Pandemic Hits College Sports

The financial fallout of the coronavirus pandemic has prompted athletics departments at Division I institutions to consider reducing numbers of sports programs.

April 24, 2020
 

Ali Wahab learned on a Zoom call that he would no longer be a wrestler for Old Dominion University.

None of the 32 students in the program would be, either, his coaches said during the hastily arranged virtual meeting earlier this month when they announced the bad news. The university is eliminating the wrestling program, and the decision was made in part because of the coronavirus pandemic.

“Regardless of understanding the circumstances or not, we thought that we were untouchable to getting cut because we’re some of the most consistent with our winning,” said Wahab, a senior who would have competed in his final year during the 2020-21 academic year. “I’m feeling angry about how they decided to cut wrestling and trying to hold myself back from saying something I shouldn’t every time someone talks about it.”

He said a “wound is still open” from the cut, which in the end will save the university around $1 million in expenses, a statement published by the university’s athletic department said. Current and incoming wrestlers with athletic scholarships such as Wahab will have them for an additional year, which he said is the least the university can do.

Old Dominion wrestling and the University of Cincinnati men’s soccer program are the early victims of what are likely to be more sports program cuts as the coronavirus pandemic wreaks havoc on the budgets of universities across the country. More “nonrevenue” athletic programs such as these, which have high operating costs and typically do not bring in any funds for athletic departments, could be on the chopping block as institutions assess the financial damage in the coming weeks and months.

Athletic departments are starting to have tough conversations about where cuts need to be made, said Sam Perelman, a second-year graduate student at Old Dominion and vice chair of the National Collegiate Athletic Association’s Student Athlete Advisory Committee, or SAAC. A “very low number” of athletic departments were profitable before the pandemic, and the slowing economy is making it harder for them to keep all their programs, said Perelman, who was speaking personally and not for the SAAC.

“You hate to see it,” said Perelman, who played his final year of tennis for Old Dominion last year. “There is such a financial strain at this point. Not just at ODU, but across the country.”

Perelman said most college athletes would hope that all other options are exhausted before programs are cut. But as commissioners of the NCAA's various Division I conferences consider the financial health of their member institutions, they are asking the association to temporarily reduce the number of sports each college is required to sponsor. This puts nonrevenue programs such as volleyball, wrestling, soccer and swimming and diving at risk of “extinction,” said Kathy DeBoer, executive director of the American Volleyball Coaches Association.

DeBoer and other leaders in the Intercollegiate Coach Association Coalition, or ICAC, oppose the proposal to waive the sport sponsorship requirement, which they see as a move to allow for the permanent dropping of certain sports, she said. College coaches' associations are discussing ways expenses can be reduced, but DeBoer called the suggestion that institutions should sponsor fewer sports “lethal and cruel and toxic.”

“Sports can recover from schedule changes and reductions. Sports can recover from staffing reductions and even scholarship reductions,” DeBoer said. “We can recover from anything but extinction. You don’t recover from extinction.”

Craig Thompson, commissioner for the Mountain West Conference, which is part of the Group of Five, "has been clear it’s not about cutting sports," Javan Hedlund, a spokesperson for the conference, said in an email. Hedlund noted that Thompson has repeatedly emphasized that he favors reductions in travel and the number of competitions held rather than elimination of programs. Thompson was not available for an interview.

The 130 institutions in Division I that are part of the Football Bowl Subdivision, or FBS, in which the top football teams in the country compete, are required to sponsor at least 16 athletics programs including football, according to the NCAA’s bylaws. A minimum of six of these teams must be men's or mixed gender, and at least eight must be all-female programs, the bylaws say. There are a number of other requirements for institutions to be part of the FBS, such as minimums for financial aid awards granted to athletes and the number of contests scheduled.

All these requirements come at a cost to institutions, and commissioners of the Group of Five conferences, which represent 63 midmajor universities, sent a letter to NCAA president Mark Emmert to ask for a four-year waiver, given the current financial state of higher education. The waiver would provide college officials with “the ability to make prudent and necessary decisions for the financial well-being of the institution” while maintaining the colleges' status as FBS members, said the April 9 letter to Emmert signed by the five commissioners. Commissioners for the remaining 22 Division I conferences, outside the Power Five, have joined this request as well, ESPN reported.

“The COVID-19 pandemic and resultant economic turmoil has resulted in the direst financial crisis for higher education since at least the Great Depression,” the letter said. “Providing short-term relief from a handful of regulatory requirements will facilitate the opportunity for institutions to retrench and rebuild the financial structures of the institution.”

Large decreases in enrollment, state appropriations, philanthropy and endowment value are having a negative impact on colleges' bottom line, the commissioners explained. Division I institutions also saw a $375 million cut to their NCAA revenue distributions as a result of the cancellation of the March Madness men’s basketball tournament, and uncertainty surrounds the 2020-21 college football season.

The letter to Emmert also raises questions about institutions’ compliance with Title IX, the law prohibiting sex discrimination at federally funded colleges, which requires an “equal opportunity” for both men and women to participate in sports and receive scholarships. No conference or institution is likely to ask for Title IX compliance waivers, and they shouldn’t, said Amy Perko, CEO of the Knight Commission on Intercollegiate Athletics. Institutions with football programs would be left with “narrow” choices on which sports to cut, and nonrevenue men’s sports would specifically be at risk should NCAA leadership accept the commissioners’ request, she said.

DeBoer said it’s “shortsighted” to consider eliminating opportunities for college athletes who receive much fewer scholarships because they play non-revenue-generating sports. These athletes pay tuition and fees, she said.

“This is a time when higher education is losing enrollment,” DeBoer said. “We all know that athletics is one of the drivers to enrollment in higher education. It drives kids to college that wouldn’t normally go to college.”

The pandemic is a time of reckoning for Division I athletic departments, which have historically poured revenue into creating powerhouse facilities and programs but failed to save funds and prepare for a “blip in their system,” said Nick Schlereth, a recreation and sport management professor at Coastal Carolina University who studies collegiate athletics' cash flow. Departments are incentivized to build winning teams, not reserves, and if they overspend, they are typically covered by other university funds, he said.

“This is all the product of not being great stewards of the budget,” Schlereth said. “There’s been a lot of overspending. The times have always been good, and we haven’t thought about it.”

Less than half of athletic directors at institutions with the nation’s top Division I football teams have financial reserves for crises like the current pandemic, according to a recent survey of 100 directors conducted by the LEAD1 Association, which represents the 130 athletic directors in the FBS, and Teamworks, an athlete engagement platform. Forty-one percent of institutions in the Power Five conferences, which are made up of more than 50 large public universities, reported they have financial reserves, while just 26 percent of the Group of Five said they have funds saved.

Institutions in the Group of Five conferences rely much more on student fees and financial support from their universities, according to 2018 athletics budget data collected by the Knight Commission. As universities are beginning to announce revenue losses, hiring freezes and drops in enrollment, Group of Five athletics departments may become financially unstable, Schlereth said.

The Power Five, which includes the Atlantic Coast Conference, Big 12, Big Ten, Pac-12 and Southeastern Conference, collects almost all of its revenue from media-rights contracts for sports broadcasting, postseason football appearances, ticket sales and donors, Knight Commission data show. These universities and their highly competitive and profitable football programs are holding on to hope that the 2020-21 season will be played in some form or fashion. If not, $4.1 billion, an average of $78 million per institution, will be at risk, according to a USA Today Sports analysis of Power Five financial reports.

Perko said instead of asking individual athletic departments to make cuts, NCAA leaders should be discussing options to reduce operation costs broadly, particularly the nonrevenue sports, which rely largely on lucrative football and sometimes basketball programs. Discussions about restructuring current conferences “may seem like a radical suggestion,” but making them more regionally based, for example, could reduce the cost of athletes’ travel, Perko said.

“There’s already lots of conversations happening even among the conferences that have the most resources about how to offer some sports competitions in this coming year that are different from their traditional structure, to reduce cost, but also taking into account the crisis we’re dealing with,” Perko said.

The Division I Council, a 40-member legislative body of intercollegiate athletics officials and student athlete representatives, will meet twice at the end of this week to discuss any national solutions before the NCAA Board of Directors meets on April 28. It’s the time to "be creative and maybe even wave in new era of college athletics," said Perelman, who sits on the council.

“Every athletic department is a little bit different, but things are going to have to change,” Perelman said. “That’s the fact of the matter, at least for the short term.”

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