COVID-19 Threatens Virginia Tech Finances Amidst Pandemic Uncertainty
Like every other athletic program that depends on football to keep the lights on, Virginia Tech is undoubtedly worrying about a fall season without the gridiron.
As some states across the country slowly begin reopening businesses, the thought of large amounts of people congregating in confined areas is obviously scary to many. This fear has put professional and collegiate athletics on hold as organizations and institutions scramble for a solution.
Virginia Tech faithful received some clarity on a potential timeline for this decision on Monday, when Virginia Tech president Tim Sands addressed the Tech community in an open letter. Sands’ important statement came later in the letter when Sands announced his administration plans on releasing their strategy in early June.
“This timing is sufficient to allow for fall preparations for students, faculty and staff, while offering the longest possible window during which we may tune our model with the latest information about the progression of the pandemic and emerging best practices for protecting the health and safety of our communities and the individuals who comprise them,” Sands wrote.
Sands went on to project lost revenue totaling anywhere from $48 million to $240 million, a significant portion of a university operating budget that comes in at $1.6 billion.
Virginia Tech athletics is almost certainly headed for a shortfall as well, with expected ticket revenue likely to fall short of projections. As David Teel noted in his April 8 piece for the Richmond Times-Dispatch, Virginia Tech football accounted for 84.4 percent of 2019 ticket revenue and 75 percent of media rights fees. All of Tech’s other sports, not including men’s basketball, combined for a loss of $17.4 million.
Football is king and every athletic department feeds off the blood of the football program. Other schools have already begun taking austerity measures, as Cincinnati completely removed men’s soccer from their program and Louisville has already cut positions from their department. Forty-five employees were furloughed for 60 days and 40 positions were eliminated.
Director of athletics Whit Babcock has made aggressive investments into the Tech program, with numerous facility upgrades and an increase in staffing budgets for the football and men’s basketball programs. Those investments cost money and the department ran in the red for a few of years before returning to a surplus in 2018. Over the last two years, Tech has run a surplus of $7.6 million.
Ideally, the football season starts on time with few fan restrictions, allowing departments to come closer to their original projections for the year. However, nothing about the last five months have been ideal.
Fans must wait it out and let the decision makers come to a reasonable solution. There are many considerations to balance, whether it be the local economy that has already been hit by the absence of students or the local community worried about a spike of COVID-19 infections. There’s no perfect solution to all of this and in the end, whatever path is chosen will be a risk assessment.