Hawkeye athletics institutes spending, hiring freeze to weather coronavirus losses

Travis Hines
Hawk Central

The University of Iowa athletic department has instituted hiring and spending freezes and plans to tap its reserve fund to cover the expected shortfall of “several millions of dollars” caused by the ramifications of the novel coronavirus pandemic between now and the end of its fiscal year later this summer.

“If things come in the way we’ve estimated them,” Iowa athletic director Gary Barta said Thursday in a teleconference with reporters, “we believe we can cover everything without cuts in pay right now, without letting anybody go or any furloughs and cover everything with reserves between now and June 30th.”

The Hawkeyes’ immediate budget hole was created primarily by the cancellation of the Big Ten Conference basketball tournaments and the NCAA basketball tournaments. Iowa is set to receive approximately $1.5 million in a distribution from the NCAA, approximately two-thirds less than anticipated, according to Barta.

Iowa athletic director Gary Barta speaks after a NCAA Big Ten Conference women's basketball game, Sunday, Jan. 26, 2020, at Carver-Hawkeye Arena in Iowa City, Iowa.

That, though, is the immediate issue. The longer-term planning is far more complex and potentially dire given the economic ramifications of the COVID-19 pandemic. A record number of Americans have already lost jobs in the fallout and social distancing rules mean the fate of football season this fall remains in question.

“We know our revenue is going to be less next year,” said Barta, whose department had an operating budget of $125 million last year. “Everybody in America, their personal finances, their business finances, certainly the University of Iowa, is expecting revenue to be less next year so we’ve been modeling. 

“What if it’s 10% less? What if it’s 15% less? What if it’s 25% less? We’ve begun to put together plans on how we’re going to approach that and how we’re going to manage it.”

Iowa has not yet taken the step to ask its employees — specifically its coaches on multimillion-dollar contracts — to take pay cuts, something an increasing number of athletic departments, including Iowa State, have done.

That step, though, seems inevitable.

“One of the larger expenses in our budget is compensation of 250 full-time employees,” Barta said, “and so I expect there will be reductions. We have to reduce that expenditure. I’m not going to predict by how much yet. I’m not going to predict who. 

“I anticipate most everybody if not everybody will be involved in that, there will be shared sacrifice, but it’s too early for me to tell you exactly what we’re going to do. We’ll be reducing operating budgets. Everything that we do, I anticipate is going to be reduced.”

Iowa has paid out performance-based bonuses to its coaches who achieved them, but it is yet to be determined if there will be any payments for benchmarks that were likely to be met if not for the cancellation of seasons — such as the men’s basketball team’s certain inclusion in the field of the NCAA tournament that never materialized.

“We haven’t paid out any speculative bonuses,” Barta said. “We haven’t made any final decisions on those, but we have paid everything that was earned in absolute and moving forward it will all be part of our discussion on adjusting to the new norm.”

The exception to the across-the-board reductions is in Iowa’s scholarship allotment, which typically costs the athletic department $13-to-$14 million per year, Barta said. 

“That is a commitment that we’re not planning on taking away scholarship money from any student-athlete,” he said.

Iowa has 25 to 35 seniors in spring sports that will be able to return next year after the NCAA granted an additional year of eligibility after those seasons were canceled. That would be at a cost of approximately $500,000, Barta said.

Spring sports coaches will not be able to reduce scholarship money for their returning underclassmen, most of whom are on partial scholarships, though those returning seniors could see reductions in aid. If programs are over their budgeted allotment in scholarship money, the sports must fundraise the difference or take the money from their operating budget, Barta said.

Facilities projects have mostly halted with two exceptions. The $10 million Finkbine golf course clubhouse project is nearing its completion while planning for the proposed $20 million wrestling facility continues.

“We had permission to hire an architect and move forward and that’s something that can still be done via Zoom and online,” Barta said. “So we’re interviewing architects, and we have funding from donors already to pay for those architects so we’re going to continue developing and designing the building and try not to let that slow up.”

Iowa is also trying to make it easier for its football season ticket holders to pay their bills.

“We moved our deadline back,” Barta said. “We have payment plans for our fans to spread their payments out. We want our fans, our season-ticket holders because that’s what we’re focused on right now, we want them to remain season-ticket holders. We’re doing everything we can to accommodate that.”

Getting to the point where those tickets can be used is what remains the biggest unknown and the largest peril for athletic department finances.

“We’re modeling. We’re preparing,” Barta said. “We know it’s going to be shared sacrifice. We know it’s going to be significant.

“Everybody knows that the revenue derived from football drives college athletics. Having a season or not having a season dramatically changes college athletics, at least for next year and I suspect this will have an impact for a long, long time.”