By: Sean Rhomberg
FAYETTEVILLE, Ark. — The ongoing COVID-19 pandemic could cause the nation’s top schools and football programs to lose substantial profits this season.
For schools in the Southeastern Conference, a winning football program can mean millions in added revenue. It can also mean the difference between making a profit or losing money during the fiscal year.
Deputy Athletic Director Clayton Hamilton said in previous years the U of A’s football program generates roughly 70% of the athletic department’s revenue.
For many athletic programs, a year without a football season would mean tens of millions in lost profits.
“We knew at a minimum there would be a 20 million dollar reduction in revenues for this fiscal year,” Hamilton said. “That number could grow just depending on how the season is played out.”
Much of the department’s revenue would be stifled by the lack of a normal season of college football. For the U of A, large portions of this money comes from spectator ticket sales as well as donations made through the Razorback Foundation whose main goal is to financially support the athletic teams and players at the University of Arkansas.
According to the university’s 2018-2019 NCAA Membership Financial Report, the U of A received over $40.5 million in revenue from ticket sales. The program received over $22 million in contributions from various clubs, donors and organizations.
Hamilton said that a lot of planning went into forecasting the upcoming season and managing potential expenses and that there were contingency plans in place for any scenario that may arise.
Budgeting and planning for losses in revenue, like what the U of A was facing, took months of hard work. Hamilton said the program’s athletic conference was there to help when it came to making contingency plans.
“Being a member of the SEC is incredibly important for our program and the resources we have to support all 19 sports,” Hamilton said.
The Southeastern Conference comprises fourteen schools in the southern United States and brings in hundreds of millions in revenue during a typical fiscal year. According to the SEC’s revenue distribution, which was released after the 2018-2019 season, a total of $651 million in revenue was distributed between the 14 teams that make up the conference.
SEC schools often appear in lists of the most profitable athletic programs in the country thanks to profits from their football programs. According to a 2019 Forbes list of the most valuable college football teams, nine of the top 20 programs in the country are members of the SEC.
Only the University of Missouri and Mississippi’s most recent financial reports showed net losses following the 2019 football season. Alabama’s report showed a loss but attributed it to the school deferring $24.5 million in donations to 2020.
According to each school’s reports from the 2019 fiscal year, subtracting all football revenue and expenses from the year would cause every school to have a net loss, with some of those being $40 million or more.
Hamilton said that while football is not the only source of revenue for athletic programs around the country, it is often the most substantial.
“The football program will generate the bulk of the revenue.” Hamilton said. “Very few campuses can say they generate revenue from the football program, basketball program, and baseball program.”
According to their most recent financial report, the U of A is one of the few who generates revenue from all three major athletic programs.
Looking toward next year, Hamilton predicts to see some lasting effects even if much of the concern regarding the virus has been dispelled.
“Sitting here today, you anticipate there will be a ripple effect into next year and the future as well,” Hamilton said. “We’re prepared to manage that.”
Click here to take a look at how a football season can affect the income of various schools in the SEC