The Pac-12’s decision to play a seven-game football season starting Nov. 6 means Arizona might now salvage over $20 million in media rights money, but that’s still not nearly enough to dig the athletic department out of significant financial trouble.
Arizona athletic director Dave Heeke said last month he projected UA would lose up to $65 million without football and, while he declined Friday to revise that estimate, said there’s “still a very significant shortfall” — even if television partners pay all or most of what the Pac-12’s contract specifies.
A big problem is the Pac-12’s decision not to allow fans until at least January, after the football regular season concludes. In past seasons, UA has reported over $7 million in football ticket sales plus many other game-related revenue sources that might now be reduced.
“Without fans, there’s a tremendous challenge,” Heeke said on a Zoom call Friday. “We’re glad to be playing. But we are still significantly short on revenues and that’s going to be a challenge for us going forward.”
As a result, layoffs, furloughs or loans are all possible for Arizona’s athletic department, which generated 42% of its $102.3 million revenue in 2018-19 from football, according to the latest available figures from the U.S. Department of Education. Athletic department staffers and coaches have already been subjected to pay cuts and furloughs parallel to those of other UA employees. Contracted head coaches voluntarily went along with the plan, saving an estimated $3 million to $4 million.
“I believe we will have to do additional reductions inside the athletic operations,” Heeke said. “We’re reliant upon our own revenues, not those that come from the university … so we’ll have to really look at that. It’s very critical.”
According to the San Jose Mercury News, the Pac-12 arranged a loan program for member schools to borrow up to $83 million each at a 3.75% interest rate. Heeke said Arizona has continued to look into that possibility “very, very closely” but that no determination has been made.
Some projections in a postponed football season included fans being allowed at 25%-35% capacity. Now that percentage is zero. Heeke said he’s grateful that many fans have donated back the amount of their ticket purchases or agreed to accept credits for future tickets, but declined to say how much that might offset the lack of gate revenue.
“We’ve had great support,” Heeke said. “The majority of our fans have said, ‘We want to stand by the program. I want to help you through this very difficult time.’ Football is a significant revenue producer for us and I’ve been very pleased and very appreciative of what many of our fans have decided to do, supporting the overall athletic program.”
In the UA’s 2016-17 filing with the NCAA — Arizona has not yet fulfilled the Star’s Aug. 11 public-records request for records from more recent years — the athletic department attributed to football $7.14 million in ticket sales, $659,000 in program/parking/novelty/concession revenue, $4.57 million in contributions and another $4.95 million in royalties, sponsorships and licensing.
That year, Arizona also booked $22.5 million of its $26.5 million in media rights revenue as coming from football, and it may receive a similar amount even with a short season this time.
An ESPN spokesman said the network would not discuss what it is paying the Pac-12 for the seven-game season that was announced Thursday. A message seeking comment from the league’s other outside partner, Fox, was not returned.
Matt Balvantz, senior VP of analytics for sports market research firm Navigate, said each Pac-12 football game is worth between $2 million and $5 million to the networks. A shortened season could reduce the payout “incrementally by those amounts,” he said.
Fox and ESPN’s 12-year, $3 billion media rights deal with the league runs through 2024, and potential renegotiations may not be far off. There could be long-term consequences if either side plays hardball this winter.
Heeke said Friday that the networks “have been very receptive to our plan to deliver them a number of football games close to the contracted amount.”
“We feel that our media package will be, if not fully met, very close to that,” he said.
UA should also be able to reduce some expenses during a shortened, no-fans season. In 2016-17, UA reported $2.31 million in game-day expenses, along with $1.04 million travel costs and $1.17 million in overhead/administrative costs, all of which might now be reduced.
But putting all the new numbers together in a revised 2020-21 projection, Heeke said, was something he wasn’t ready for yet.
“We’re kind of almost scraping it all the way down,” he said. “We’re gonna have to rebuild (the forecast) to be quite honest with you. I think I owe that to our group, to the university.”
While Heeke said he was discouraged by the challenges of not having fans, he said he was encouraged, at least, by the chance to host a season of some sort.
The shortfall “will be a multi-year dilemma for all of our institutions,” Heeke said. “But we’re pleased that our young people can compete, that they can pursue their education here, and that we can do that safely and in the right manner.”
