Penn State Athletics Generated Revenues of $164.6 in Fiscal Year 19-20

Despite the spring sports shutdown, Penn State was able to add to its Athletic Department's financial reserve.
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Penn State's athletic department added nearly $2.4 million to its reserve fund this year, a helpful measure as it faces budget constraints due to COVID-19.

Athletic Director Sandy Barbour told the Board of Trustees' Committee on Finance, Business and Capital Planning on Thursday that the department ended fiscal year 2019-20 with a reserve fund of $15.7 million. That represents a 17.5 percent increase over the previous year.

Barbour said the reserve would help Penn State budget for projected losses based on the shutdowns of the spring and fall seasons. Barbour has said that the athletic department could face a $100 million revenue loss without a 2020 football season.

It's unclear how the Big Ten's planned football restart will affect those projections.

"We have acknowledged that that dependence [on external revenue] and the pandemic and the stoppage of play and associated revenue reductions, primarily through TV and tickets, has played out for us here," Barbour told the committee. "Fortunately, through the improvements in our financial situation over the last six and a half to seven years, we were in a position to have some modest reserves that will help mitigate the situation. But it does highlight the need for healthy reserves for all the reasons that we historically talked about."

Penn State's athletic department reported revenues of $164.6 million in fiscal year 19-20, which ran from July-June. Barbour said the revenue total was $3 million lower than projected. The department also reported $158.3 million in expenses for a year-end surplus of about $6.3 million.

Barbour said Penn State reduced expenses through cost-saving measures early in the spring sports shutdown and decreased travel. The department has instituted pay cuts, and Barbour said she has reduced her salary by 15 percent. Barbour also has said that the athletic department might seek a loan to help cover projected losses. 

In a presentation to the committee, Barbour highlighted that Penn State's athletic reserves have more than doubled since fiscal year 16-17, when they were about $7.2 million. Penn State has added more than $8.5 million to its athletic reserves the past three years.

"Certainly as we think about moving forward, looking at our five-year [budget] model, we will certainly need it [the reserve]," Barbour said.

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