Ohio State faces $110 million financial blow without 2020 football season
The cancellation of the 2020 football season last week left Ohio State without an opportunity to contend for a national championship in 2020, avenging last season's postseason heartbreak.
Coach Ryan Day felt the disappointment, referring to the Buckeyes as a potential “once-in-a-lifetime team.”
But the magnitude of the decision by the Big Ten to call off games because of the coronavirus pandemic extends beyond the field.
The Ohio State athletic department could lose as much as $110 million in revenue without a football season in the next year, according to a Dispatch analysis of the school’s most recent financial reports submitted to the NCAA.
The tens of millions of dollars generated by football make up more than half of the department’s annual operating revenues.
Before the cancellation, Ohio State already was looking at a steep drop in revenue. With social-distancing guidelines in place, it planned to limit fan attendance for home games, restricting capacity to 20% at Ohio Stadium.
The action would wipe out much of the school’s income from tickets, parking and other game-day sales that include concessions, food items and programs, totaling more than $55 million per season.
Ticket sales stand as the biggest revenue source for Ohio State’s athletic department, which benefits from playing in one of the country’s largest stadiums; Ohio Stadium holds more than 100,000 spectators.
Other millions from appearances in bowl games, along with the College Football Playoff, also are at stake. But football’s status as a cash cow is also owed to the TV contracts that have grown more lucrative for major conferences over the past decade.
The Big Ten’s six-year deal with ESPN and Fox Sports signed in 2017 meant millions for OSU in media rights. It reported $45.6 million in media revenue in the 2019 fiscal year, including $34 million made from football. The rest was tied to men’s basketball.
Ohio State and other conference programs might miss out on most of that if Big Ten games are not held in early 2021 as part of a rescheduled spring football season.
“Ohio State may see half of that,” said Patrick Crakes, a sports-media consultant and former Fox Sports executive. “Theoretically, they could see zero because that's the deal. Will that happen? My gut tells me no.”
Crakes, who worked at Fox when it negotiated the current agreement with the Big Ten, believes schools will see some income from the networks, distributed via the conference.
Both ESPN and Fox are incentivized to be good TV partners ahead of potential future renegotiations, and thus could issue a payout of some size rather than lean on strict contract language. That would allow Big Ten schools to avoid losing all TV revenue.
“I think they will get something,” Crakes said. “I just don’t think they’re going to get everything. The question is, what is the something?”
Other measures that could allow OSU to recoup revenue involve forms of philanthropy. In a letter to season-ticket holders last month, the university asked them to consider converting their ticket deposits and parking payments into donations for the athletic department.
An Ohio State spokesman did not immediately respond to an email asking about the number of fans who agreed to take such a step.
Ohio State has not provided an official forecast of the financial impact from the absence of a 2020 football season, or for one staged in the spring. The athletic department had instituted an interim budget for the first two months of the 2021 fiscal year, which began in July.
In an interview with The Dispatch less than 10 days before the Big Ten canceled the fall season, athletic director Gene Smith declined to address specifics concerning the budget for the remainder of the year, but had previously hinted at cost-saving measures that would be put in place to cover lost revenue.
No football season automatically means some reduced costs, including no away game travel expenses or coaching performance bonuses. But the department might need to take further steps, including salary reductions for multimillion-dollar coaches or staff cuts, prospects that Day said he discussed with Smith just hours after the fall season had been scrapped on Aug. 11.
“We’re going to get in line with Gene and the university to make sure that we do everything we can to make sure that we’re whole financially,” Day said. “All things are on the table right now.”