The fallout of the coronavirus crisis is already significant and few corners of our everyday world will be spared.
Indiana State’s athletic department is no exception.
As far as events were concerned, everything came to a screeching halt March 12 when the spring season was suspended. One day later, the 2019-20 athletic seasons came to an abrupt and premature end.
College athletics aren’t alone, of course. With stay-at-home orders, much of life as we know it has also been frozen.
“That’s probably the toughest thing,” said ISU Director of Athletics Sherard Clinkscales on the hit to morale over the unprecedented stoppage.
“It starts with leadership and our leadership team in the athletic office is holstering down and focusing on the upcoming year. We look it as an opportunity to re-engage some things we couldn’t do because of the ongoing season. Now we can take a look from a facilities standpoint, budget standpoint and be creative going into the new year. I know the coaches are doing it within their respective sports,” Clinkscales added.
As ISU athletics tries to navigate its path forward, it will have obstacles to overcome regardless of when life returns to some semblance of normal – as all schools at all levels of athletics will too.
The economic fallout is still unknown, but it will be significant, and will perhaps be fundamentally altered, at all levels of college sports.
The underpinning of the entire fiscal basis on which Division I college athletics works is media rights money.
It has generated the windfalls college sports has earned generally, but the Power Five conferences specifically – and revenue is in jeopardy of being eroded significantly, at least in the short-term.
With no events comes no media rights money – and no event has more of a financial impact than the recently canceled NCAA men’s basketball tournament.
The economic fallout of canceling the NCAA men’s basketball tournament will have shockwaves for every school in every division of the NCAA because the NCAA itself is, essentially, a banker of sorts for all three divisions of college athletics.
It is estimated that 95 percent of the NCAA’s $1.1 billion annual budget comes from the March Madness media rights payout and ticket sales for the men’s basketball tournament. The NCAA distributes $600 million of that annually to Division I schools and conferences from that payout.
For many schools, three to five percent of their annual athletic budgets are predicated on money the NCAA earns from March Madness.
That distribution is usually paid in the spring in installments based on various factors like the unit payments distributed to universities via NCAA Tournament success (parceled out, by average, over a six-year period to all members of conferences roughly equally), the Sports Scholarship Fund, the Grants-in-Aid Fund and others.
Normally, this money is guaranteed, but with the cancellation of March Madness, the usual assumptions about the financial health of the NCAA is very much in doubt.
The NCAA has an emergency fund, but it has tapped into it for other matters (including legal troubles) in recent years and there’s no guarantee catastrophic-event insurance will cover the revenue lost or when it would be paid if it did, especially when so many events worldwide are also being canceled, stressing the financial viability of the insurance in the first place.
“I won’t speculate what the NCAA will do, because it changes all of the time. Not only Indiana State, but Power Five schools and our sister schools [in the Missouri Valley Conference and in-state mid-majors] will all be impacted by this event,” said Clinkscales on the cancellation of March Madness.
Clinkscales declined to provide the specific amount ISU expects to receive, but Clinkscales said the NCAA distribution via the Missouri Valley Conference was in “six figures”.
The MVC – which earns 60 percent of its annual revenue from the NCAA distribution and which also lost revenue on ticket sales from the canceled St. Louis Regional in the NCAA Tournament – confirmed that a single NCAA Tournament unit earned was worth $280,000 in 2019, an amount split roughly 10 ways among conference members.
(The school that earned the unit gets a slightly higher percentage of the payout.)
However, money is distributed over a six-year period. In a document provided by MVC commissioner Doug Elgin, the MVC’s distribution was between $3.1-7.2 million from 2011 to 2019.
The $7.2 million for a record 26 units earned occurred last year as Wichita State’s 2013 and Loyola’s 2018 Final Four runs converged on the balance sheet.
(Wichita State’s units earned from 2013-17 and Creighton’s pre-2013 units were retained by the MVC when both left the league.)
According to Elgin, on an annual basis, the conference sets its fiscal expectations based on 1.5 units per tournament. The MVC projected a payout of $5.1-6.3 million from 2021 through the 2026 season on the document provided by Elgin.
So ISU’s annual payout varies, but it is in the ballpark of $500,000 annually, sometimes lower, but lately higher given the tournament success of Wichita State, Northern Iowa and Loyola in the latter part of the 2010s.
This was also to be the first year of an academic fund payout that, by 2026, was projected to have $2.8 million split evenly among the 10 MVC schools. (The payout would have been small in 2020 as it is at the beginning of its six-year distribution.)
The MVC’s estimated payout, per league figures, for 2020 was $5.9 million, split roughly 10 ways.
All of the above is a sizable chunk for an ISU athletic budget at $14,110,713 for the 2019-20 fiscal year, according to ISU’s budget office.
“It obviously will be a big hit for us. We will do the best we can to fill the gaps. I am thankful to the university for what they provide to us,” said Clinkscales, who cited President Dr. Deborah Curtis and Provost Michael Licari specifically.
“It’s incumbent upon us as an athletic department to be able to raise those funds and fill those gaps to revenue. It’s going to be challenging and it will be fairly impactful,” Clinkscales added.
Another unforeseen cost is the NCAA’s decision to grant eligibility relief to spring athletes, though it will be felt less at ISU than at larger schools.
The cost comes in terms of scholarship money paid out. However, most spring sports are not full-ride scholarships. ISU does not offer full cost of attendance for spring sports either.
Then there’s long-term considerations. ISU announced its Athletic Vision in October highlighting its desire for a new football/soccer stadium, new baseball/softball complex and basketball practice facility.
With the economy going the wrong direction, those goals are much more difficult. Clinkscales said there is no active campaign going at present for those projects.
“It’s something we aspire to get to, but there are no concrete plans to begin fundraising for it. For right now, there’s some people who obviously want to see, but as far as running any kind of campaign for it, that’s not going to happen at this time,” Clinkscales said.
ISU’s goal is to make sure it remains in good stead with those interested in making these projects happen when things turn around.
“With the market losing as much as it has, people aren’t in the mood to give. We have to continue to nurture those relationships, talk about the good things we have going for the future, and hope we plant seeds we can harvest in the future,” Clinkscales said.
Clinkscales said there have no delays that he’s aware of as far as Hulman Center’s renovations are concerned, though he spoke to the Tribune-Star before Indiana Gov. Eric Holcomb declared a “stay at home” order.
Construction was on the list of essential businesses under “critical trades” released by Holcomb’s office, though only for essential activities and essential businesses and operations.
“As far as I have been told, we’re on schedule to open up in October or November. I don’t see anything impeding that at this time,” Clinkscales said.
Depending on how the coronavirus crisis plays out, there could be further delays and more hurdles. For now, Clinkscales has his staff focused on the 2020-21 season. It’s all they can do at this point.
“We’re disappointed that our seniors that will not be able to continue. We understand life is going to throw us things we can control. We have to stay positive and move forward,” Clinkscales said.