Why Penn State is Unlikely to Follow Stanford in Cutting Sports

Stanford University sounded alarms Wednesday, announcing that it will cut 11 varsity sports after the 2020-21 academic year. For an athletic department that has won 25 consecutive Learfield/IMG College Directors' Cups as the nation's top sports program, that's a stunning decision.

It also caused those who watch college sports closely to worry about the decision starting a wave of such cuts across the nation.

For fans of Penn State sports, which have had significant successes recently beyond football, the next question was clear: Could that happen in State College?

For now, the answer is no, unless something drastic happens regarding football. Stanford and Penn State operate significantly different athletic departments, budgets and campuses.

Though the COVID-19 pandemic certainly can affect all three elements the longer it lingers, Penn State Athletic Director Sandy Barbour has said she has no plans to cut sports.

"Our 31 programs and 800-plus student-athletes is in our DNA. It's part of who we are, and that is certainly not something we're looking at right now," Barbour said during the spring.

Penn State is looking at cost-cutting measures, including pay cuts for coaches and athletics staff, that likely will be announced soon, Barbour said. With regard to cutting sports, though, there are significant budget differences between Stanford and Penn State.

First, note this element of explanation from Stanford's athletic department.

The financial model supporting 36 varsity sports is not sustainable. The average Division I athletics program sponsors 18 varsity sports. In fact, only one university at the Division I FBS level sponsored more varsity sports than Stanford prior to this change, and that institution does so with a significantly larger budget. Many of our peers at the Power Five level are supported by budgets that are much larger than ours while operating far fewer sports. Stanford’s more than 850 varsity student-athletes today represent 12% of our undergraduate population, a far higher percentage than exists at nearly all of our peer institutions.

Penn State sponsors 31 sports that awarded scholarships to 601 student-athletes for the 2018-19 academic year, according to the athletic department's most recent financial filing. Penn State began that academic year with 40,363 undergraduate students at University Park. Scholarship athletes represented about 1.4 percent of the undergraduate population.

Stanford projected a budget deficit of more than $12 million for 2021 even before the COVID-19 pandemic. The athletic department said that revised its revised estimate of a $25 million deficit is a "best-case scenario." Stanford said it would have needed $200 million to continue operating those sports at a "nationally competitive varsity level."

Penn State's athletic department is in a far different position, having generated a $4.2 million surplus during the 2018-19 fiscal year. That left the department with a $12.3 million reserve entering 2019.

Penn State likely will use those reserves to help alleviate the projected deficits it will face this fiscal year. And without football, Penn State's athletic budget becomes significantly less stable.

In FY 2018-19, Penn State's athletic department generated a record $164 million in total revenue. For the first time in school history, the football program topped $100 million in total revenue

Without a football season, Penn State is in a different position.

"We do continue to have a lot of unknowns around what the financial situation would be with some of these things," Barbour said. "We're looking at scenario-planning and looking at what steps we might need to take. But our primary focus is on holding our 31 programs together."

Penn State competes with Stanford in the Directors' Cup, but their budgets in doing so are quite different. So Stanford's decision is not a forerunner to what might happen in State College.

Check back during football season, though.

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