Badger sports could take a big hit from COVID-19

This weekend, we saw 4 former Badger football players get taken in the NFL Draft, and others got picked up by teams as undrafted free agents. But going forward, you have to wonder if Badger sports is going to continue as the revenue-generating giant that we've known it to be for the last 25 years. And that's because of some financial crunches that might be coming as part of the fallout of COVID-19.

Different playing field in 2020?

We already know that Bucky will lose a significant source of Summer income as a result of coronavirus concerns.

The University of Wisconsin’s summer youth sports camps are the latest items wiped off the calendar by the COVID-19 pandemic.

Camps, which initially were canceled through May 15, now have been put on hold through Aug. 15.

On-campus camps can play a role in recruiting, especially in football. But that represents only a small percentage of attendance,

Chynoweth told the UW Athletic Board at a February meeting that the school had more than 11,500 campers in the 2018-19 fiscal year. UW had 73 camps planned for the summer months, as much as 80% of the school’s total camp offerings for the year, according to a spokesperson...

An audit of the athletic department’s finances in 2018-19 showed that sports camps produced $3.2 million in revenue with $1.3 million in expenses. The 2019-20 budget projected $2.75 million from camp revenue.

In 2018-19, those camps were the largest source of revenue for the Badger volleyball team that got to the NCAA Title game last December, and also is a significant source for men's basketball along with numerous other non-revenue sports.

Those losses are on top of UW Athletics being affected by the NCAA's $375 million reduction in revenues as a result of March Madness being canceled. UW's share of that pie in 2018-19, based on its most recent budget (on Page 80 of this PDF) came to about $2.3 million.

Badger Athletics Director Barry Alvarez told UW-Madison Athletic Board last week that even with the loss of March Madness and Spring sports, Bucky should end up OK through the end of the fiscal year, which comes on June 30.

Alvarez, the UW athletic director, told an online meeting of the Athletic Board on Friday that the department is projecting a net revenue drop of at least $4 million to $5 million in this fiscal year.

The cancellation of the Big Ten Conference and NCAA men’s basketball tournaments produced a negative impact, he said.

“Thanks to sound management of our finances over the years, we’re well-positioned to withstand a temporary decline in revenues,” Alvarez said.

But the bigger hit to Badger Athletics could come next Fall, when the school's big-money sport is projected to play.

Ticket sales and media rights for football alone were responsible for 44% of the athletics revenue stream in the 2018 and 2019 fiscal years, so any disruption of the season that’s scheduled to begin Sept. 4 would be highly damaging to the department. The approved 2020-21 budget was for more than $186 million, including more than $46 million in capital projects.

And even if games happen, which would allow the broadcast revenue to keep coming in, Badger Athletics could still take a big hit if large crowds are still not allowed into Camp Randall due to COVID-19, or if many people don't want to be in big crowds on those Saturdays.

That's because in 2018-19, Badger football had $24 million in ticket sales and another $5.35 million in concessions, parking and other game-day sales. That $29.35 million is around 1/3 of the football-related revenue that comes in, and if COVID-19 forces games to be played in empty stadiums, then that income is going to go away.

And as the article above alludes to, UW also relies on seat contributions and related football revenue to pay off the debts for capital upgrades to Camp Randall. This includes the $8.76 million in debt and rental facilities that UW football paid for in the last fiscal year, with $68 million in additional debt needing to be paid off in future years as part of the $78 million renovation of Camp Randall's South End Zone. That project is supposed to have a lot of work done on it this year, and be ready for the 2021 season.

If we're going to see UW football attendance and game-day revenue drop because of COVID-19 concerns, on top of a general decline in college football attendance that was already happening, it makes me wonder if there is going to be a problem having Bucky's books balance in the coming years. And if we're asking this question for a UW athletics program that wins and has big TV money, imagine how bad things might get at Division I schools that weren't getting 75,000 a game for football, and don't have big TV money.

That being said, I signed up for year number 21 of Badger football tickets a month ago, counting on there being a season where fans can attend, and counting on myself wanting to be among thousands at the Camp. But we'll find out in a couple of weeks how many others won't come back for season tickets in these weird times, and seeing what fans will or will not shell out for in 2020 and 2021 is going to be a big test for UW-Madison and many other schools.

Like many things, the COVID recession might kick off changes that leaves the state of play for college sports much different than what we knew it to be in the 2010s.