanz said a typical Power 5 school earns about $ 20 million to $ 30 million a year in donations, which could also hit a struggling economy.

Schools in the 5 conference group, which do not raise hundreds of millions of dollars a year from their television offerings, are more vulnerable.

Fifty percent of the Group of 5 sport directors in the LEAD1 survey said that losing tuition revenue was one of their main concerns. Tuition and campus grants account for an average of 30% to 50% of the revenue of Group of 5 schools, said Balvanz.

Kansas sports director Jeff Long told reporters last month that his staff are already beginning to figure out how to operate on less.

“What would a 10% reduction look like, what would a 20% reduction in our operations look like?” Said Long. “We have just started these projects as part of the strategic planning for the future, [we] have made no decision. Most of this is determined to what extent and for how long this crisis lasts. “



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