Editor’s note: this is the second in a five-part series on the coronavirus’ effect on college football in the state of Washington, featuring interviews with University of Washington athletic director Jen Cohen and Washington State athletic director Pat Chun.
Pat Chun called it “survival mode.”
Such is life, suddenly, for college athletic departments — including those at the University of Washington and Washington State. The unexpected arrival of COVID-19 swallowed up spring sports across the college landscape, leaving financial shortfalls and an uncertain future in its unprecedented wake. At UW, for example, the athletic department originally projected a surplus of $827,000 in the 2020 financial year (which ends on June 30). It currently anticipates a deficit of $548,000 — due in part to the loss of NCAA distributions ($2.1 million), Seattle Storm game revenue ($420,000), gate revenue for UW baseball and softball ($200,000) and a Windermere Cup sponsorship ($170,000).
To counter that conundrum, UW instituted a hiring freeze as well as “absolutely a massive reduction in spending,” athletic director Jen Cohen told The Times last week. “We basically halted all of our spending.”
Meanwhile, Chun is facing a similar predicament in Pullman.
“I always make the statement that we’re the most fiscally efficient athletic department in the country, and the numbers show what we’re able to do relative to our operating budget, relative to the rest of the Pac-12 and the country,” Chun, WSU’s third-year athletic director, said in a phone interview last Thursday. “So for us cuts are a little bit different because we operate lean anyways.
“If we’re more in survival mode this year, what can we do to survive? We know that some of the cuts we’re going to ask our coaches to make this year won’t be conducive for long-term success. But we all recognize that we’re stewards of this athletic department and we have a responsibility to our student-athletes and we need to deliver on it.”
Chun, Cohen and Co. are being depended on to deliver, even if an adjusted football season — think empty stadiums or fewer games — muddies the financial waters even further. That’s why Chun, football coach Nick Rolovich and men’s basketball coach Kyle Smith followed WSU president Kirk Schulz’s lead last month in taking voluntary 5% pay cuts through the end of the 2020-21 academic year.
“Just in casual conversations, specifically with Nick Rolovich and Kyle Smith, we talked through other schools doing it, why and understanding perhaps the importance from a financial standpoint, but also the symbolism that it would have if the three of us did it,” Chun said. “Once our president did it then it wasn’t really much of a conversation. It was more of, ‘Hey, this is what Kirk Schulz is doing.’ Kyle and Nick, the way they’re wired, it’s like, ‘All right, we’ll do the same.’”
Moreover, all of WSU’s coaches — as well as Schulz and Chun — agreed to forgo all performance-based bonuses and incentives in FY21 as well.
As for UW, the “best-case scenario” FY21 budget — which assumes a full football season with fan attendance — still calls for a 10% cut in the operating budget ($4.89 million) and a 5% overall salary reduction ($1.93 million) through voluntary cuts, a hiring freeze and a reduction in overtime and hourly work. Cohen said she has committed to a pay cut and conversations have been had with coaches about eventually following suit. Forfeiting performance-based bonuses is also “definitely an idea that could come to fruition in time.”
So much hinges, ultimately, on what the college football season looks like this fall. But, to supplement the significant financial uncertainty, UW plans to launch a “Huskies All In” fundraising campaign sometime in the next few months.
“The reality is that any dreams that we’ve had to grow and get better at the university have always started with donor and fan support,” Cohen said. “Our donor and fan support is exceptional and it’s what sets us apart from a lot of other institutions. Whenever we’ve had a dream to get better, we’ve gone to them and it’s happened and they’ve supported us and we’ve (launched new athletic) programs or we’ve been able to improve recruiting or hire a coach because of their support. So this is no different. The only difference is that everybody is personally impacted by this pandemic — financially, health-wise, personally, anxiety level. So we recognize that. We want to be really acknowledging the impact this is having on the lives of our fans and our supporters.
“But we also know how much this program means to them. So it’s an idea that was formulated because we know that there’s an expectation from our fans and our donors that we’re going to have an athletic program and that we are going to run it to the level that they’ve come accustomed to. So their support is going to be a big part of it.”
At this point, it’s unclear just how much support will be required. UW’s “best-case scenario” budget — which was presented to the university’s Board of Regents last week — projected a $1.6 million deficit in FY21, despite the aforementioned cost-saving measures. In said presentation, chief financial officer Kate Cullen stated that the athletic department’s reserves — which totaled $34.5 million in 2019 — “are adequate to cover our deficit in this best-case scenario budget.”
But what if the best-case scenario isn’t the one we end up with?
“Right now the way that that reserve fund is set up is that we have a requirement to save one year of debt service payment as part of our covenants with our loan for the (2012 renovation of) Husky Stadium. So that’s about $14.5 million (annually) that we’re supposed to keep in there,” Cohen explained. “So if we want to go beyond that, anything that goes below that threshold that we need to keep will be a conversation that we’d have to have with our folks on campus and treasury and finance and (UW president Ana Mari Cauce) and others.
“One of the things that we’re really proud of is the fact that we’ve been fiscally responsible and we’ve kept a fund like this for a rainy day that we didn’t expect to be this. So that’s what a reserve fund is for, right? It’s supposed to help you in an unusual time. 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.”
And it’s possible, of course, that some of the solutions will especially sting. Cohen said in her presentation to the Board of Regents that “obviously we will have to look at our staffing and additional changes that we need to make in salaries and benefits if we are in a situation where our revenues are not where we have them projected in this model. It’s everything you could imagine as far as cuts would go as a possibility.”
Even the unimaginable. This spring, the University of Cincinnati cut its men’s soccer program, while Old Dominion dropped wrestling, as a cost-saving response to COVID-19. On Monday, Furman University announced that it is discontinuing its baseball and men’s lacrosse programs as well.
So, in the worst-case scenario — namely, the continued widespread cancellation of college sports — would UW or WSU have to consider cutting athletic programs?
“Any scenario possible heading into next year we’ve looked at and modeled,” Chun said. “Right now, on May 14, it’s a hair too early to decide what fall is going to look like, just because there’s no certainty with fall. But we’re probably going to have to make … like I said, we’ve modeled a bunch of things. We’ve modeled different cuts and how we schedule a little bit differently for some of our Olympic sports.
“So any possible scenario in which we can cut expenses, we’ve looked at. How deep we need to go, that’s the to-be-determined that we’ll work with our campus to figure out.”
Added Cohen: “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. The thing that makes us so special is the diverse number of sports and student-athletes that we have and how good they are — how high-quality they are in their sports and in the classrooms. So we’ll fight like hell.
“That’s why that ‘All In’ campaign is so important to me. I’m so passionate about it, because our fan base loves our programs. They love our rowing programs and our national championship volleyball program and our national championship softball program. This community loves these teams, and an athletic program is so much better with that kind of diversity of student-athletes and programs. So we’re going to fight to save our athletic department and our programs every step of the way.”