Wisconsin athletics covers budget deficit with $ 20 million interest-free campus loan – thereporteronline
The final report will show that the University of Wisconsin’s sports department even came out financially from the 2020-21 school year which was rocked by the COVID-19 pandemic.
It’s because of a $ 20 million loan from the central campus to balance the budget.
Athletics financial director Adam Barnes said the athletics department borrowed from the school, with repayment expected over six years. UW spokesman John Lucas said there was no interest involved.
The loan will be added to the revenue column in athletic department records filed with the NCAA for the 2020-21 fiscal year, Barnes said, and will result in a surplus of approximately $ 68,000 on records.
UW posted pre-loan income of $ 76.4 million and expenses of $ 96.3 million last year for a net negative margin of $ 19.9 million, Barnes told last week at UW Athletic Board Finance, Facilities and Operations Committee.
Income without the loan was down 38% from the 2019-2020 figure and 45% from what was originally budgeted for 2020-21.
Faced with declining income during the pandemic, some sports departments have benefited from federal economic aid channeled through schools, Sportico reported in August. This does not appear to be the case at UW.
Lucas said the loan money came from campus operating reserves but could not provide a specific source of funding.
âThe university is a significantly large operation that has a certain level of cash flow that would be able to adapt to a situation like this,â he said.
UW had initially forecast a much larger athletics operating deficit for 2020-21, when it lost all of its ticket revenue – initially forecast at over $ 34 million. Last january, overall expenses were to exceed income by $ 47 million. The estimated deficit was reduced to $ 35 million at the end of March, after UW received more money than expected from Big Ten TV rights and cut spending more deeply.
The sports department explored options for borrowing from outside sources when it became clear in 2020 that its main sources of income were going to be disrupted. But these loan agreements are not allowed by state law, something UW officials lobbied for change.
The shortfall was ultimately less than $ 20 million due to a âshared sacrificeâ by employees in the form of time off, pay cuts and a hiring freeze, Barnes said. Travel costs have been reduced, he said, impacting the team, recruiting and business travel.
Finance Committee Chairman John Schaefer, Chairman and CEO of Fleet Farm, said the loan to be only $ 20 million was a “huge victory” for the sports department in a difficult fiscal year .
âI want to commend the entire sports department for doing all of these little things you need to do to maintain the student-athlete experience, maintain the integrity of the university, and do it under fiscal restraint. and severe monetary policy, âhe told the conference. September 23 meeting. “I don’t think that can be said in many places in the United States.”
Not including money for capital projects, UW included nearly $ 140 million in spending in the original 2020-21 budget that was approved by the Sports Council weeks before the pandemic hit and the planning does not become obsolete.
The board of directors last April approved a budget of $ 129 million for 2021-2022 this indicated conservative estimates on the rebound in revenue streams, but also optimism that most of its trading would be close to normal.