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Why a shortened or canceled college football season could have ‘cataclysmic’ effect on athletic departments nationwide
College athletic departments are at a crossroads.
University of Oregon athletic director Rob Mullens recently furloughed employees and hated it.
“These are great people who have contributed mightily to our success,” Mullens says. “We had to deliver them horrible news totally because of a circumstance that had nothing to do with their performance.”
The coronavirus pandemic has been a worldwide disruption to health and normalcy. For major college athletic departments, the body blows have just begun.
If the 2020 football season is abbreviated or canceled, it will hit college athletics like a tsunami, likely changing them forever. Some say change was inevitable, but few expected the flashpoint to happen now, triggered by a runaway virus.
The threat is imminent and very real. Football accounts for approximately 80% of Oregon State’s athletic department revenue. At Oregon, Mullens says, it’s between 70-75%.
A complete cancellation would be a multi-pronged financial disaster, costing schools ticket, concession and media-rights revenue. Donations tied to football almost certainly would drop dramatically.
College programs, largely built on the back of a single sport’s 12-game regular season in the fall, would come unmoored, severing the lifeline for non-revenue sports such as baseball, softball, track & field and volleyball.
“Cataclysmic,” says Paul Swangard, who teaches sports brand strategy and marketing at the University of Oregon.
It’s a worst-case scenario. But given the lack of a vaccine for the coronavirus, or proven, widely available treatments, it’s possible.
NOT STATUS QUO, NOT TYPICAL
Athletic departments all over the country are trying to anticipate what could happen, analyzing variables and trying to come up with models to respond. It’s not a pleasant process.
“We don’t have a single scenario that says it will be status quo, just like it was,” Mullens says.
UO officials say a typical conference home game is worth somewhere between $3.5 million and $4 million. An Oregon State spokesman said there were too many variables to accurately arrive at a similar dollar figure for a what a typical conference game would generate.
In any case, the 2020 season isn’t shaping up as typical.
Even if the Ducks begin their football season as scheduled on Sept. 5 against North Dakota State, few believe that fans will pack Autzen Stadium to watch it. In a recent Seton Hall Sports Poll, 72% of Americans said they would not attend sporting events until a vaccine for COVID-19 is available to the public.
It’s unclear at this point whether fans would be allowed inside the stadium or whether campuses even will be open — or should be — while the coronavirus lurks. For now, Oregon’s public university campuses are closed, with classes being conducted online.
“Step No. 1 is, will these universities be back in school like they normally would?” says Mark Massari, vice president at Van Wagner Sports & Entertainment and former deputy athletic director at Oregon State.
“That would mean the student-athletes can play sports in the fall.”
To be ready to take the field against North Dakota State, the Ducks would almost certainly need four to six weeks to prepare.
Portland State athletic director Valerie Cleary says the Vikings must begin making decisions in June to reopen campus in July so the PSU football team can get ready for its Sept. 5 opener at Arizona.
PSU’s nearly $14.7 million athletic department budget is underwritten by two nonconference games at Arizona and Oregon State that are worth approximately a $1 million total to the school.
“Without that, we would have to evaluate our operation for the fiscal year,” Cleary says.
None of the options are good ones.
There are all sorts of possibilities on the table for college athletic administrators, from playing football games without fans, to shortening the season to delaying it. The football season could even extend to the spring.
SHIFTING ENROLLMENTS
All the solutions create other problems. It’s shaping up as a migraine for the nation’s colleges and universities, already under the gun because of declining enrollments and rising expenses.
University of Oregon’s enrollment peaked at 20,829 in 2012-13 and is 18,903 this academic year. Portland State’s enrollment was 28,241 in 2014-15 and was at 26,012 when classes began last fall. Enrollment on Oregon State’s Corvallis campus hasn’t budged much between 2015-16, when it was 24,466, to this year, which is 24,252.
OSU has a robust Ecampus program for online learning, which has expanded from 5,110 in 2015-16 to 7,467 this year.
According to data released last spring by the National Student Clearinghouse Research Center, overall college enrollment had declined for eight consecutive years. The nationwide drop in enrollment last year from the year before was about 300,000 students.
There seem to be several reasons for this. There are fewer college-age students and there are more online options for students and families leery of being saddled with post-graduation debt.
Fewer students translates on campus into less money for student fees and fewer student ticket dollars. It also means lost revenue for room and board.
With classes going online this spring, there is a concern that some students might become comfortable with the format and decide to stay home and cut costs.
“You have to know you can’t charge the same online,” Massari says. “But you still pay the teacher. If the teacher is a full-time instructor, you also have to pay their salary and benefits.
“If you have a campus of 20,000 and suddenly it’s 17,000 because the other 3,000 have moved online, that’s an economic shift.”
That assumes all students who have migrated from learning on campus to learning online will return to the same school.
The University of Oregon has aggressively recruited out-of-state students who pay much higher out-of-state tuition. This year, out-of-state tuition and fees for a UO student total $36,615. In-state students pay $12,720.
Why should a student working on a laptop at home in Orange County shell out out-of-state tuition to attend the University of Oregon when the same student could be enrolled at Cal State Fullerton for a fraction of the cost?
And even if some students choose to remain at Oregon and take remote classes, those students won’t be living in campus housing or eating at campus dining facilities.
As revenues fall, operating expenses are rising. So, schools raise tuition. But every time tuition goes up, scholarships become more expensive for athletic departments.
The UO athletic department doesn’t take a direct subsidy from the school, but students do kick in $1.7 million for seating allocations in football and basketball, and free admission for other sports.
Oregon athletics also is on the hook for approximately $18 million in annual debt service for Matthew Knight Arena. The athletic department in 2018-19 had total operating expenses of nearly $129 million.
Many Division I athletic departments, Oregon State among them, need to be directly subsidized by the university to break even.
In fiscal year 2019, OSU budgeted a subsidy of $7.34 million in education and general fund money for an athletic department budget of more than $85 million. In addition, OSU received $500,000 in scholarship money for athletes from the school’s general financial aid funding.
Pac-12 football media rights deals are worth about $30 million per school. Conference spokesman Andrew Walker says it has no insurance or other means of replacing the lost revenue.
CUTTING SPORTS PROGRAMS
The top level of Division I is a pricey neighborhood.
According to numbers published by USA Today, Texas athletics generated more than $219 million in 2017-18, Texas A&M more than $212 million and Ohio State athletics generated $205 million.
Trying to keep up with heavyweights like Texas and Ohio State is difficult for schools with less fervent fans, smaller stadiums and less lucrative television contracts. That includes the Pac-12, which still is considered one of the five power conferences. It’s impossible for mid-majors.
“The bailout for a struggling athletic department is a university willing to subsidize it,” Swangard says. “I don’t know if that backstop is going be there.”
If not, the only option is to trim expenses. Commissioners from the Group of Five conferences, composed of mid-major Division I schools, recently proposed a temporary suspension of an NCAA rule requiring Division I schools to offer at least 14 sports.
Oregon has 20 sponsored sports, Oregon State has 16 and Portland State has 15, if you count cross country, indoor and outdoor track as three separate sports.
Approval almost certainly means at least a temporary end to some non-revenue sports, not only by mid-major schools.
“I think those commissioners were wise in getting in front of this and asking if we should look at a change in NCAA rules given this unique circumstance,” Mullens says. “I don’t think it hurts to look at all options because there are still so many unknowns.”
Dropping sports is more difficult than it sounds because federal law mandates equal opportunity for women. An athletic director couldn’t legally just start lopping off women’s programs, even if they aren’t money-makers.
Most men’s programs aren’t either. But football generally is, and there is no women’s equivalent in terms of scholarships or expenditures.
Once schools begin “temporarily” suspending varsity teams, how likely would they be to bring them back?
“I think if you had an honest conversation with a lot of athletic directors, they wouldn’t field that many teams if they didn’t have to,” Swangard says.
A NEW MODEL?
The sheer effort of trying to keep up with the SEC and Big Ten has become a staggering financial burden for most Pac-12 athletic departments, which don’t have the same resources, especially since the conference’s television revenues are lagging.
It’s been a problem for years, and the scope has been accelerating.
“People have been warning if we kept the arms race going, at some point there was going to be a radical moment when everything would fall apart,” Swangard says. “No one expected a global pandemic to be the reason why.”
Maybe this will lead to a massive reorganization of college athletics. Schools in the SEC and Big Ten and a handful of others willing and able to pay full freight could go on as before and the others could acknowledge they cannot and retreat to a more sustainable model of intercollegiate athletics.
David Ridpath is a professor of sports business at Ohio University and president of the Drake Group, a group of academics who decry the impact major college athletics have on the mission of higher education.
“I think this is an opportunity,” Ridpath says. “I think it’s time to really look at the enterprise of college athletics. … We’re the only country in the world in which elite sports development is primarily grounded in the education system.”
Ridpath believes it would be better for higher education if the U.S. adopted a European model in which athletes with professional aspirations trained primarily as members of privately funded clubs.
“College presidents and trustees have a kind of get-out-of-jail-free card,” he says. “They can actually say: ‘Look, we’re cutting all this academic stuff. But we also have to cut athletics because of this virus.’ The virus might end up being a way to reset college athletics.”
Some educators say the athletic programs get in the way of the university’s primary mission of higher education.
While many alums see athletics as a way to maintain an emotional connection with their alma mater, UO economics professor Bill Harbaugh says many members of the faculty feel differently.
“There are plenty of faculty who enjoy watching a game, but I don’t know many who physically go to football games,” Harbaugh says. “It’s too expensive for faculty. It’s a sideshow to what the faculty does. Sometimes it’s amusing, sometimes it’s horrifying. But it’s not central to anything.”
Ridpath and Harbaugh contend students also are increasingly disconnected to the athletic programs on their own campuses.
This generation of students has grown up in a world in which sports fans have an unlimited smorgasbord of viewing options on television or online.
“Why should they care about Old State U when they can watch 300 games on their phones?” Ridpath says. “You might have somebody at Ohio University who is a huge Texas fan and has never been there. People have become media consumers.”
In the end it, it probably won’t matter what people believe or want. The cold, hard numbers will have final say. At some point, it might not be economically feasible for most Division I college athletic programs to continue to operate as they have.
That point might be now.
