As the Clemson Athletic Department plans for how it will handle the unknown that is the COVID-19 pandemic, it is attempting to set some guidelines for how it will try to run its athletic programs going forward.
Clemson’s Deputy Director of Athletics, Graham Neff, said Clemson Athletics does have a control budget plan for the 2020-’21 Fiscal Year. It is a starting point, he says, very typical to what they have done in years past where it has some mitigated revenues, ticket sales, licensing and IPTAY as it relates to an assumed economic condition in a little bit of a different world.
“It is not just a business as usual, stick-our-head-in-the-sand kind of budget, but our football, our sport operations and business operations look fairly typical, which is where our hope and anticipation is,” Neff said.
Clemson budgeted its revenue for the 2019-’20 FY at $127 million, according to Neff. The deputy athletic director told The Clemson Insider on Friday they still are estimating a $1 million net loss due to the COVID-19 pandemic, which canceled the NCAA men’s and women’s basketball tournament and all spring sports.
Since 2013, when Neff started at Clemson, the athletic department has nearly doubled its total revenue budget. In 2013, they budgeted $66 million and the athletic department has seen an increase every year since.
That will likely not be the case this year. Neff said, right now, FY ’21 will be set at around $125 to $127 million if everything goes according to plan. In other words, if the school’s campus opens back up and fall sports begin on time and there are no hiccups throughout the course of the year.
“We are not necessarily budgeting scenarios A, B and C and what that looks like,” he said. “We are really developing, call them levers, as it relates to expense planning, expense management plans or even revenue alteration plans. So, now, we will have kind of menu of levers built off revenue scenarios and a menu of levers built off expense scenarios.
“Now, that is going to allow us to buy some time because we don’t necessarily have to have all of those scenarios set by July 1 [the start of FY ‘21]. We have our control budget set. So, from an accounting standpoint, we are kind of able to start the year and once we get into July and August, as we know more about our world and what our business will look like for the next fiscal year, then we will have these levers that are well quantified and well thought out that we can pull from based on what that scenario may be.”
As for right now, Clemson’s Athletic Department is in much better shape than some of its peers because it is one of the few self-sufficient athletic departments in the country, meaning it does not receive a student fee or other revenue from the university.
Clemson is encouraged where they are financially right now if the best case happens and there is a full football season. If that is the case then they are not concerned with salaries being cut or employees having to be let go.
“That is not a near term decision or consideration for us right now,” Neff said. “We feel like there is a long runway as we learn more and more, by the day, of what the impacts may be for the university, but also in our world here in the athletic department.”
However, all of this could change should Clemson University keep its campus closed for the fall semester and there is no football season or if there is a shortened football season.
Neff indicated “everything is on the table” at that point.
Of the $125 to $127 million budget for FY ’21, roughly $28 million comes from ticket sales. Last year, Clemson set a record in season ticket sales with close to 60,000 sold. Clemson is expecting to bring in another $35 to $40 million through IPTAY donations, a lot of which is driven through football. Then there is the ACC distribution, which includes the ACC Network revenue. Clemson is planning another $30 to $32 million there.
ACC Commissioner John Swofford has already said 80 percent of the revenue the conference gets from its television partner ESPN is driven by football.
Clemson’s athletic department does have some reserve funds to pull from. However, strategically, the majority of its $70 million is tied up through the university to help balance the books as it relates to scholarships, facilities, and things of that nature.
“Between the spectrum of those buckets, it is $70 million plus, which compared to our peers is significant and important and a big part of the financial strength that Clemson Athletics has and has built,” Neff said. “We are very strategic with those dollars. It is important that the strategy of those reserves are baked into our business processes so that it is not accessible, it is very strategic and what has allowed it to be built to fuel IPTAY and the athletic department. But then we do have some of the more near term, liquid kind of dollars, as needed when there are deviations to the business such as at hand.”
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