How much $ will the U lose due to Covid-19?

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Probably a lot more.

The U has spent $3.4 billion to $3.75 billion in the past few years so if they lose 16% of revenue like TCU, that would be $550 million to $600 million.

Tuition and fees only make up about 21% of the U's revenue so even if there is a drop in enrollment of 10-20%, that would only be 2-4% less revenue. 45% of revenue comes from the state, federal government, grants, and contracts. I would assume that's the most at risk because there's less money to give out and the U has had to fight hard for what they've gotten in previous years even with a better financial situation. Another 11% comes from nonoperating grants and gifts which is likely also at risk for similar reasons.

Football alone brought in $63 million last year. $34 million of it was for media rights which I would guess they will still get at least part of being that most of the contracts are for many years and won't decrease without games being played.

Overall, the U will probably be well above $90 million in lost revenue with the potential to be many times higher. The state funding, grants, and gifts portion is probably going to have the biggest impact and could continue on for years.
 

California municipalities, school districts, universities, governor are all expecting a federal rescue and other temporary lending mechanisms which will probably come to pass at least in part to help prevent total collapse. I do see some issues with high school and university athletics getting any trickle down monies unless Uncle Sam is very generous. Austerity and shutdown may be a thing. Coyle will be earning his paycheck for awhile.
 



Also, already lost NCAA March Madness money. Wasn't that a $10 million neighborhood hit?
Volleyball, I'm guessing is a revenue sport for us, as well.
It's ugly, whatever the number.
Calculated the same way as TCU our number would be much higher. BIG schools are the envy of other schools in conference payout revenue. We take a greater hit in lost conference money than they would.
 
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$62,731,034.75, plus or minus a couple of thousand. I know a guy, who knows a guy.......
 




Pompous Elitist said:
California municipalities, school districts, universities, governor are all expecting a federal rescue and other temporary lending mechanisms which will probably come to pass at least in part to help prevent total collapse. I do see some issues with high school and university athletics getting any trickle down monies unless Uncle Sam is very generous. Austerity and shutdown may be a thing. Coyle will be earning his paycheck for awhile.
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As will every superintendent in the country.

the new state budget for 2021-22 will have a huge shortfall. The place to cut is k-12 education because it is a huge part of the state budget.

universities are going to have large decisions to make about how to stay financially afloat in 2021.
This will hit public schools really hard in 2022 IMO
 

Some guy said:
As will every superintendent in the country.

the new state budget for 2021-22 will have a huge shortfall. The place to cut is k-12 education because it is a huge part of the state budget.

universities are going to have large decisions to make about how to stay financially afloat in 2021.
This will hit public schools really hard in 2022 IMO
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All we have to do is look at the rising cost in total cost in tuition and fees to see there is a huge discrepancy, vs inflation. This mirrors the cost of health care in some ways? Why? Multifaceted issues. The U for example had one of the highest ratios of administrative staff to faculty in the nation just a few years ago IIRC. I suspect that hasn’t changed drastically. Layers of high level managers, redundant missions, expensive state and federal mandates; legal counsel to keep the sharks at bay.

Like healthcare, efforts to reform higher education (or any level of education) may hit a wall because so many depend on it for their livelihoods. Schools have become self-perpetuating businesses that respond to any fiscal crisis by threatening to cut faculty. The students...caught in the middle of all of it with heads spinning. They need that expensive piece of paper. Not sure it has near the same value without the campus networking and off campus internship experiences. Information itself is widely available...

The path of least resistance is predictable.
 


dlw4gophers said:
The # thrown around earlier was $75 million
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The $75M figure was the early estimate for the athletic department's revenue loss at the U in what was then described as scenario 3 (i.e. no athletic competition for the 2020-21 academic year). The article on TCU is referring to losses to the school's overall operating budget.
 



The school doesn’t “make money” on athletics. They spend everything they make, and then a bit more.

They might not be taking anything in this year, but they’ll be spending quite a bit less.
 


MplsGopher said:
The school doesn’t “make money” on athletics. They spend everything they make, and then a bit more.

They might not be taking anything in this year, but they’ll be spending quite a bit less.
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The University of Minnesota strives to break even in athletics. My understanding is that they were on pace for a small profit last year prior to the shutdown. They will save on travel related expenses and game day expenses if there are no athletics this year, but other large expenses items, most notably scholarships and salaries, will largely be unchanged. (I know that there have been some voluntary salary reductions and efforts to reduce expenses by instituting a hiring freeze. I am sure there have been/will be some layoffs as well.)

While the majority of expenses are fixed, the loss of television revenue, ticket revenue (plus associated donations) and sponsorship revenue results in net losses projected this past spring at up to $75M. I expect that these numbers have been refined some since the spring, but I haven't seen updated projections.
 

2nd Degree Gopher said:
The University of Minnesota strives to break even in athletics. My understanding is that they were on pace for a small profit last year prior to the shutdown. They will save on travel related expenses and game day expenses if there are no athletics this year, but other large expenses items, most notably scholarships and salaries, will largely be unchanged. (I know that there have been some voluntary salary reductions and efforts to reduce expenses by instituting a hiring freeze. I am sure there have been/will be some layoffs as well.)

While the majority of expenses are fixed, the loss of television revenue, ticket revenue (plus associated donations) and sponsorship revenue results in net losses projected this past spring at up to $75M. I expect that these numbers have been refined some since the spring, but I haven't seen updated projections.
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Those are revenue losses. Maybe it is the case that salaries, scholarships, and debt service (sunk costs) are still a vast majority of the expenses, but I will be curious to know how the athletic year will be accounted. Maybe there will be some hand waiving.
 


Definitely not a business owner.

"Don't worry, insurance will pay for it......"
 

FireDaveLee said:
Definitely not a business owner.

"Don't worry, insurance will pay for it......"
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Not sure if you’re talking to me, but as I actually said — and am 100% correct — if my home had been burned down because of civil unrest, my homeowners insurance would pay for it to be rebuilt. Which would’ve been just fine, because it’s old.

I read with sadness recently in the STrib about business owners who could not afford the proper coverage and so won’t be (fully) covered.

But then I became very happy, grinning ear to ear, when I realized that your tax dollars will be going to these business owners to help them rebuild.

Good. Correct.
 

MplsGopher said:
Those are revenue losses. Maybe it is the case that salaries, scholarships, and debt service (sunk costs) are still a vast majority of the expenses, but I will be curious to know how the athletic year will be accounted. Maybe there will be some hand waiving.
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Maybe I am missing the joke, and I don't know what you mean by "hand waiving," but revenues for 2019 included media rights ($44M, all numbers rounded for simplicity and taken from the EADA report on the University website); tickets ($20M); donations ($18M); conference distributions including bowls ($9.5M) and NCAA distributions ($5.5M); licensing ($9.5M) and parking/concessions/ programs, etc ($3.5M). That's approximately $110M in revenues that is going to be reduced to what, maybe a few million dollars in media rights, donations and some portion of the licensing revenue?

Expenses, on the other hand, include coaching salaries ($22M); support staff ($21M); scholarships ($14M); overhead and facility maintenance ($17.5M); and debt service ($12M). That's roughly $86.5M in expenses that aren't going away, save possible voluntary salary reductions and some staff cuts. They will not have to pay for travel ($8M); guarantees to opponents ($3M); and will save on game day expenses ($4.5M), but the vast majority of their expenses are, as you say, sunk costs.

Will there be creative budgeting and accounting to try to ease the pain? I am sure. Will there be an effort to ramp up donations to try to save sports, fund scholarships and stave off disaster? Yes, but there is no "hand waiving" that will fill the hole in that budget.
 

Man did we have a deadline on season tickets about what we wanted to do?

I'm kinda considering the donation options.... that should offset their expenses a bit ;)
 

A_Slab_of_Bacon said:
Man did we have a deadline on season tickets about what we wanted to do?

I'm kinda considering the donation options.... that should offset their expenses a bit ;)
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No deadline, but you should give them a call, you sound like the kind of person they'd like to talk to ASAP. :)
 


2nd Degree Gopher said:
Maybe I am missing the joke, and I don't know what you mean by "hand waiving," but revenues for 2019 included media rights ($44M, all numbers rounded for simplicity and taken from the EADA report on the University website); tickets ($20M); donations ($18M); conference distributions including bowls ($9.5M) and NCAA distributions ($5.5M); licensing ($9.5M) and parking/concessions/ programs, etc ($3.5M). That's approximately $110M in revenues that is going to be reduced to what, maybe a few million dollars in media rights, donations and some portion of the licensing revenue?

Expenses, on the other hand, include coaching salaries ($22M); support staff ($21M); scholarships ($14M); overhead and facility maintenance ($17.5M); and debt service ($12M). That's roughly $86.5M in expenses that aren't going away, save possible voluntary salary reductions and some staff cuts. They will not have to pay for travel ($8M); guarantees to opponents ($3M); and will save on game day expenses ($4.5M), but the vast majority of their expenses are, as you say, sunk costs.

Will there be creative budgeting and accounting to try to ease the pain? I am sure. Will there be an effort to ramp up donations to try to save sports, fund scholarships and stave off disaster? Yes, but there is no "hand waiving" that will fill the hole in that budget.
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Most of those revenues you list outside of ticket sales are in fact a single distribution from the Big Ten. For example, the U most definitely does not have contracts with ESPN, etc. that generated $44M. That is largely coming from the Big Ten’s football TV deal with ESPN/FOX and the CFP’s TV deal with ESPN.

Time will tell what, if anything, the Big Ten will ultimately collect from either source, this athletic/fiscal year, and then distribute to the members.


“Support staff” cost $21M??? That’s 210 people making $100k year. Obviously Coyle is in there probably making a Mil. But that still smells fishy as hell. Maybe it was a typo and should be $2.1M? That seems like it could be well trimmed back.

It costs $17M to maintain the facilities?? That also seems absurd. “Overhead” what does that mean?

If we’re not even going to use a facility for games, then turn the lights off and turn down the HVAC to minimal levels. Lock the doors. I can’t see how even the largest would cost more than $100k.


“Hand waiving” is what accountants are paid to do: make fishy looking balance sheets appear to be on the up and up.
 
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2nd Degree Gopher said:
Maybe I am missing the joke, and I don't know what you mean by "hand waiving," but revenues for 2019 included media rights ($44M, all numbers rounded for simplicity and taken from the EADA report on the University website); tickets ($20M); donations ($18M); conference distributions including bowls ($9.5M) and NCAA distributions ($5.5M); licensing ($9.5M) and parking/concessions/ programs, etc ($3.5M). That's approximately $110M in revenues that is going to be reduced to what, maybe a few million dollars in media rights, donations and some portion of the licensing revenue?

Expenses, on the other hand, include coaching salaries ($22M); support staff ($21M); scholarships ($14M); overhead and facility maintenance ($17.5M); and debt service ($12M). That's roughly $86.5M in expenses that aren't going away, save possible voluntary salary reductions and some staff cuts. They will not have to pay for travel ($8M); guarantees to opponents ($3M); and will save on game day expenses ($4.5M), but the vast majority of their expenses are, as you say, sunk costs.

Will there be creative budgeting and accounting to try to ease the pain? I am sure. Will there be an effort to ramp up donations to try to save sports, fund scholarships and stave off disaster? Yes, but there is no "hand waiving" that will fill the hole in that budget.
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Plenty of donors are severely affected financially by Covid. One is a prominent resort owner, another owns a travel agency. They are cutting back. Several basketball boosters are reducing their annual gift as a result of poor performance. Athletic departments are in big trouble. Hell, in a great year we make a million dollars at the U on athletics. This is not Texas AM where they can count on 60-80 million per year in donations. Very few schools are making huge money, most are not making any.
 

Again, “making money” isn’t a thing in college athletics.

Not any more than Coffman Union is a “money making” venture.

It’s a nice to have thing, to enhance the student experience.
 

Oh, “hand waving.” Look, they aren’t my numbers, if you don’t like them I’d suggest you review them yourself. You won’t get me to disagree that there is bloat in an athletic department budget, but if you’re suggesting this isn’t a huge problem, you’re mistaken. You obviously have no idea what it costs to run the department, and that’s fine, but don’t throw out numbers with no factual basis behind them and minimize the budgetary crisis facing the University‘s Athletic Department.
 

2nd Degree Gopher said:
Oh, “hand waving.” Look, they aren’t my numbers, if you don’t like them I’d suggest you review them yourself. You won’t get me to disagree that there is bloat in an athletic department budget, but if you’re suggesting this isn’t a huge problem, you’re mistaken. You obviously have no idea what it costs to run the department, and that’s fine, but don’t throw out numbers with no factual basis behind them and minimize the budgetary crisis facing the University‘s Athletic Department.
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Relax. I never claimed that revenues wouldn’t be much lower than in normal years.

I just don’t think it’s that big of a deal, for one year, when nothing fundamental underlining it is going away. The demand for it is still there, and will be, exactly the same.

No need to fret that college athletics might evaporate into thin air. Not that you were, just saying.

Compared to the U of Minn’s total budget (all campuses), even a $50M write off for one year is nothing.
 

MplsGopher said:
Relax. I never claimed that revenues wouldn’t be much lower than in normal years.

I just don’t think it’s that big of a deal, for one year, when nothing fundamental underlining it is going away. The demand for it is still there, and will be, exactly the same.

No need to fret that college athletics might evaporate into thin air. Not that you were, just saying.

Compared to the U of Minn’s total budget (all campuses), even a $50M write off for one year is nothing.
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They can't just write it off and make it disappear. They need to pay people in cash.

No, it's not going to shut down the athletic department but it's a big deal. Things will go back to normal, if not better, when this is all over with but they need cash now to pay for bills now. Cash flow is a much bigger issue than profit/loss.

If everything else was normal, it would be pretty easy to cover the expenses with cash from the rest of the U of M. I'm sure they'll still find a way to do it but it's going to be much harder because the rest of the U will likely be facing the same problem. They'll find the cash but the cash will have to come from somewhere.
 

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