Latest snapshot of Iowa athletics finances after losing $42 million in pandemic year

Chad Leistikow
Hawk Central

The University of Iowa athletics department operated at a deficit of nearly $42 million in the 2020-21 academic year that was significantly impacted by the COVID-19 pandemic, financial documents recently supplied to the NCAA show.

That gap between expenses and revenue — $41,965,518, to be precise — is much higher than many of the Hawkeyes’ Big Ten Conference rivals and has contributed to sending Iowa’s total athletics debt to more than $256 million.

The deficit is not surprise news. Iowa athletics director Gary Barta has been up front about the fiscal-year deficit (FY2021) being in the range of $40 million-$45 million. That is why on June 30, 2021, the athletics department signed an agreement to borrow $50 million from the university’s cash reserves. Barta cited the significant deficit as a driving factor in ultimately cutting three men’s sports — gymnastics, swimming and diving and tennis. (Women’s swimming and diving was initially cut but restored on the heels of a Title IX lawsuit that also paved the way for the addition of women’s wrestling.)

Iowa's latest financial report to the NCAA, which was due Jan. 15 and obtained this week through a freedom-of-information act (FOIA) request by the USA TODAY Network, outlined some of the financial particulars of how Barta’s department navigated the pandemic. Additionally, we examined how Iowa’s financial books compare to some of its peers.

Some top-line takeaways from the data are below.

Iowa's athletics budget benefited to the tune of roughly $40 million thanks to football games that were able to be played in the 2020 season curtailed by COVID-19. Fans returned in 2021, which should help FY2022 budget figures.

1. Iowa’s total revenues fell by $71 million in one year.

While fiscal-year 2020 was impacted by the beginning of the COVID-19 pandemic — with the cancellation of the 2020 NCAA basketball/wrestling tournaments and spring sports — the athletics department still brought in $145.6 million. That was only a slight relative dip from Iowa’s FY2019 figure of $149.1 million. But with no fans in the stands, Iowa’s revenues plummeted to a shade under $74.8 million in FY2021.

The loss in ticket sales, with fans not being permitted to attend events as part of a decision by the Big Ten Conference, was the most notable (and expected) dent. Iowa brought in $189,991 in tickets revenue compared to $25.7 million the previous year. But that only tells part of the reason fans’ absence was such a big deal.

Financial contributions fell by $24 million — from $36.2 million in FY2020 to $12.2 million in FY2021. Greg Davies, the athletics department’s chief financial officer, said the drop was "largely due to a reduction in seat contributions and premium seating income" at Kinnick Stadium for seven home football games. At Iowa, fans who contribute the most dollars typically get the best seats for home games.

Additionally, Iowa lost more than $2 million in revenue from gameday income like programs and parking.

Iowa’s media-rights revenue dipped by $10 million, year over year, but the big factor was the lack of fans. All told, empty stadiums and arenas accounted for a direct revenue loss of more than $51 million.

A look back:'A catastrophe': Iowa athletics forecasts $100 million in lost revenue after cancellation of fall football

2. Without a football season, the damage would’ve been much worse.

As you probably recall, Barta initially forecasted a "catastrophic" deficit of $75 million-$100 million when it appeared the 2020 football season would not be played. But salvaging an eight-game, conference-only season provided a big benefit to athletics’ bottom line.

According to the NCAA report, Iowa brought in nearly $32.5 million in media-rights distributions from football (plus an additional $3.87 million from men’s basketball and $37,500 each for women’s basketball and wrestling). Additionally, Iowa received nearly $6.1 million from the Big Ten related to bowl-game revenues. In other words, having televised football games during the COVID-19 pandemic resulted in nearly $40 million in revenue alone for Hawkeye athletics.

A look back:Gary Barta says Iowa's financial situation still 'catastrophic' despite Big Ten decision to play 2020 football

3. Spending naturally went down in some areas, but additional costs cropped up.

With coaches not allowed to go on the road to recruit high school prospects, Iowa realized a cash savings of about $1.4 million.

Not staging games or events with fans also saved the athletics department about $3.5 million.

Barta announced staff reductions and furloughs as part of the pandemic plan. Iowa’s expenditures on support staff dropped by about $4.25 million — from $21.7 million in FY2020 to $17.45 million in FY2021 — as a result of those cuts.

A reduction in team travel costs saved about $2.4 million.

Iowa also spent about $4.6 million less in guarantees paid to visiting teams ($405,944 in FY2021 vs. $5 million in FY2020), with no non-conference opponents in football and very few in men’s basketball. In the 2019 football season, for example, Iowa paid $1 million to Miami of Ohio and $1.5 million to Middle Tennessee State. 

Some costs stayed steady. Financial aid/scholarships for athletes (totaling $13.3 million), student-athlete meals ($3.9 million), sports equipment ($2.4 million) and coaching salaries ($26.4 million) were similar to FY2020 levels.

A notable spending category on the FY2021 report that wasn’t there in FY2020: Severance payments totaling $1,264,119. The bulk of that, $1.18 million, was paid to former football strength and conditioning coach Chris Doyle in a separation agreement following the racial-bias outcry in June 2020.

In total, Iowa reported $116.75 million in expenses in FY2021 vs. $149.1 million in FY2020.

4. How much will cutting three sports save?

In their final seasons at Iowa, the costs to fund men’s gymnastics ($757,113), men’s tennis ($681,449) and men’s swimming and diving ($1,074,098) totaled a shade over $2.5 million. Of course, the addition of women’s wrestling will negate some of that future savings. Barta initially estimated that annual spending on women’s wrestling will be in the $500,000 range.

A net $2 million saved per year by cutting the sports is a relative drop in the bucket compared to Iowa’s athletics debt that totals $256.4 million. That is an increase from FY2020’s reported athletics debt $223.8 million, and Davies said the $50 million loan from the university is included in that figure. By comparison, Iowa’s FY2017 athletics debt was $155.6 million — meaning more than $100 million in liabilities have been added in less than five years.

A big chunk of the added debt came from the North end zone renovation at Kinnick Stadium, which was finished before the 2019 season at a price tag of $89 million.

A look back:Reducing football schedule delivers financial blow to Iowa athletics. Here's how much it will sting

5. Other Big Ten programs reported lower deficits in FY2021.

The NCAA financial report serves as the best snapshot annually to compare athletics department spending at different institutions, because reporting is done via a standard document that all schools adhere to. While there are differences in how schools report certain expenses, the information is helpful to determine the financial activity and condition of athletics departments.

As of Tuesday, six public-school NCAA reports of Big Ten universities had been obtained by USA TODAY Sports: Illinois, Iowa, Michigan State, Minnesota, Nebraska and Purdue.

Iowa’s net deficit of $42 million in FY2021 was the largest of the group. Minnesota had the second-largest deficit of $18.3 million ($103.8 million spent vs. $85.5 million in revenue), followed by Michigan State ($15.4 million deficit), Nebraska ($12.1 million deficit), Purdue ($8 million deficit) and Illinois ($3.2 million deficit).

Big-picture, Iowa’s total-athletics debt is second-highest in the group. Illinois is the highest at $314.1 million, followed by Minnesota’s $216.7 million, Purdue’s $137.3 million and Michigan State’s $72.4 million. Nebraska was the only Power Five public-school program in FY2020 in USA TODAY Sports’ database to report $0 in athletics debt; it again reported $0 in debt in FY2021.

Davies said Iowa was cautiously optimistic it would return to pre-COVID financials in FY2022, which is ongoing. Iowa athletics turned a profit of $5.7 million in FY2019 before sustaining a $3.5 million shortfall in FY2020.

“We are fortunate our fall competitions were completed as planned,” Davies said, “and are hopeful the winter and spring seasons will be uninterrupted as well.”

Hawkeyes columnist Chad Leistikow has covered sports for 27 years with The Des Moines Register, USA TODAY and Iowa City Press-Citizen. Follow @ChadLeistikow on Twitter.