Mizzou makes financial changes in midst of COVID-19 shutdown
As fallout from the COVID-19 outbreak continues across the country, the University of Missouri announced financial changes on Tuesday morning. In an email from University System President Mun Choi, it was announced that "The president, chancellors, their cabinet members, and deans are taking 10% salary cuts beginning May 1 through at least July 31."
The email also stated that "many other senior leaders and administrators" have been asked to take 10% pay cuts over the same time period." We reached out to ask what that meant in terms of the Mizzou athletic department.
A department spokesman told PowerMizzou.com that 20 individuals in the athletic department had been asked to participate in taking a 10% cut. They have a week to respond with their intentions. Director of Athletics Jim Sterk is included in the directive as part of the Chancellor's cabinet. Sterk makes $700,000 per year on a seven-year contract. The other 20 individuals are "a combination of coaches and staff." The specific individuals included are not known to PowerMizzou.com at this time.
Some of these decisions must be made in the next two weeks to address the 2020 Fiscal Year budget. The email from Choi stated that the school would remain on a 60- to 90-day timeline and would revisit the situation in July.
Choi stated during a meeting of the Board of Curators recently that the impact of the closures and cancellations due to the virus could reach $180 million across the four universities in the system. The main Mizzou campus has already moved all classes online through the summer session, which runs through the end of July. The school also returned approximately $25 million to students as refunds on housing that went unused when campus began to shut down in mid-March.
The next major question from an athletics standpoint is what will happen to football and other fall sports.
"The SEC is getting input from those coaches on what does the buildup look like for those sports to occur?," Director of Athletics Jim Sterk told reporters on April 2nd. "We're planning on the season happening and I'm just not gonna really get into the speculation phase."
While no determination needs to be made immediately, administrators across the country are addressing all possibilities. Sources have told PowerMizzou.com that games with no fans or limited fans, a delayed start to the season, elimination of non-conference games and even pushing the season into the spring are scenarios that have been discussed among the SEC directors. Specific to athletics, if football season is impacted, the financial ramifications will be potentially devastating across the country.
In the most recent reports available, covering the year from July 1, 2018 to June 30, 2019, Mizzou athletics operated at a $1.7 million deficit. The revenue, according to figures obtained by the St. Louis Post-Dispatch, came in at $106.6 million. Of that amount, approximately $16.2 million--slightly more than 15% of the total revenue--came from ticket sales. Mizzou expects those numbers to go up slightly for this fiscal year due to an increase in football attendance last season and more than $600,000 generated from alcohol sales at games.
Also looming on the horizon is the estimated loss of $8-10 million as a result of NCAA sanctions levied against the University. That loss will hit at some point in the next year-and-a-half. In November, the plan was to have the University help the athletic department through that loss with a loan.
“We will help the athletics department to get through that, and most likely through a long process,” said then-Chancellor Alexander Cartwright, who has since left for UCF. With Cartwright's departure, Choi is currently serving as both President and Chancellor, though he has not taken a salary increase.
“It will be a pay-back method,” Sterk said of the school's assistance. “The athletics department did it with the move from the Big 12. Similar to that.”
Whether that process will change over the coming months is one of many questions Mizzou--along with athletic departments across the country--will have to answer.