Iowa, Michigan Announce Changes to 2020-21 Budgets

As news of budget cuts is trickling out about universities nationwide amid the COVID-19 pandemic, two Big Ten schools released upfront announcements about theirs on Wednesday.

Iowa

The University of Iowa announced a $15 million reduction to its athletics budget for the 2021 fiscal year. In 2020, the athletics department budget was $124.8 million. The 2020-21 budget was anticipated to be $127.5 million prior to the reductions, and the new proposed budget proposal will be $112.5 million. The $15 million reduction includes nearly $13 million in reduced operating expenses, the school said, with the remaining in compensation adjustments.

Cuts to salaries and compensation are being spread across the department, the school said.

Professional and Scientific, non-contracted, staff will get a one-year salary reduction based on a graduated salary reduction scale. Generally, staff earning above $200,000 will get 10% base salary reduction, staff making $150,000-$199,999 a 7.5% reduction, salaries of $100,000-$149,999 a 5% reduction, $50,143-$99,999 a 3% reduction, and staff making below $50,143 a 2% salary reduction. Merit employees will participate in the budget reduction process through utilization of unpaid leave days in either six – or eight-day increments. Contracted employees were asked to participate in a voluntary salary reduction or contribution back to the department.

Specifically, head coaches Lisa Bluder (women’s basketball), Tom Brands (wrestling), Kirk Ferentz (football) and Fran McCaffery (men’s basketball(, have voluntarily agreed to a one-year, 15%  base salary reduction or contributions back to the athletics department. Deputy Athletics Director Barbara Burke will take a 25% salary reduction, while Director of Athletics Chair Gary Barta is reducing his total compensation package by more than 30 percent.

The current reductions assume complete football and basketball seasons happen with fans in attendance, the school said. Any interruptions or reduction in these seasons would lead to more significant cuts.

Since bringing some athletes back to campus, Iowa has announce 17 positive results in its COVID-19 testing (408 total tests). The school’s football team started to return to campus on June 8, and men’s and women’s basketball players arrived on campus June 15.

Michigan

The University of Michigan expects a budget surplus of $1 million for the current fiscal year, and due to the pandemic, projects a budget deficit for the coming fiscal year, it announced.

For 2020, the athletic department projects operating revenues of $187.4 million and operating expenses of $186.4 million, with the surplus due to reduced operations and team activities. For fiscal year 20201, the department projects operating revenues of $135.8 million and projected expenses of $161.9 million.

Michigan provided the following information about the projected budget:

  • Spectator admissions revenues are projected to decrease 50 percent between FY2020 and FY2021. It is important to underscore that this is a projection, with no final decision by the time of the June budget deadline.
  • In responding to the pandemic, expenses have been reduced in all areas except for an increase to student-athlete financial aid. That category will see an increase of $0.8 million primarily due an increase in the number of student-athletes remaining on scholarship following the cancellation of the 2020 spring athletic season and anticipated increases in tuition.
  • Team and game expenses are projected to decrease $6.5 million between FY2020 and FY2021 as a result of various expense reduction initiatives.
  • Salaries, wages and benefits are projected to decrease $6.0 million between FY2020 and FY2021 due to various expense reduction initiatives.

Additionally, as part of expense-reducing initiatives, a number of senior administrators and high-paid coaches (including football coach Jim Harbaugh, the third-highest paid coach in college football) are taking 10% salary cuts. Full-time staff members earning between $50,000-$100,000 will have salaries reduced by5% and employees earning between $100,001-$150,000 will have wages reduced by 7.5% during. Staff earning less than $50,000 will not see any reduction in pay.

Michigan began letting football, men’s basketball and women’s basketball players to return to campus with protocols in mid-June. In order to begin working out, players have to take a COVID-19 test and go through a six-day “resocialization” period — in June, the school announced that two student-athletes had tested positive.

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