In a presentation to the University of Washington’s Board of Regents on May 13, Athletic Director Jen Cohen unveiled what she and chief financial officer Kate Cullen dubbed “our very best-case scenario” budget for the 2021 financial year.

Two months earlier, the athletics department’s spring sports seasons had been abruptly canceled — unexpectedly upended by the COVID-19 pandemic. The national champion UW women’s rowing team was suddenly unable to defend its title. The Husky softball team, with a 23-2 record and a No. 2 national ranking, halted days before the beginning of Pac-12 play.

But Cohen and Cullen were hopeful that the very-best-case scenario — namely, a full fall sports season with unrestricted fan attendance — would help to balance the books.

And even in that scenario, UW’s total revenue was expected to fall more than $7 million short of previous projections — due in part to a 10-12% drop ($4.4 million) in anticipated gate revenue, as well as $2.5 million less in athletic department contributions. After “deficit mitigation plans,” Cohen and Cullen projected a fiscal year 2021 deficit of $1.6 million.

That was the best-case scenario. But it wasn’t the only one.

 “The range of [financial] impact that we could find ourselves in is [between] kind of manageable to devastating,” Cohen acknowledged on May 13. “The severity of the mitigation strategies we’d have to implement really depends on which scenario we end up with.”

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Exactly three months later, Washington is sailing straight into the worst-case scenario — after the Pac-12 Conference postponed all fall sports competitions, including football, this week.

Consider that in FY19 — the most recent full financial year unaffected by COVID-19 — UW reported $133.8 million in athletics revenue (and $106.9 million in team-specific revenue), $84 million of which was generated by the football program. That $84 million can largely be attributed to ticket sales ($25.3 million), media rights ($20.2 million) and contributions ($19.8 million), according to a revenue report provided by UW Athletics.

Despite the cancellation of spring sports due to COVID-19, UW athletic revenue rose to $137.7 million in FY20, per Cohen and Cullen’s presentation to the board of regents.

A canceled football season would amount to a seismic financial blow to the University of Washington. But “canceled,” at least for now, isn’t the correct term. In collegiate athletics, each fiscal year runs from July 1 to June 30. So if UW were to play a Pac-12 football season in the spring, any generated revenue would count toward the same financial year as a typical fall season. The problem, in this case, is that UW almost certainly wouldn’t play a full 12 games, and it’s unclear how many — if any — fans would be permitted to attend. Pac-12 commissioner Larry Scott even acknowledged on Tuesday that a spring season may not be feasible, considering each program is playing another full slate the following fall.

All things considered, the financial impact of a postponed fall season will be devastating by any measure. The iceberg is unavoidable. And UW has already begun to employ “deficit mitigation strategies” to stop the ship from sinking altogether.

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Specifically, the athletics department announced last month that it will implement a 15% reduction in its operating budget (roughly $8.5 million), and a 10% salary reduction for staff (roughly $5 million) in FY21.

And Cohen acknowledged in a phone interview last Thursday — before UW’s fall seasons were scrapped — that there will still be more to come.

“We’re still working through it,” she said. “We took action on the 15% ops cuts and 10% salary cuts, and we’ll continue to do even more operational and potential other things in our salaries to save funds. But it’s still too early to tell which [financial] scenario we’re going to be living in and the range and the impact. But it certainly continues to be even more challenging every day, especially because we want to support our students.

“That’s the thing. We’re committing to scholarships. That’s a significant line item. When we’re committing to medical care, academic support, all that stuff is extraordinarily expensive without anything that comes in to support it. That’s why our fans and our donors are so important to us, because we wouldn’t be able to offer those services or recover as a department if we don’t have that kind of support down the road.”

So, speaking of fans and donors: The Huskies will certainly be asking them for their help. According to Cohen’s presentation in May, UW had already sold 87.2% of its football season tickets ($21 million) for the 2020 season. If a spring season with fan attendance doesn’t ultimately come to pass, UW will likely ask season ticketholders to allow the athletics department to keep their payment as a gift, or apply it to the 2021 season and beyond as a credit. (while obviously also offering complete refunds).

At some point, they’ll also launch a more comprehensive fundraising campaign that Cohen has referred to as “Huskies All In.”

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“We’ve actually been quietly raising money in the department, because we raise money all the time in the department,” Cohen said last week. “We can’t survive without ongoing fundraising. So we’ve been fortunate to have donors that care, that have been making gifts and trying to help us through this time. But we really need a broad-based approach to this. And we have formulated a plan around it and we know how we want to support our students during this time.

“… They want to know what’s going on. We understand that with our fans and supporters. We understand that from a ticketholder standpoint. I think all that plays into our strategy and our ask with our fan base and our donors. I think we need to have a better feel, all of us, together, how are we going to recover as an athletic department? How are we going to be better and stronger as an athletic department from this? How does this support help us get there? And I also think we need to keep making tough decisions here before we ask other people to give to us.”  

At this point, tough decisions are inevitable — and the toughest decision surrounds the possibility of dropping athletics programs. Back in May, Cohen said that “I think everything is on the table for how we would mitigate a devastating loss, which would be no football season and/or some sort of expectation where you still have to operate some portion of your program and still provide opportunities for students but wouldn’t have a revenue sport funding it. That being said, [cutting sports] is not something that we’re talking about right now.

“There’s other ways you can look at it. You can look at shortened seasons. I think some people may look at suspension of programs versus dropping programs. It’s so counter to who we are.”

And to help its programs avoid that fate, The Bay Area News Group reported last week that the Pac-12 is planning a hefty loan program that would provide a maximum of $83 million for each university at a rate of 3.75% over 10 years. When asked last week if such a loan is an option for UW, Cohen responded that “we have so much debt already. So more debt would be likely the absolutely last resort.

“I think we have other levers that we need to pull. If we’re unable to play football, we’re going to have to cut expenses again. We’re going to have to keep cutting expenses, but we’re going to have to still honor supporting our student-athletes.”

One of those levers is UW’s athletics reserves, which totaled $34.5 million in 2019. But Cohen noted in May that UW is required to maintain roughly $14.5 million in its reserves fund at all times, amounting to one year of its annual debt service payment on the loan that financed the 2012 renovation of Husky Stadium. She added that “the use of that fund and how much will get used is going to be determined by the impact and the scenario. It will be one of many levers to pull for a solution. It’s not going to be the only solution.”

As it hurtles toward an equally unexpected and unwelcome iceberg, UW’s athletics department is going to need numerous solutions in order to stay afloat.