West Michigan colleges and universities grapple with unpredictable athletic budgets – MiBiz: West Michigan Business News

Late last year, the Cornerstone University athletic department announced the addition of men’s volleyball to its collection of sports programs, as well as plans to renovate a couple of its athletics facilities.

With renovations in full swing and a newly signed men’s volleyball coach, operations came to a standstill in the middle of the spring sports season as the COVID-19 pandemic hit, and it’s been like that ever since.

“From the standpoint of planning, you always plan for the worst in college athletics and with small colleges or even in business, but now a lot of those plans are coming to reality,” said Aaron Sagraves, athletic director at Cornerstone. “I’ve been thankful to our leadership staff and our coaches for being this open to change. Once you overcome the idea that (operations) are going to look different, that helps. Then you can move forward.”

Indeed, college athletics will look different this fall, but with the severity of the COVID-19 pandemic ebbing and flowing, it’s hard to tell exactly how different.

Just like their professional and semi-professional counterparts, the athletic programs at colleges and universities throughout West Michigan have seen unprecedented disruptions.

However, not all these struggles are equal. While Division 1 programs are left to rectify large budgets that are fueled heavily by external revenue — boosters, broadcasting deals, sponsorships and ticket revenue — the smaller programs around West Michigan grapple with these problems on a smaller scale.

“I think the way that we’ve approached it is that, ‘Hey, we’re doing pretty good right now,’” said Sagraves, whose operations are mainly fueled by tuition dollars. “We’re really thankful for the outlook of our incoming freshman class (size) and the retention for our students coming back. I think it’s looking really good. I’m looking forward to seeing what this fall brings as long as something doesn’t happen, which we’re also preparing for.”

As dictated by the National Association of Intercollegiate Athletics (NAIA), Cornerstone cannot conduct team activity until Aug. 15. Athletes are permitted to organize their own practices, but coaches cannot be involved. General conditioning and training is also allowed.

The first fall competition for Cornerstone is slated for no earlier than Sept. 5 and all sports will see a slightly abbreviated schedule. These are universal measures that programs at all levels are handling.

Facility rentals a major blow

Facility rental and team camps are a big revenue driver for programs like Cornerstone. With gyms remaining closed indefinitely around Michigan because of an executive order from the governor’s office, facility rental is an opportunity that has been completely lost.

“We’ve lost the entire month of June from a rental perspective,” Sagraves said. “It’s usually one of our biggest months. We’ve got kids and tournaments — it’s just packed all summer long — and we haven’t had that the entire month. We’re hopeful to get back out in July.”

Even for a program with a higher profile like Division 2 Grand Valley State University, this is a source of revenue that drives not just the program as a whole but also individual teams.

“Shutting down our facilities and camps is a $900,000 loss just in this year,” said GVSU Athletic Director Keri Becker. “That will certainly have an effect. We’re asking (coaches) to go through an exercise, where they’re — as of today — building their budgets based on their big buckets of expenses (travel, officials and uniforms) and then we’ll figure out the shortfalls. Then, we can figure out how to fill the gaps, hopefully with money that I have — discretionary money as an AD.”

While Division 2 athletics are still not very reliant on external revenue, GVSU has spent the last decade and a half elevating itself into somewhat of a Division 2 powerhouse. This higher profile has made ticket sales and sponsorships a significant source of revenue.

The football program generates the lion’s share of that revenue segment. This includes ticket sales and sponsorships that come with visual advertising in Lubbers Stadium, which seats 14,000 fans.

But this fall, those 14,000 fans could be more like 4,000 fans — or even worse, no fans.
Becker has built budgets that plan on 50 percent of expected revenue for sponsorship advertising and ticket sales, knowing that reality has the potential to be far bleaker.

“I’m building my budget based on 50 percent reduction on those buckets,” she said. “That means we’ll still have some capacity somewhere. But I haven’t built a budget based on zero percent. I’m trying to be cautiously optimistic.

“I talked to my vice president, and if we get to that space where we get worse than what we think, then I’m going to have to start getting a little deeper into some places that I don’t want to go, and that’s people.” 

WMU trims $6 million

Western Michigan University Athletic Director Kathy Beauregard has been tip-toeing around the proverbial minefield that is a $6 million athletic budget reduction for the year.

This was a byproduct of a projected $88 million budget deficit for the university, which prompted 20-percent cuts across the board.

The school’s athletic department also missed out on around $1.5 million that was to be paid out by the NCAA. The NCAA allots certain amounts of money to member schools and their conferences, generated by big money makers like the NCAA men’s basketball tournament in March, which was canceled this year.

“This was worst-case planning to cover the fiscal year this year and to also look at what may be potentially coming in the fall,” Beauregard said of the cuts.

WMU’s counterparts at Central Michigan University and Eastern Michigan University have both recently dealt with anemic budgets by cutting sports programs.

CMU recently announced it would cut men’s track this year because of budgetary constraints related to the COVID-19 pandemic. The Detroit News reported that the move would save CMU $600,000.

Unrelated to the pandemic, EMU cut softball, wrestling, men’s swimming and women’s tennis in March 2018 to address budgetary issues.

Beauregard had gone through the process of cutting a sport — men’s track in 2003 — and said she was devastated by it. She and her team have worked to forge ahead without such drastic measures, but Beauregard expects to see more of that happen on a nationwide scale as the pandemic crawls along.

WMU has taken small steps to ease the budget — less travel and time on the road (WMU basketball was scheduled to travel to Hawaii this year), amended schedules and more.
However, with roughly 84 percent of the budget going to staffing and scholarships, Beauregard said that staff cuts and adjustments to the current scholarships are where the program made up most of its fiscal ground on the heels of the cuts.

Football season will be crucial for WMU, with home games played at the 30,000-capacity Waldo Stadium and a road game at Notre Dame University, which guarantees WMU a $1.15 million payout.

Beauregard and her team continue to plan out the best ways to keep fans socially distanced and in compliance with safety recommendations when and if they visit campus.

“We lowered our revenue projections based on not having full houses or not having a potential game in particular,” Beauregard said.

With health guidelines changing seemingly every week, all the athletic directors that spoke with MiBiz echoed the fact that they focus on planning with the information they have in front of them right now.

“You have to plan with the information you know now … but give yourself some decision-making space, just the ability to pivot,” GVSU’s Becker said.

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