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Penn State athletics ended up with small profit in fiscal 2020-21 plagued by COVID | Jones

PennLive.com logo PennLive.com 5/12/2022 David Jones, pennlive.com

After all the hand wringing and doom-saying at this time two years ago, it appears that Penn State University athletics managed to turn a profit in fiscal 2020-21. A mid-6-figure one based on miniscule revenue by traditional standards, but a profit, nonetheless.

Thanks in part to some well-publicized belt tightening and reduction in salaries, PSU managed to eke out a surplus of $587,710 across all sports and campuses, according to figures recently published by the U.S. Department of Education. Expenses of $130,924,694 were more than matched by $131,512,404 in revenues.

The figures are notable in that they encompass the most volatile period of the Alpha and Delta variants of the COVID-19 virus that greatly restricted spectator involvement during the 2020 football and 2020-21 men’s basketball seasons, the chief profit-makers for major university athletic programs. Though compensation for television and streaming rights have accounted for a greater share of overall revenue in recent years, live gate and related profit sectors – ticket sales, seat licenses, concessions, parking, licensed merchandise – still account for a significant portion of business, much of which the major programs had to do without in fiscal 2020-21 (07/01/20 – 06/30/21).

Football accounts for most of the gross revenue and profit accrued by virtually all of the 130 Football Bowl Subdivision (FBS) athletic programs, especially those from the so-called Power Five conferences (Big Ten, ACC, SEC, Big 12, Pac-12), and schools with popular football teams like Penn State in particular.

Comparing the 2020-21 PSU football budget with fiscal 2019-20 illustrates just how profound was the reduction induced by COVID restrictions at Penn State. PSU football gross revenue plunged by more than 50 percent from the prior fiscal year – $101.7 million to $47.2 million. Expenses dropped from $50.6 million to $33.1 million. Net profit dropped from $51.1 million to $14.1 million.

Considerably easing stress for Big Ten members is the annual allocation for media rights (television/streaming), published as approximately $53 million per school in 2020, the 4th of a 6-year, $2.6 billion deal signed by outgoing commissioner Jim Delany in 2017 with FOX Sports and ESPN.

That boost will rise by about 25 percent next year. According to several reports last week originating from Sports Business Journal, the Big Ten is closing in on a new media-rights deal worth approximately $1 billion annually that would distribute shares of about $71 million per B1G member each year beginning in 2023.

All of the above explains why several Big Ten members protested when new commissioner Kevin Warren originally called off the season in August 2020, only to do an about-face amid the uproar days later. The league then announced an abbreviated league-only schedule, about a third of which was subsequently canceled due to COVID protocol.

But the majority of it was played, even if it was before hundreds of live fans rather than tens of thousands. And it was televised which fulfilled terms of the lucrative contract. Had it not been, each Big Ten athletic department could’ve ended up tens of millions in the red for the year.

Considering how slim a live gate the PSU men’s basketball team usually gets during a normal season, the pandemic had a relatively slight effect on the bottom line. Gross revenue totaled $9.7M in 2020-21, down from $10.5M in 2019-20. Expenses were $7.6M, virtually the same as the $7.5M of 2019-20. That left profit of $2.1M, down about a million from the previous year’s $3.0M.

The women’s basketball program, notorious for burning through $4-to-5 million annual deficits under Coquese Washington, again held expenses down in coach Carolyn Kieger’s second year. The Lady Lions’ expenses were just under $4 million in 2020-21 (down from $4.6M in 2019-20 which was already down from $6.1M in Washington’s final year in 2018-19). Gross revenue was $1.3M, leaving the 2020-21 deficit at $2.7M.

Due to a bookkeeping change mandated by the Integrated Postsecondary Education Data System, Penn State included athletic budget figures from its 19 branch campuses along with its main campus revenues in the same report without separate itemization.

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