Pac-12 commissioner Larry Scott has maintained for months that decision-making as it relates to the COVID-19 pandemic will be done based on science on data.
The league took the advice of the Pac-12 Medical Advisory Board when it decided on Aug. 11 to postpone all sports until at least Jan. 1. It cited an improved outlook on Sept. 24 when announcing it would press forward with a seven-game regular season.
In between listening to the doctors, the decision to play football in the fall had to be, on some level, based on money. The very core of that thinking is based on what athletic departments across the Pac-12 are dealing with.
Utah athletic director Mark Harlan has projected an operating-budget deficit between $50-60 million. Oregon is reportedly looking at between $50-80 million. Washington, $70 million. Arizona, $60-65 million, and all through the Pac-12, similar figures are being tossed around.
Playing football, appearing on television, and satisfying the parameters of media rights agreements will help alleviate the budget deficits.
To say money did not play any role in the Pac-12′s decision to play football this fall can be construed as disingenuous, but that is what Oregon president Michael Schill wants people to believe.
“Let me just say one thing it was not about,” Schill said on a Sept. 24 Zoom call put on by the Pac-12, which included Scott, Arizona State athletic director Ray Anderson, and Oregon State’s Dr. Doug Aukerman. “The media sometimes talks about, or social media sometimes talks about that the conference is doing things because of money. This has nothing to do with money. It was never once mentioned as a consideration.”
Before Schill made that unprompted statement, he spoke of how the presidents and chancellors had a robust discussion earlier that afternoon about the pros and cons of playing football in the fall vs. starting in January, with the consensus ultimately siding with the former.
With the rest of the Power Five already playing (ACC, Big 12, SEC) or planning to play in the fall (Big Ten), the Pac-12 had little choice but to play in the fall. The Pac-12 receives $66 million annually in College Football Playoff money, plus $6 million if a team plays in a CFP semifinal, and $4 million if anyone plays in New Year’s Six bowl.
With everyone else of consequence playing in the fall, those types of financial opportunities were unlikely to exist with a winter start. Science and data may have steered the decision-making, but financial matters were not merely cast aside.
In the wake of Harlan’s projection, he has instituted an athletic department-wide furlough system, while layoffs have also occurred in his department. While that furlough system will be altered with football being played, Harlan was clear on a Sept. 25 Zoom call that furloughs will continue in an effort to stay the course and remain within his projected budget.
Harlan, like Scott, has been a loud supporter of science, data and listening to doctors as he has shepherded Utah through the pandemic. On that Zoom call, Harlan remained adamant that the Pac-12 doctors, not to mention the lack of adequate testing, drove the decision to postpone last month. He also noted that the doctors restating their position, plus the Quidel deal, helped bring football back.
Harlan did not harp on money, but he is not naive, so in between all that, he was at least willing to indicate what Schill wouldn’t. The economics of a Power Five athletic department are directly dependent upon playing football.
“We know we’re still dealing with significant financial challenges despite yesterday’s announcement, but obviously, we have a chance to have more revenue than maybe we would have thought a few weeks ago,” Harlan said. “Certainly, depending on how many games are played throughout this ’20 season, we’ll know at the end how much revenue that brings in from a television standpoint. There’s a contractual amount of games that goes into that, so we’ll wait and see when the dust clears how many games we get in.”
Harlan said Sept. 11 on an in-house podcast that his operating budget has been brought down to a point where the athletic department can work with central campus to obtain a loan to get through the rest of the fiscal year. With football coming back, it is unclear if the athletic department will still seek the loan, but there is a lot of traditional revenue that will not be made up.
For fiscal 2019, which included the 2018 football season, almost 25% of football-related revenue was tied to ticket sales. There will be no fans allowed at Pac-12 games this fall, a byproduct of the pandemic.
Whether or not the Pac-12 and its members can satisfy its media partners by playing enough games remains to be seen, but that payout to the athletic department accounts for roughly $30 million in a normal year.
Schill’s athletic department is in worse shape, with a projected deficit reportedly reaching towards $80 million. In fiscal 2019, Oregon football raked in nearly $20 million in ticket sales, another $20 million in media rights, and roughly $16 million in donations.
“We didn’t say back then, ‘We’re going to lose $60 million, we can’t do this,’” Harlan said. “It was straight up from the medical recommendations to the ADs and the coaches, the presidents and chancellors. A byproduct of that, of course, is that we can now put our games on television that will allow some revenue to come into the organization.”
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