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MAC Financial Issues and Flexibility - COVID19 Fallout


BrooklynBull

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The MAC along with The American Athletic Conference, the Mountain West,  Sun Belt and Conference USA have petitioned the NCAA for flexibility in sport, sponsorship football attendance and football scheduling for four years because of financial distress as a result of COVID19 pandemic.

https://www.nytimes.com/2020/04/15/sports/conferences-petition-ncaa-seeking-to-cut-sports.html

 

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1 hour ago, BrooklynBull said:

The MAC along with The American Athletic Conference, the Mountain West,  Sun Belt and Conference USA have petitioned the NCAA for flexibility in sport, sponsorship football attendance and football scheduling for four years because of financial distress as a result of COVID19 pandemic.

https://www.nytimes.com/2020/04/15/sports/conferences-petition-ncaa-seeking-to-cut-sports.html

 

Based on the article, it sounds as if the schools just want to cut more programs. Only football and basketball matter evidently.

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https://archive.is/ztTGE

I agree. I wonder what would be next. Tennis? Wrestling?

The MAC is in a somewhat good position because we aren't shuttling volleyball and soccer teams halfway across the US like a lot of the other G5 programs (and WVU) have to do. The MAC has the smallest geographic footprint of any FBS conference. But we don't have a ton of revenue either.

 

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6 minutes ago, rma said:

... The MAC is in a somewhat good position because we aren't shuttling volleyball and soccer teams halfway across the US like a lot of the other G5 programs... 

Not just financially, but a smaller footprint is also good from the point that you don’t need to wait for all corners of the country to open back up.  Minimizing potential exposure, and transmission.   
(apologies if this was already said.., I haven’t read the link)

 

 

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11 minutes ago, 121Merrimac said:

Not just financially, but a smaller footprint is also good from the point that you don’t need to wait for all corners of the country to open back up.  Minimizing potential exposure, and transmission.   
(apologies if this was already said.., I haven’t read the link)

All full-member MAC schools, except Buffalo, are located in states that are coordinating efforts for reopening. AAC is at a huge disadvantage for that. Not that I think sports competitions will open for certain parts of the country and not others, but I could see practices/training starting on different schedules unless the NCAA steps in.

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https://www.uakron.edu/president/news-and-messages/redesigning-our-university

20% cut to athletics at Akron. Current sports offered at Akron:

Men: Baseball, Basketball, Cross County, Football (debatable), Golf, Rifle, Soccer, Track and Field

Women: Basketball, Cross Country, Golf, Lacrosse, Rifle, Soccer, Softball, Swimming & Diving, Tennis, Track & Field, Volleyball

Have to think some of these are on the chopping block. Baseball and Lacrosse had their first seasons this year. Rifle is not sponsored by the MAC.

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On 4/16/2020 at 9:00 PM, rma said:

All full-member MAC schools, except Buffalo, are located in states that are coordinating efforts for reopening. AAC is at a huge disadvantage for that. Not that I think sports competitions will open for certain parts of the country and not others, but I could see practices/training starting on different schedules unless the NCAA steps in.

New York is coordinating reopening with other states.

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I can't find the post, but a little while back (maybe it was longer) I mentioned that I felt the group of 5 schools in football are in trouble (or G6 if you want to be nice to the AAC...after all, their football TV revenue is so much larger than the MAC).  I said that, in a few years, there will be a reckoning since academia is a bubble that will eventually burst.  After all, you have:

  • A shrinking (percentage-wise) of state appropriation towards higher education.
  • Rising salaries of academia
  • States putting limits on the amount schools can raise tuition.

Thus, many state schools have to keep cutting since the lever they have to increase revenue is capped,  And this would have been strung out for several years with those in the worst financial shape cutting out of athletics.

COVID-19 comes...which has required universities to reimburse room and board to many students, limited their ability to recruit new students for the Fall, etc., etc.  Basically, there won't be this "stringing out" for several years.  It will happen now.  FY budgets have to go to controlling boards soon and the state schools are looking for places to cut.  Since most universities have a lot of their expenses tied up in faculty salary, they really can't cut from there.  I guess they could close programs, but that will typically require exigency to be declared and, often, allows the state to have oversight.  The universities can go the buy out route (and many will), but you see those savings over time.   Basically, universities will cut from the non-academic areas .... which are administrative and athletics.

The MAC is very vulnerable at the moment.  I would anticipate a lot of cutting in MAC athletic programs over the next two months.  And it won't just be the MAC in the G5.  With the numbers in savings the schools need to cover budget deficits, football is very vulnerable.    Heck...I suspect some P5 schools that struggle are thinking about this as well.  Not a lot, mind you, but certainly a few.

It is not going to be pretty.

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On 4/25/2020 at 10:37 PM, UB92 said:

I can't find the post, but a little while back (maybe it was longer) I mentioned that I felt the group of 5 schools in football are in trouble (or G6 if you want to be nice to the AAC...after all, their football TV revenue is so much larger than the MAC).  I said that, in a few years, there will be a reckoning since academia is a bubble that will eventually burst.  After all, you have:

  • A shrinking (percentage-wise) of state appropriation towards higher education.
  • Rising salaries of academia
  • States putting limits on the amount schools can raise tuition.

Thus, many state schools have to keep cutting since the lever they have to increase revenue is capped,  And this would have been strung out for several years with those in the worst financial shape cutting out of athletics.

COVID-19 comes...which has required universities to reimburse room and board to many students, limited their ability to recruit new students for the Fall, etc., etc.  Basically, there won't be this "stringing out" for several years.  It will happen now.  FY budgets have to go to controlling boards soon and the state schools are looking for places to cut.  Since most universities have a lot of their expenses tied up in faculty salary, they really can't cut from there.  I guess they could close programs, but that will typically require exigency to be declared and, often, allows the state to have oversight.  The universities can go the buy out route (and many will), but you see those savings over time.   Basically, universities will cut from the non-academic areas .... which are administrative and athletics.

The MAC is very vulnerable at the moment.  I would anticipate a lot of cutting in MAC athletic programs over the next two months.  And it won't just be the MAC in the G5.  With the numbers in savings the schools need to cover budget deficits, football is very vulnerable.    Heck...I suspect some P5 schools that struggle are thinking about this as well.  Not a lot, mind you, but certainly a few.

It is not going to be pretty.

 

Akron:  https://www.hustlebelt.com/2020/4/24/21233631/university-of-akron-president-recommends-20-percent-budget-cut-for-athletics-in-new-master-plan

Kent:  https://www.cleveland.com/education/2020/04/kent-state-to-make-deep-cuts-due-to-coronavirus-crisis.html

A general article from today from InsideHigherEd:   https://www.insidehighered.com/news/2020/04/27/colleges-rev-cuts-pandemic-related-costs-keep-mounting

 

 

 

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3 hours ago, BrooklynBull said:

Most schools will be in real trouble.

  • They are told to expect less money from the state for the upcoming Fiscal Year (and beyond) because of the loss of tax revenue
  • They are told they have a cap on tuition
  • They HAVE to be able to open the dorms in the fall, because new dorms have been financed out and they need the money from the residence halls to pay the loans
  • They can't really take a bite out of the big expense (faculty salaries), so they do things like combine colleges to lower some administrative costs.
  • The only people they can cut are contract professionals and other non-faculty...but that already reduces the limited service provided
  • Athletics (especially football) is seen as a prime place to cut because of the scholarship dollars.  Of course, the scholarship dollars are not "real money" unless they can be replaced by the same number of students who are not on scholarship -- and if (most) schools could have already attracted those students to their institution, they would have already.

Akron is just the first to announce the details of the financial hole.  Others will follow shortly.  May will be a bad, bad month for universities and mid-major athletics.

 

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9 hours ago, UB92 said:

Most schools will be in real trouble.

Akron is in big trouble because they're a third-rate school with a heavily declining enrollment. No doubt in my mind UB gets hit from this but they have a little bit better of a situation than Akron.

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30 minutes ago, rma said:

Akron is in big trouble because they're a third-rate school with a heavily declining enrollment. No doubt in my mind UB gets hit from this but they have a little bit better of a situation than Akron.

I suspect UB will be/is in better shape than Akron, but there are 10 other schools in the MAC and they look more like Akron than UB.  That's the worry.   Here's the first info from Ohio University https://www.irontontribune.com/2020/05/05/ohio-university-cuts-140-positions/ with more information to come, no doubt.   WMU is going to cut a lot this year as they plan for the next FY.   https://www.mlive.com/news/kalamazoo/2020/04/western-michigan-university-lays-off-240-employees-enacts-pay-cuts-for-others.html

Like I said, May is going to be a bad month.   There is going to be news on a daily basis about this and it isn't going to be good.

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1 hour ago, UB77 said:

I'm just curious. Why would UB be in better position? I'm hoping that you're right though.

As RMA wrote, Akron had a pretty serious enrollment decrease over the last several years.  They have other problems as well (debt services on the stadium, other housing, etc.).

UB doesn't have a new football stadium (!) and the enrollment has been steady (around 31,000).  UB may have other financial problems, but I don't think it is nearly as bad as Akron (or many other MAC schools).   The bottom line is that it will be bad for everyone, but there will be differing levels of bad.  

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2 hours ago, UB92 said:

They have other problems as well (debt services on the stadium, other housing, etc.).

Akron's new stadium is awesome. One of the nicer G5 stadiums I've been to.

Unfortunately it is structurally falling apart, costing a ton of money, and nobody goes to the games.

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On 5/6/2020 at 11:17 PM, rma said:

Akron's new stadium is awesome. One of the nicer G5 stadiums I've been to.

Unfortunately it is structurally falling apart, costing a ton of money, and nobody goes to the games.

$4.3M per year is the debt service on the stadium, through 2038.

 

 

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Akron will be dropping sports today.

https://www.wksu.org/post/university-akron-cut-athletics-teams#stream/0

It seems that they may be in the worst financial state of any school in the MAC.  They have 21 sports (track and field counts as two teams for men and women - indoor and outdoor).  That allows them to drop six.  The NCAA voted against a waiver from having 16 teams this year to be a FBS program.

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Men's:

  • Baseball
  • Basketball
  • Cross Country
  • Football
  • Golf
  • Rifle
  • Soccer
  • T&F

 

Women's:

  • Basketball
  • Cross Country
  • Golf
  • Lacrosse
  • Rifle
  • Soccer
  • Softball
  • S&D
  • Tennis
  • T&F
  • Volleyball

Rifle and Lacrosse (red) are not MAC sports, but the MAC (as of now) will be adding lacrosse next year.

On the men's side, track & field and soccer are the least sponsored by other MAC schools. Baseball is brand new this year, but apparently is funded entirely by donations. It would be a shame for them to cut their soccer program.

On the women's side, tennis and S&D are the least sponsored by other MAC schools.

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1 hour ago, rma said:

Akron cuts men’s cross country, men’s golf and women’s tennis

I mean, that's really a ridiculous cut. Cutting men's XC...how much money does that really save them? Other than going to a handful of meets (with many that can be day trips), the XC guys are (or were) on the track & field team as is (was) the coach. 

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20 minutes ago, skrabukes said:

I mean, that's really a ridiculous cut. Cutting men's XC...how much money does that really save them? Other than going to a handful of meets (with many that can be day trips), the XC guys are (or were) on the track & field team as is (was) the coach. 

According to the news, the cutting of the three sports programs (and other cuts) resulted in a $4.4M savings.  Here is the information:

"The move affects 23 male and 9 female student-athletes. The elimination of these sports, along with salary reductions for select coaches, staff position eliminations, scholarship and operating expenditure reductions will total approximately $4.4 million."

I don't understand the math, actually.  Maybe someone can help me.

When I look at room and board, plus tuition and fees for Akron, if we assume the university paid for all of that, it is 32 student-athletes multiplied by $25,000.  That's $800,000 is "savings" though it isn't real money since it is money that is never collected.

At any rate, where does the other $3.6M come from?  Yes...they list the categories above (coaches, staff position eliminations, scholarships and operating expenditure reductions), but how does that make $3.6M?

Easy-to-understand and transparent university expenditures on athletics is non-existent.

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