These are pretty scary times, and emotionally devastating times if you are a sports fan. The novel coronavirus pandemic has forced many to quarantine within their homes, and most businesses have shut down in some capacity. Sports businesses haven’t been excluded – the NBA and NHL have postponed, March Madness has been cancelled and the NCAA has cancelled all spring athletics.
While having no sports is an absolute tragedy, one of the lingering effects of these cancellations is the economic impact. In this article we’ll detail how the COVID-19 cancellations might affect your athletic department’s budget.
NCAA Disbursements
The NCAA provides financial disbursements from March Madness that help schools cover their costs of operation. These payments are typically in the hundreds of thousands of dollars, but are often millions of dollars for larger programs. The NCAA has said they will attempt to provide some form of compensatory payment to programs, but obviously this won’t be the full payment since all of the income from the tournament itself has been lost. So, will schools be left hanging out to dry?
The good news is, probably not. For a majority of schools, their main breadwinner is football. There haven’t been any announcements about postponing college football, so for these programs, they don’t have much to worry about. Budgets will certainly have to be adjusted to make up for the loss, but schools should end up fine. Even for schools that make most of their money from basketball, most of that money has already come in through ticket sales and merchandising throughout the regular season. If college football is postponed, then the majority of programs will have reason to seriously worry.
What About Spring Sports?
Spring brings some of the most fun sports for schools. Baseball, softball and lacrosse are some of the most watched non-revenue events in the NCAA. But therein lies the point; these sports are generally non-revenue, and at best do a little more than break even. The NCAA model is to make the bulk of money off of football and basketball (and believe it or not, wrestling has become a revenue generating sport) and use that money to support the others. So, while we’ll be devastated to not watch baseball teams duke it out in Omaha this summer, the actual bottom line of athletic departments won’t be hurt. In fact, it might even be helped since the schools won’t be on the hook for athlete’s travel.
Going Forward
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While the novel coronavirus pandemic has had widespread effects and will certainly change how we view the sporting world forever, I don’t expect any major changes to happen to how athletic departments structure their budgets. The only thing I could see happening is schools doing more to prepare for the event in which they can’t run a football season, but surely a widespread bailout would be needed for all football schools. Thus, that would be a larger institutional change rather than on individual athletic departments.
Show some love to an athlete that lost their season, continue to support your school, but your athletic department should ultimately be fine. Thankfully, we have much more sports to look forward to – the important thing to do right now is to be safe.
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