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CU Buffs athletics projecting nearly $20 million deficit

Harry-Meghan




- Data Covid-19 USA — 

Colorado’s ath­let­ics depart­ment is pro­ject­ing a drop of about $43 in rev­enue from last year, while fore­cast­ing a deficit of near­ly $20 mil­lion for the 2021 fis­cal year.

A sur­plus from the 2020 fis­cal year and play­ing a par­tial foot­ball sea­son in the fall has kept those num­bers from being much larg­er, how­ev­er, as CU and oth­er ath­let­ic depart­ments around the coun­try con­tin­ue to nav­i­gate the impact of the pandemic.

CU closed the 2020 fis­cal year last sum­mer with $89.987 mil­lion in rev­enue and $86.291 mil­lion in expens­es. The chal­lenges of the pan­dem­ic have led to CU’s bud­get remain­ing flu­id through­out the 2021 fis­cal year, which began in July. CU is cur­rent­ly bud­get­ing for $65 mil­lion in expens­es and $46–47 mil­lion in revenue.

Most of CU’s year-over-year rev­enue drop can be attrib­uted to tick­et sales and con­fer­ence dis­tri­b­u­tion. Between foot­ball and men’s bas­ket­ball, CU had $23.25 mil­lion in tick­et rev­enue for 2019–20, but hasn’t been able to host fans this year. In addi­tion, ath­let­ic direc­tor Rick George said the Pac-12 dis­tri­b­u­tion this year could be 50–60 per­cent of the $32.6 mil­lion CU got last year.

“That gets your rev­enue down sig­nif­i­cant­ly, just in those two num­bers; there’s $40 mil­lion,” George said. “But, we’ve done a good job in the oth­er areas. Our fundrais­ing is going real­ly well, and our part­ner­ship with Nike and Learfield IMG for Buf­fa­lo Sports Prop­er­ties for mul­ti­me­dia rights has been good and sol­id. So we’re hang­ing in there.”

CU’s cur­rent bud­get of $46–47 mil­lion in rev­enue includes pro­ject­ed rev­enue from the NCAA bas­ket­ball tour­na­ment. Should COVID-19 cause a can­cel­la­tion of the NCAA Tour­na­ment, as it did in 2020, CU’s rev­enue would drop by anoth­er $1 mil­lion or more.

Even in a best case sce­nario, how­ev­er, CU is brac­ing for a net loss of near­ly $20 mil­lion for the 2021 fis­cal year.

CU will uti­lize the loan pro­gram being set up by the Pac-12 for COVID-19 relief.

Cory Hilliard, CU’s senior asso­ciate ath­let­ic direc­tor of oper­a­tions, said the repay­ment plan has yet to be deter­mined, but it would be lever­aged against future con­fer­ence dis­tri­b­u­tion. He said CU would like­ly bor­row $20–25 mil­lion this year, but will also look to mit­i­gate costs through cash reserves and donations.

“We’ll only bor­row what we need,” Hilliard said. “How­ev­er, we’re not going to put our­selves in a posi­tion where in 2022 we run into anoth­er unex­pect­ed hic­cup and need addi­tion­al cash.”

CU fin­ished the 2020 fis­cal year with a designed sur­plus of $3.67 mil­lion, most of which is attrib­uted to the buy­out of for­mer head foot­ball coach Mike Mac­In­tyre, who was fired with game to play in the 2018 season.

For account­ing pur­pos­es, all of MacIntyre’s $7.238 mil­lion buy­out was attrib­uted to the 2019 fis­cal year, lead­ing to a $3.696 mil­lion deficit that year. In turn, it led to a sur­plus in 2020.

The final quar­ter of the 2020 fis­cal year was impact­ed by the start of the COVID-19 pan­dem­ic, caus­ing CU to lose out on rough­ly $1.5 mil­lion when the NCAA bas­ket­ball tour­na­ment was can­celed and hav­ing a low­er amount from Pac-12 distribution.

CU’s bot­tom line in FY20 was helped, how­ev­er, by for­mer head coach Mel Tuck­er bolt­ing for Michi­gan State in Feb­ru­ary. Tuck­er had to pay CU $3 mil­lion for ter­mi­nat­ing his deal ear­ly. CU also saved mon­ey dur­ing the final quar­ter of FY20 when sports were can­celed, because it elim­i­nat­ed some trav­el, recruit­ing and game oper­a­tion costs.

In prepar­ing for a dif­fi­cult 2021 fis­cal year, CU cut expens­es with lay­offs and fur­loughs, as well as salary reduc­tions for some coach­es and admin­is­tra­tors. The Buffs also elim­i­nat­ed some expens­es asso­ci­at­ed with team trav­el, recruit­ing and game operations.

At the start of the fis­cal year, CU had a bud­get of $72.6 mil­lion, based on a pos­si­ble 10-game foot­ball sea­son – with the hope of being able to sell some tick­ets and col­lect ancil­lary rev­enue through con­ces­sions, park­ing, etc.

CU’s bud­get has remained flu­id, how­ev­er, and was mod­i­fied when the Pac-12 set­tled on a short­ened, sev­en-week foot­ball sea­son with­out fans.

“Play­ing foot­ball was help­ful and bas­ket­ball sea­son is going along,” George said.

He added that the bud­get remains flu­id, because, “We real­ly don’t know where bas­ket­ball is going to end and what’s going to be the NCAA dis­tri­b­u­tion, and how many games we are going to play.”

While foot­ball was played, each Pac-12 game that was can­celed cost the con­fer­ence about $5 mil­lion in lost TV rev­enue (about $416,000 per team). The con­fer­ence lost 10 games in all, cut­ting out rough­ly $4.1 mil­lion in rev­enue for each team.

CU will make a small prof­it from play­ing in the Valero Alamo Bowl, how­ev­er. Hilliard said CU received a dis­tri­b­u­tion share of about $900,000 for play­ing the game and once expens­es are final­ized, “I expect that we’ll net some­where around $100,000.”

A new expense this year has come from COVID-19 test­ing. Hilliard said that by the end of the school year, the cost to CU for rou­tine­ly test­ing stu­dent-ath­letes, coach­es and staff will be “$1 mil­lion-plus, easy.”

That was a nec­es­sary expense, how­ev­er, because with­out it, there would not have been any foot­ball, bas­ket­ball or oth­er sports competitions.

“We had to spend that mil­lion dol­lars to make $45 mil­lion, if you look at it that way,” he said.

As the Buffs look to the future, uncer­tain­ty remains, because the COVID-19 pan­dem­ic con­tin­ues and it’s unclear how many games will be played in 2021–22 and how many fans, if any, would be allowed to attend.

“The next year is the big­ger unknown,” Hilliard said. “That’s where I think we need to be hon­est with our­selves about, you know, this thing’s not over.”

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