Pay Reductions 'Probably Unavoidable,' Penn State AD Says
Penn State expects to take several cost-cutting steps, including salary reductions, to help offset an anticipated 2020-21 budget deficit, athletic director Sandy Barbour said.
Barbour said those salary reductions are "probably unavoidable" as the athletic department seeks to navigate a 2020 football season with fewer games, reduced or no crowds, or perhaps even no football, because of the COVID-19 pandemic.
"We've had conversations with our coaches and our leadership team and, to a man and a woman, they're prepared to step up and help with this cause, should that be the case," Barbour said in a recent video call with reporters. "And I think at this point it's probably safe to say that will be the case."
Barbour said in May that she expected that Penn State would conclude the 2019-20 fiscal year "in good shape" despite the spring sports shutdowns. Penn State's fiscal year ended June 30.
The athletic department, which is self-funding, carried a $12.3 million reserve following the 2018-19 fiscal year. It finished that year with a $4.2 million budget surplus.
Football, of course, carried that budget, generating nearly $54.3 million in revenue for fiscal year 2018-19. That included $36.8 million in ticket sales.
Penn State has not announced results from its last fiscal year, but Barbour said that the projected shortfalls, coupled with the expected loss of football revenue, will require cost-cutting measures to offset.
Several Power 5 athletic departments already have announced pay cuts for coaches and staff. Barbour said that she waited to make such decisions. Penn State has not furloughed any employees in the athletic department.
Barbour added that she expects to take action "within the next few weeks." The athletic director has said previously that she does not expect to cut any of Penn State's 31 varsity sports teams
This week Stanford announced that it will cut 11 teams following the 2020-21 academic year. That includes men's volleyball, which defeated Penn State for the 2010 national championship.
"I had this conversation with [staff members] in mid- to late- April that, with so much uncertainty about our financial position, frankly I didn't want to ask for too much and I also didn't want to ask for too little," Barbour said. "Because I didn't want to say, 'Let's do 5 percent,' and then come back in July and say, 'Guess what? I need 10?' That's why I hesitated to nail anything down. To be fair to our employees, I think the time is coming."
Football coach James Franklin signed a new six-year deal in December worth a guaranteed $35.4 million. In May, Franklin said that he and his wife Fumi were planning an as-yet-unannounced gift to the university that would 'impact students from a scholarship standpoint."
"There's always a concern about financial implications," Franklin said recently. "As a football coach at Penn State, you always carry a little of that weight on your shoulders, that pressure on your shoulders, because you know that the success of football will rise all boats in the athletic department and obviously has an impact on the community.
"Everybody is aware of that and everybody is sensitive to that, no doubt about it."
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