The worst-case scenario for the University of Minnesota's athletic department has become a reality.
Only a few months ago, the Gophers athletics department projected revenue losses of up to $75 million if sports were canceled through the fall. On Tuesday, the Big Ten announced it is canceling the fall season for football and other sports because of the COVID-19 pandemic.
Athletic director Mark Coyle didn't mince words Tuesday when discussing the financial blow: "Our financial reality looks different now. It's going to require all of us to be very strategic in our thought process and how we move forward."
Asked specifically about the prospect of cutting sports, Coyle said: "We'll have to look at everything. All things are on the table."
Athletics leaders will have to make tough decisions in the coming months to stem the potential revenue hit. A $75 million loss would be down from the $130.5 million the department reported for the 2018-19 school year. Rhonda McFarland, the athletic department's chief financial officer, told the U's Board of Regents in May that "very few" college athletics departments could withstand such a loss.
The U is not the only Big Ten school expecting a significant hit from the loss of fall sports. Wisconsin has projected losses of more than $100 million, Michigan State could lose more than $80 million and Purdue predicts a hit of up to $50 million.
Wisconsin athletics officials have signaled the school might have to tap a reserve fund to cover losses. Pac-12 school Stanford announced last month it will cut 11 of its varsity sports programs because of the financial impact of the pandemic.
The Gophers athletics department has already taken some cost-cutting measures, such as voluntary salary reductions for head coaches and senior staff and freezes on hiring and spending. But some members of the U's Board of Regents say more significant actions will be required.
Regent Randy Simonson said further salary cuts should be considered but noted that "cutting $100,000 here or $50,000 there is a long ways from $75 million."
The athletics department should not rule out cutting sports programs, either, Simonson said. He would like to see a breakdown of how much each of the U's 25 sports programs costs, how much revenue they bring in and how much student participation they draw.
Regent Darrin Rosha also said program cuts could be on the table. What he would not support, he said, is pulling from the U's reserves or general fund to cover losses from athletics.
Regent Ken Powell, chairman of the board, floated the idea of a bridge loan to help support Gophers athletics in the event that sports are delayed for a full year.
"People are disappointed. We all love these sports," Powell said.
Regent Michael Hsu said he is skeptical about the athletics department's projection. The department needs to be more transparent in explaining how it calculated the $75 million revenue loss, he said.
Hsu added that U leaders can no longer delay decisions about the athletics department's future.
"I think there's a lot of work yet to be done," he said. "They're at the point now where they better start having some solutions."
