College Athletics Hit Hard At Texas, Michigan, Indiana, Texas Tech
As revenue losses continue to mount this fall, colleges are turning to round after round of staff furloughs and layoffs to cut costs. Now, athletics departments are under the gun, and some of the nation’s biggest sports powerhouses are being forced to resort to furloughs, layoffs, and salary reductions as they slash their budgets in the wake of the coronavirus pandemic
University of Texas
In a sure sign that no one is safe from the pain, the University of Texas-Austin athletics department, reportedly the revenue-richest program in the country, began on Tuesday to implement lay offs, pay cuts and furloughs to cope with its massive financial losses from the Covid-19 pandemic.
Calling the decisions “heartbreaking, but necessary” UT Athletics Director Chris Del Conte wrote that the department expects the personnel actions will save about $13.1 million for its budget.
Included in the decisions:
- 35 staff members will be laid off,
- 35 vacant positions will be eliminated,
- 273 staff members will take temporary salary cuts, and
- 11 staff members will be furloughed with benefits, effective from Oct. 1 through August 31, 2021,
- 26 coaches and administrators under contract will voluntarily take salary reductions for the year.
The UT salary reductions will be phased in based on an employee’s salary. The first $50,000 of salary will be reduced by 2.5%, from $50,001 to $100,000 will be cut 10%, and any salary greater than $100,001 will be reduced by 15%.
University of Michigan
Also on Tuesday, the University of Michigan, another perennial Power Five titan, announced it was facing revenue losses of potentially $100 million. As a result, athletics director Warde Manuel announced that the department would eliminate 21 positions
“The decision to implement staffing reductions was not made lightly and is difficult because of the deep impact on all aspects of our department and especially those who are directly affected,” Manuel said. “We will continue to identify all necessary strategies to mitigate our circumstances, and we will continue to support our dedicated colleagues who have been so greatly affected.”
The layoffs are in addition to a hiring freeze and other cost containment measures, including salary reductions and freezes, that Michigan had already implemented. And Manuel also acknowledged that staff furloughs were still on the table as Michigan struggles to find ways to cut its expenses.
Last week, Indiana University announced that its athletic department was taking a 10% budget cut to cover some of the losses it was projecting for the year. That amounts to $11.8 million for fiscal 2020-21 year and includes furloughs, a hiring freeze, and reductions in travel, along with voluntary cuts in the compensation paid to IU’s highest paid coaches and its AD.
Effective Oct. 1, all IU athletic staff will be expected to take at least a two-week, unpaid furlough in the fiscal year. Other staff members will have their hours cut between 50% to 100%.
“Due to the COVID-19 pandemic, IU Athletics has not participated in an intercollegiate athletic event in five-and-a-half months, which necessitated tough decisions regarding our staff,” said Scott Dolson, IU’s athletics director. “Throughout this process, we have prioritized our staff, and the decision to ask everyone to share the burden was made to minimize the number of employees who would be impacted to a much more significant degree.
On Monday, Texas Tech University announced the elimination of 40 staff positions within its athletics department in addition to salary reductions for other employees. Salary reductions will be required for all employees paid $30,000 per year or more. The reductions will range from 3 to 14%, depending on a staffer’s salary level. Texas Tech’s coaches and AD will also take voluntary reductions in their compensation.
“Today was an extremely difficult and challenging day for Texas Tech Athletics,” Director of Athletics Kirby Hocutt said. “Covid-19 has had a major financial impact on our athletics department, and it was necessary to make these very difficult decisions. We will continue to support our student-athletes and each other as we move forward.”
These latest moves come on the heels of previously reported actions at NCAA Division I schools such as the University of Nebraska, which furloughed 51 employees and the University of Iowa which is cutting four varsity sports at the end of the year — men’s and women’s swimming and diving, men’s tennis and men’s gymnastics.
Those auxiliary components of a university that depend on external revenue for their budgets are being particularly hard hit by the suspension of on-campus activities or the delays in campus re-openings taking place at many universities across the nation. They have essentially become businesses with little, if any, reliable revenue. Put athletics right at the top of the list of the units most affected, and with many fall sports competitions currently either cancelled or postponed, the problem will only worsen. Don’t be surprised, as the pressure builds, if the decisions to delay sports schedules are revisited in the days ahead.