By Pat Harty
IOWA CITY, Iowa – At this time a year ago, the Iowa Athletic Department was thought to be on solid ground as a self-sustaining operation.
The combination of strong fan support, lucrative fundraising, a winning football program, and, of course, television revenue, gave the impression that Iowa had a healthy business model of which to be proud.
But then it barely took six months for a global pandemic to show that Iowa athletics wasn’t ready to handle a financial crisis.
What seemed to be a rock-solid foundation in many ways was a house of cards ready to crumble at the first sign of trouble.
The Big Ten’s decision to reinstate fall football will certainly help ease some of the financial pain and suffering, but not enough for things to return to normal.
Iowa Athletic Director Gary Barta held a zoom conference with the media on Thursday and the first question he was asked was about the four sports that Iowa recently cut due to budget shortfalls caused by the COVID-19 global pandemic.
Barta had just mentioned that the No. 1 priority was the student-athletes having a chance to play football again.
But then he was asked why that didn’t apply to the student-athletes in the four sports that were cut since there will be some money coming in again, or if that’s just an entirely false assumption?
“Maybe our deficit goes from 75 million to 60 million or 55 million,” Barta said. “The deficit that we will take on this year is going to be, I hate to use a word like catastrophic, but that’s really what it is. And I say catastrophic because it led to people losing their jobs. It led to people taking pay cuts. It led to student-athletes in four sports after this year not having an opportunity.
“And unfortunately, that’s still going to be the case. It will be better, but far from a relief.”
Barta previously said that Iowa was looking to take out a $75 million loan that would be paid over 15 years.
The athletic department is expected to save about $5.5 million annually by cutting both men’s and women’s swimming, men’s tennis and men’s gymnastics. So it seems pretty apparent that the money saved from cutting those four sports would be used to help pay off a bulk of the loan.
Iowa also has eliminated 40 jobs in the athletic department and is having its coaches take a 10 percent pay cut.
And those who were fortunate to keep their jobs now have to take furloughs in order to help withstand the financial shortcomings.
It now seems painfully obvious that keeping up in the arms race, which is so much a part of big-time college athletics, came at a heavy price, both literally and figuratively.
Iowa has some of the newest and nicest facilities in the Big Ten, but the athletic department also seems to have had no real strategy to help limit the damage caused by a crisis, or a willingness to absorb much of a financial hit.
There has been this attitude in big-time college athletics in which big-time spending is justified as part of keeping up with the arms race. The fear is that if you don’t spend enough money it will eventually impact the product on the field, especially in the case of football.
However, the problem with that approach is that no money is put aside for an emergency.
Coaching salaries have continued to skyrocket to where even some coordinators in football are being paid seven-figure annual salaries.
Iowa head coach Kirk Ferentz is paid nearly $5 million annually, but that only ranks sixth among Big Ten football coaches.
Michigan coach Jim Harbaugh is the highest paid Big Ten football coach at $7.5 million annually, followed by Purdue coach Jeff Brohm at $6.6 million.
Some will justify the enormous salaries by saying that football helps to fuel the entire athletic department, and that some football programs, including Iowa, were self-sustaining before the pandemic struck.
Iowa prior to the pandemic was covering all of its expenses in football, with help from television revenue from the Big Ten Conference. But Iowa apparently wasn’t putting any money aside for an emergency.
Because how else do you explain cutting four sports and eliminating 40 jobs in less than a year?
And while it’s easy to judge the Iowa Athletic Department with hindsight, the financial impact from the pandemic is proof that Iowa, and many other college programs, were living beyond their means and spending when they should have been saving a little.
The global pandemic has shown just how vulnerable the Power 5 programs are from a financial standpoint due mostly to overspending.
It also has shown that non-revenue sports would be wise to create a different business model because they truly are at the mercy of football under the current setup.
Iowa was the first Big Ten athletic program to cut sports due to the pandemic, but Minnesota has since made similar cuts and expect more schools to follow.
Stanford also will discontinue 11 varsity sports at the conclusion of the 2020-21 academic year.
So Iowa hardly stands alone with it budget shortfalls.
It now seems obvious that hardly anybody was ready to handle the financial devastation caused by a pandemic, and some people whose jobs were secure a year ago are now paying a heavy price.
In fairness to Iowa, and to the other colleges being rocked by the pandemic, it’s easy to say with hindsight that they should’ve been ready for this kind of disaster, even though this kind of disaster only happens on average every 100 years or so.
But this should be a warning that keeping up with the arms race, as important as it is from a competitive standpoint, makes what was believed to be a sturdy program like Iowa fragile in many ways.
These are scary and uncertain times.
The virus still is a threat, but apparently there isn’t enough money saved to help offset the damage it has caused, and that’s because college programs were more concerned about keeping up with the arms race than saving for a disaster.
And now they really have a disaster in the making.