It’s becoming a pattern. Division I athletic programs are dropping sports as a way to address the looming deficits in their budgets. The University of Iowa did just that on Friday, announcing late in the day that they were eliminating men’s gymnastics, men’s and women’s swimming and diving, and men’s tennis.

It’s a devastating pronouncement for any program, but in the Big Ten, conference members take great pride in providing broad based opportunities for their state residents. With the cuts, the Hawkeyes drop from 24 to 20 sports.

The announcement struck a typical tone, stating “We carefully and thoroughly reviewed all financial options and each of our programs individually. We considered, in part, sponsorship at the NCAA Division I level, impact on gender equity and Title IX compliance, expense savings, history of the sport at Iowa, engagement level, and other factors. With the recent postponement of fall sports and immediate financial impact due to this decision, we believe this path is necessary to strengthen athletics and position our programs for future success with the resources we have.”

But then, under the FAQs at the bottom of the announcement was this bombshell:

“The COVID-19 pandemic has resulted in a financial exigency which threatens Iowa Athletics continued ability to adequately support 24 intercollegiate athletics programs at the desired championship level. In March, the NCAA and Big Ten Conference announced the cancellation of their basketball tournaments and all other competitions for the remainder of the year. On Aug. 11, the Big Ten Conference announced a postponement of fall competitions. Iowa Athletics now projects lost revenue of approximately $100 million and an overall deficit between $60-75 million this fiscal year. A loss of this magnitude will take years to overcome. In collaboration with the Board of Regents, State of Iowa, and University of Iowa President Bruce Harreld, we determined the current circumstances require us to adjust our sports sponsorship offerings.”

What does financial exigency mean?

“Financial exigency means any imminent and extraordinary decline in the University’s financial resources that compels a reduction in the current operating budget to the extent that the University would be unable to meet existing financial obligations that include, but are not limited to, contractual obligations.”

Wait…what?

This is no simple declaration, and to be honest, I’ve only seen it one other time in 2020 when it was written into a coaches contract. It is almost exclusively used to describe an entire college or university in severe financial distress; in the course of my study of higher education and college sports, I have never seen it used in a press release announcing the elimination of sports programs.

To put this in perspective, the Department of Educations’s Equity in Athletics Database reports the following expenses for the sports that were dropped:

Men’s Gymnastics: $184,000

Men’s and Women’s Swim/Dive: $508,000

Men’s Tennis: $218,000

$910,000 in total savings….for dropping 4 sports.

NOTE: These figures represent the team expenses. Since the press release announced the athletes could retain their scholarships and employment contracts will be honored for all coaches and staff, these are the actual savings for 2020-21.

Athletics Director Gary Barta foreshadowed the seriousness of the department’s finances a few days ago when he mentioned that, without the football media revenue, they were projecting a deficit of $100 million. The Iowa Gazette reported that with spring football, the losses would range from $60-75 million.

Oh…is that all?

How did the train go off the track so quickly?

Iowa athletics in 2019 recorded a $15 million gain over their 2018 revenues—an 11% increase. They also showed a $7 million increase in giving (see chart).

According to the Knight Commission Financial Database, football coaching salaries grew from $7.970 million in 2013 to $11.806 million in 2018. These salaries are $2.276 million more than the Big Ten Conference median salaries for football coaches, and $6.527 million more than the median Football Bowl subdivision salaries. This from a team that played to a 9-4 overall record in 2018 (5-4 in the Big Ten).

Iowa also has $209 million dollars in athletic department debt, resulting in an annual payment of $11.2 million to service that debt, the 13th largest amount in all of Division I, according to Sportico.

How does that get to Iowa’s need to address the real deficit of $60 million? or $100 million? How does this announcement address using the explosive term “financial exigency”?

Either I am missing something, or another shoe is about to drop.

The press release ended with this statement: “We are confident these changes, while difficult, create a path forward for Iowa Athletics to remain self-sufficient and allow our remaining programs the opportunity for sustained excellence and fiscal stability.”

Iowa has several options to address this revenue gap:

1. Raise more money from fundraising; (hello, donors?)
2. Establish a line of credit (repayment terms could be problematic with the debt);
3. Borrow from the Big Ten Network (Rutgers and Maryland have been doing this since 2014).

But here’s the real answer—spending on football is out of line, not only as compared to the Big Ten, but to their national peers. When you are faced with a big hole in your finances, the first thing you have to do is stop digging. Football spending is the problem.

Iowa Athletics had no financial reserves and acted as if the media revenues would just keep pouring in. While no one expected a pandemic to upend college sports as this one has, to have the kind of fixed costs (coaching contracts, guarantee games, debt service) that every FBS program like Iowa has, and not have a rainy day fund is malpractice.

Friday’s announcement addressed just $1 million of a $100 million problem- 1%. It begs the question- where is the other 99% coming from?