Dire scenarios (Clemson)

https://www.bloomberg.com/news/articles/2020-04-20/collapse-of-sports-brings-dire-scenarios-to-schools-like-clemson?srnd=premium
For a snapshot of how U.S. universities are coping, look no further than Clemson -- the only school to participate in each of the past five College Football Playoffs -- where athletic officials are hoping for the best but also planning for the worst.
At its most optimistic, Clemson sees a revenue drop of about $7.5 million, a manageable hit on a sports budget that grew to $132 million last year. From there, administrators turn to more dire possibilities: a partially disrupted college football season or, in the worst case, one that doesn’t happen at all.

Clemson’s fiscal year starts in the summer, as is typical of universities, so budgeting for the 2020-21 school year is in full swing. And for everyone in higher education, the pandemic’s impact is top of mind.

Clemson has seen its athletic budget soar 60% in the past five years. The money comes from four main revenue sources: ticket sales, donations, media rights, and licensing and marketing.

Roaring Tigers

Football success has filled Clemson's coffers

Source: Clemson University

Clemson’s “control budget” is built for a world where the virus outlook improves so much that football games are allowed to proceed as planned this fall. Even then, Neff said that scenario anticipates a 10% drop each in donations, ticket sales and marketing revenue. All told, it would be a $7.5 million hit.

From there, the school moves toward more drastic scenarios. A “sensitivity budget,” Neff said, might assume a 20% reduction in those main revenue sources, so a drop of around $15 million. Further down the road, the school will look at the larger loss scenarios if football can’t happen.

Schools around the country are weighing the same factors. The University of Minnesota this month released its projections for its athletic department, which is roughly the same size as Clemson’s. Minnesota’s estimates were a $10 million hit in the “best case,” $30 million in the “moderate” scenario and $75 million in the “severe.”

The Revenue Pie

The Clemson Tigers make most of their revenue from four sources

Source: Clemson University

The athletic department also has about $70 million in reserve, which can help offset some damage but won’t be the sole line of defense. Insurance policies, covering losses such as game cancellations, are generally held at the conference level.