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The Minnesota State High School League took two urgent steps Tuesday to address extraordinary challenges that threaten the 2020-21 sports year for tens of thousands of state athletes.

The league’s board of directors established a task force to implement return-to-play scenarios to match what likely are three options for the upcoming school year under consideration by Gov. Tim Walz and education leaders: A return to full classroom use, a continuation of distance learning started in the spring, or a hybrid that uses both approaches. Last spring all school activities were canceled when school buildings closed in favor of distance learning.

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The board approved a second task force to significantly overhaul what board treasurer Tom Jerome called “an unsustainable and in some ways archaic” approach to funding the $9 million organization. The shift is expected to push for the league’s nearly 500 member schools to contribute more financially to reduce the reliance on state tournaments, which currently generate about 80% of the league’s revenue.

Time is short for both groups.

Walz and state officials are expected to announce their decision about schools in about two weeks, with fall season practice scheduled to begin just three weeks later, on Aug. 17. If fall activities are canceled, the league is projecting a $466,000 deficit, according to figures provided to board members at Tuesday’s virtual meeting.

That deficit balloons to $3.2 million if winter activities are also canceled. That would include the boys’ hockey state tournament, the league’s biggest revenue-generating activity.

Tuesday’s meeting was the board’s seventh of the school year, an additional gathering scheduled in response to the rapidly changing environment.

The return-to-play task force is composed of the league’s eligibility committee and liaisons from around the state. League Executive Director Erich Martens said the group should expect “about a week and a half of significant work” to prepare the high school league’s plans.

At a league board workshop Monday, members offered options such as moving some or all fall sports to the spring of 2021 if classes are not fully resumed in schools. Or instead of moving sports, holding fewer competitions with shorter seasons and limited postseason tournaments.

The league’s financial concerns predate the onset of the coronavirus in March.

In February, the directors unanimously approved raising each school’s annual league membership fee from $120 to $160 for the 2020-21 school year. In addition, the fee that schools pay the league per activity also rose from $120 to $160. And schools also will be charged $1 per student enrolled, adjusted for free- and reduced-lunch numbers.

The effect of those activity fee increases on individual students and families was left for schools to decide.

Those increases were the first step in a desired revenue stream change. Currently, about 80% of the league’s funding comes from ticket sales, television and sponsorship revenue generated by what assistant director Rich Matter called “our state tournament product.”

Martens said “the programming our schools seek is a $5 million product” that includes about $650,000 in catastrophic and concussion insurance. The league sponsors 43 activities and prefers moving toward basing the operating budget on sustainable school-produced fees rather than unpredictable state tournament revenue.

The increased school fees represented much of what had been expected to be an $800,000 excess in revenue after expenses for the school year before COVID-19 wiped out much of the boys’ and girls’ basketball state tournaments and the spring sports season.

Since then, the league has laid off two staff members while two additional jobs are expected to be left vacant.

“It’s not a knee-jerk reaction,” Jerome said. “But I think the changes brought by the pandemic have forced this issue out of the shadows and into the light.”

The task force will explore the necessary dollars and cents while also selling schools on the increased fees.

“The problem is, this isn’t incremental. We need it now,” said board member Mike Domin, a Minnesota School Board Association representative. “Are some schools going to balk? Some probably will. But I think they will see the value.”

The next board of directors meeting is Aug. 4.

At that meeting the league is expected to take action ending the sale of printed state tournament programs. The league’s marketing and communications committee recommended switching to downloadable programs — something 31 states do. It would provide annual savings of $170,000 to $195,000.