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Wisconsin Athletics' revenue hit from COVID-19 could pass $100 million without a football season
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UW ATHLETICS | PANDEMIC EFFECT

Wisconsin Athletics' revenue hit from COVID-19 could pass $100 million without a football season

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Barry Alvarez and Paul Chryst

Badgers athletic director Barry Alvarez, left, said he would be willing to listen to proposals to push the fall sports calendar, including football, to the spring.

Even in what could be a best-case scenario given the current landscape, the University of Wisconsin athletic department is anticipating a revenue loss of at least $60 million for the 2020-21 school year because of the COVID-19 pandemic.

Barry Alvarez mug

Alvarez

If the financially lucrative football season is canceled entirely, the revenue impact could be greater than $100 million, according to UW.

Responding to questions about finances, an athletic department spokesperson provided written statements saying that it is “highly likely” that UW will have to use a reserve fund to cover losses this fiscal year.

In a scenario being modeled by the department in which the Badgers football team plays the conference-only schedule now on the table and all other UW sports continue, revenues are projected to decline by $60 million to $70 million in an operating budget that calls for spending about $139 million.

Between ticket revenue, seat donations, sponsorships, parking, concessions and TV-driven conference distributions, the value of playing football games is substantial at UW and most major college athletics programs.

But in an interview Tuesday, athletic director Barry Alvarez said UW won’t put finances ahead of the health and safety of players during the pandemic.

“We’ve got to feel comfortable that our athletes will be safe before we move forward,” said Alvarez, who added that he assures recruits’ parents that his department will care for their children. “I want to be able to look them in the eye and say, yeah, I feel comfortable that they’ll be safe.”

Athletic directors don’t get to feel sorry for themselves in times of worry, Alvarez said. They have to be proactive and figure out solutions.

The financial outlook, however, will put UW under strain.

If there’s a football season, it’ll be without at least a large percentage of the crowds that help drive revenue. That’ll impact the finances “considerably,” Alvarez said.

The athletic department will work with campus officials to determine how many — if any — fans would be allowed to watch Badgers home games in person, he said. The number of games to be played in a conference-only 2020 football schedule hasn’t been determined.

Reserves in play

UW said it didn’t have to tap into an operating reserve fund held at the UW Foundation to cover a projected deficit of around $2.5 million for the 2019-20 fiscal year that ended June 30. That probably will change this year.

The reserve fund totaled more than $190 million at the end of the 2018-19 fiscal year, according to an audit. Most was held in endowments or targeted for specific capital projects, UW said, so the available amount in the reserve isn’t enough to cover the loss of an entire year of operating revenue.

The athletic department said it will prioritize rebuilding the fund in the future, signaling that the financial impact of the coronavirus will continue over upcoming years.

“We’d have to go right back and start trying to build it back up again,” Alvarez said. “Along the way, we’ve been generous to campus. We’ve moved some of our revenue to campus. But when you dig into the reserve, when you go through that, this is going to affect everyone financially.”

Preliminary figures for the 2019-20 fiscal year showed operating revenue for athletics was off by more than $11 million compared to the budgeted amount.

UW Athletics had $123 million in operating revenue, according to initial reports, down from a projected $134.8 million expected before the COVID-19 pandemic took hold.

The coronavirus canceled concerts and other events that UW would have hosted between March and the end of the fiscal year. Distributions from the NCAA and Big Ten were lower than projected, according to UW, as were revenues from concessions and catering.

The department was able to trim operating expenses to $125.5 million, down from the budgeted $134.7 million. UW saved because of the early end to the competition season and salary reductions in place since May.

Work-Share extended

A Work-Share program through the Wisconsin Department of Workforce Development cut 350 UW Athletics employees’ hours by either 20% or 50% through July 25. An extension, this time for 231 employees, will run from July 26 to Oct. 25.

A voluntary 15% reduction in pay for the department’s 25 highest-earning employees will continue through October.

Spending on capital expenses funded by donations also was slashed to $7.4 million in 2019-20 from a budgeted sum of $22.65 million. UW attributed that to savings from projects completed or delayed.

Last week, the athletic department announced a one-year pause on a $77 million project to convert rows of bleachers to premium seating areas behind the south end zone of Camp Randall Stadium. The delay was attributed more to uncertainty about timing because of the coronavirus than to financial concerns.

Alvarez said he would be willing to listen to proposals to push the fall sports calendar, including football, to the spring. He said football coach Paul Chryst has been a resource on that topic because he once coached in a professional league that played in the spring.

Playing a spring season followed by a traditional fall season in 2021, however, doesn’t sound feasible, Alvarez said.

As COVID-19 cases increase in Wisconsin and around the country, Alvarez said he’s trying to stay positive while Badgers athletes go through testing and summer conditioning.

“I want them to have something to shoot for,” he said. “I’ll keep working and trying to figure out things and see if we can play in the fall until you get to an answer that you feel safe for your people.”


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