Pac-12 prepared to take out "massive" loan to save conference athletics
If college football is canceled this upcoming fall, there is no way of knowing how that will substantially impact the rest of the college athletics for the remaining academic school year and more.
According to Jon Wilner of The Mercury News in California, the conference plans to use a “mammoth loan program” to “rescue cash-strapped” athletic departments if the 2020 college football season is canceled either before or during the season.
According to Wilner, each of the conference's 12 universities would be eligible for an $83 million loan if the 2020 football season is canceled. The loans would be set with a 3.75% interest rate over the next 10 years.
Due to the COVID-19 pandemic ravaging the world, college football has become a necessity considering how much money it brings in for the rest of college athletics. But if the season is canceled, there will massive shortages and a major fallout for the rest of collegiate athletics, possibly canceling them altogether regardless of whether or not it is safe to play.
The slate of loans could help universities avoid major revenue shortfalls in 2020 and beyond. Football programs across the Pac-12 generate "in excess of $50 million dollars in ticket sales and media rights," each year.
“All loan capacity is being used for things besides athletics," a source told Wilner. "They’re trying to get the core (academic) programs through for the next three years without firing people. If people have debt capacity, they should use it."
Not every university is required to take part in the loan program — and it's believed that USC and Stanford will not. It's also expected that not every university will use all of the $83 million in the loan, with some taking significantly more money to just get by for the upcoming academic year.
“The conference is trying to be nimble and give schools some options,’’ a source told Wilner. “All loan capacity is being used for things besides athletics. They’re trying to get the core (academic) programs through for the next three years without firing people.”
As part of Wilner's research, he found that the Utah football program brought in $66 million during the 2019 fiscal year. That equates to roughly two-thirds of the total revenue generated by Utah's athletic department
The Pac-12 announced on July 31 that it will go to a 10-game conference-only regular season schedule for football. Utah is set to open its season on Sept. 26 against Washington State in Pullman, Washington.
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