Gamecock athletics facing $58 million shortfall due to coronavirus | South Carolina

COLUMBIA — It’s like playing the stock market. Projected revenues aren’t actual money in hand until the stock is sold. They’re just numbers on a page that could change, for better or worse.

So when South Carolina athletics director Ray Tanner gravely told the Board of Trustees last week that USC could be $58 million short of its projected $127 million revenue this year, it wasn’t definite. It was just a number in the air that could change all the way to the point where it becomes real.

But everyone knows how drastically the pandemic is affecting USC, and that no amount of sunny optimism affects a shortfall of $58 million that much.

“The budget outlook before us is more serious than any the university has faced since the Great Recession, and the loss of revenue next fiscal year could surpass the recession in terms of a single-year impact,” school president Bob Caslen said in a message to the student body, reflecting the school’s estimated $165 million loss. “It will require a new level of creativity and shared sacrifice from our entire campus community.”

And for athletics, the front porch to the university, it’s going to have a long-reaching impact that could mean slashed salaries, paused projects and what Tanner has said is the last option he wants to consider — eliminating sports.

“Everything is on the table,” Tanner said recently. “We do have another model with operations that could include 10 to 15 percent more of cuts.”

The bleak path to $58 million

It begins with ticket sales, where normally football creates the greatest amount of revenue. A seven-game home football schedule featuring Alabama, Florida and Clemson last year created approximately $20 million by itself.

USC knew it wouldn’t approach that total this year because those teams weren’t going to be home games, replaced by Georgia, Tennessee and Texas A&M. Those games are still scheduled, but of course they won’t be attended by anything near to Williams-Brice Stadium’s capacity.

Seating will be capped at 25 percent (approximately 20,000 fans) and there are only five home games instead of seven. With all other sports at 20 percent capacity (and unknown home basketball schedules at this time), Tanner estimated the school will only make $6.7 million from tickets, down $12.79 million from projections.

The SEC and NCAA payouts, much of them generated from televised events, will suffer after there were no NCAA basketball tournaments or spring sports championships this year. USC estimates a $10.45 million shortfall. Gamecock Club revenue ($8.67 million) and money from sponsorships, media and royalties ($7.29 million) are also being counted as heavy losses.

“Everything we do is fan-based and donor-based,” Tanner said.

What does $58 million cover?

The revised athletic budget’s biggest expense is the total salary of the athletic department. That’s $51.4 million even after voluntary 10 percent pay cuts from Tanner, football coach Will Muschamp and basketball coaches Frank Martin and Dawn Staley.

The other large expense is scholarships. The Gamecocks, who honored scholarships to all spring sports athletes that chose to return after their seasons were abruptly ended, are covering $12.7 million worth of scholarships.

That figure is only $15,000 short of what it was projected to be. Tanner, who treasures student-athlete welfare above all, has pledged to do everything he can to ensure that all scholarship athletes will not be affected by the budget crunch.

Saving and scrounging

The chance to come up with ideas to make money is limited because there are so many limited events. USC won’t be able to count on concession sales from non-athletic events at Colonial Life Arena, as there will be no concerts or other shows other than basketball this year.

The total savings from the coaches’ pay cuts, athletics department furloughs and a hiring freeze is $10.3 million. That also includes not paying opponents to come to USC for football and basketball games ($2.16 million) and rearranging how the Gamecocks will travel this year ($1.1 million).

“We tried to produce a schedule where there would be ground-travel only, but we do have one flight to Arkansas,” Tanner said in discussing the women’s soccer team’s revamped slate.

Other slight changes will help. The women’s golf team had a tournament in Atlanta added to its schedule but all costs are covered by the tournament. The NCAA has extended its recruiting dead period (no in-person recruiting) until Jan. 1, meaning no coach or staffer in any sport can travel to recruit, which eliminates those travel costs.

USC was locked into spending major funds in two areas.

The department’s debt is over $160 million after transforming its facilities campus-wide over the past decade. Servicing that debt this year will cost upwards of $12.5 million.

Renovations to Williams-Brice Stadium cost $22.5 million and were in motion once the 2019 season ended, well before COVID-19 was the threat it is today. The construction is nearly complete.

What’s next?

It’s as much of a question as the projected losses. USC certainly hopes the financial picture won’t be so messy, but it appears that is a meager hope.

A department that has turned a profit every year since 2007 (even last year, when COVID first hit) most assuredly will not this year. That will affect everything going forward, especially if the readjusted seasons are further affected.

The NCAA has guaranteed all fall-sports athletes a free year, meaning they can return on scholarship in 2021-22. That’s only going to happen if the schools can afford to give them those scholarships, something Tanner very much wants to do but will also have to answer to the bottom line.

There are scholarship limits (85 for football, 13 for men’s basketball, etc.) that the NCAA sets but schools don’t have to distribute the maximum number. USC has thus far managed to avoid cutting any of its sports programs (several other schools have already slashed their non-revenue-producing sports), but Tanner has said several times that option is on the table.

“There could be 10 to 15 percent more of cuts,” he said. “We’ve already made some decisions about future cuts we may make if we have to.”

All schools are having to tighten, dreading what the future will hold. All ADs know there will be painful decisions to make.

The projected numbers aren’t good, but they also aren’t definite. Yet everyone in college athletics knows that while the sky is brightening in terms of playing sports, several more dark months are on the horizon.

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