IU athletics plans for nearly $12 million budget shortfall

From IndyStar reporter Zach Osterman:

An internal forecast projects IU athletics to require a cost savings of nearly $12 million for the coming fiscal year, as a result of the COVID-19 pandemic — and that forecast suggests the shortfall can be covered without reductions in staff or sports. 

According to a departmental memo obtained by IndyStar, Indiana’s athletic department will need to implement measures to save approximately 10% on expenses that would otherwise project to $118,915,508 for the coming fiscal year. That would require a necessary savings of approximately $11.8 million.

That memo, distributed by Athletic Director Fred Glass and AD-in-waiting Scott Dolson, outlines the first phase of the cost-savings plan that will address that shortfall. A second phase will be left open-ended in case the financial impact of the ongoing pandemic deepens through the first half of the fiscal year. 

it asserts that via first-phase cost-saving measures, which will go into effect when the new fiscal year begins July 1, the department projects to have “essentially achieved” the necessary budget reduction without impacting staffing or sports. 

Helping to address the projected shortfall: Dolson, Glass, IU football coach Tom Allen and IU men’s basketball coach Archie Miller — four of the department’s highest earners — will each donate 10% of their salary back to the department in the coming fiscal year. For each Allen and Miller, that donation will total more than $300,000, based on the terms of their current contracts. 

IU will offset COVID-19-related losses via other means as well, including: 

>> A freeze on salary increases and discretionary bonuses. 

>> A hiring freeze other than for countable coaches. 

>> A ban on unnecessary departmental travel.

>> Curtailing overtime. 

>> A freeze on all non-essential facility maintenance and construction. 

>> The university’s cellphone stipend elimination. 

There will also be what the memo terms “targeted cuts at the department and program levels” that the memo itself does not specifically name. 

The memo outlines to athletics staff several priorities, chiefly among them preserving current staff employment and a broad-brush term, “opportunities for students,” i.e. not just keeping all 24 varsity sports, but properly funding them, keeping wider departmental support structures in place, and so on. 

The memo does not address what specifically would trigger that, but it stands to reason the ability of Division I schools to complete a full football and men’s basketball season figures prominently. Revenues specific to those two sports together accounted for more than 60% of IU athletics revenue in the fiscal year 2019.

IU’s overall pre-COVID-19 expense estimate would represent an increase of more than $4 million on last year. The memo does not outline projected revenues, but balancing a budget with a 10% reduction on those projected expenses would require revenues of slightly more than $107 million. Indiana reported revenues totaling $127,832,628 in the past fiscal year.

3 comments

  1. This applies for all, everywhere, all the time, and not just IU. Just a couple months ago the compensation beyond scholarships for athletes debates and discussions were taking place. It didn’t take long for these kinds of discussions in this article to take place. Money reserves are always needed for rainy days. However, reserves can only help so much and what ratios (how much) are needed? Though there are questions regarding priorities that are debatable. Often, money and investments are spent like drunken fools. In recent events it could be called cyclones, hurricanes, blizzards, tornadoes, volcanic, and famines. Issues are far larger than sports and athletics financial issues.

  2. Not a well written article! So how does IU save 10%? Is it a 10% reduction across the board for all salaries in the athletic department? 10% reduction in all line items In the budget: travel, bonuses, etc.?$11.8 million is not the end of the world, but it is not “chump change” either. What are the projections for other B1G programs? We need more information. This is serious stuff! Covid-19 is real and debilitating! But some can still not be inconvenienced to wear a mask! Absurd!

  3. Shortfall, isn’t just an I U problem, Michigan $30 million shortfall, however Michigan has some reserves and has cut expenses, and UCLA is looking at the school to make up their shortfall. We will have to see how the 2020-21 college athletic revenues are hit from the virus, this maybe this the first sign of a serious revenue hit for all sports programs both college and the pro leagues if the virus isn’t controlled.

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