The Atlanta Journal-Constitution
» AD asks alumni, fans to help Tech bridge financial gap,
Facing the potential loss of a quarter or more of his department’s anticipated revenues, Georgia Tech Athletic Director Todd Stansbury has called upon alumni and fans to help bridge the gap.
“We’re reaching out to all of our donors, our ticket holders, our fans, and we’re essentially asking them to put us in a position so that we can maintain the momentum that we’ve been able to build over the last three years,” Stansbury said Friday on a videoconference call with media.
That Stansbury, who typically keeps a low media profile, arranged the call to publicize the department’s “Support the Swarm” campaign underscores the urgency of Tech’s financial need. Stansbury’s last media interview took place in late May.
The specter of COVID-19 has turned an anticipated $20 million to $25 million revenue stream tied to football ticket sales into a question mark because of uncertainty over games being played and stadium capacity limits.
Stansbury’s plea echoed those of athletic directors across the country feeling financial pressure of potentially losing the financial driver that is football. Stansbury acknowledged that he and his colleagues are in a position of “not really knowing what’s going to happen, how many games we may play and what the capacity of our stadium is actually going to look like.”
In June, Tech approved a budget for fiscal year 2021 that projected $13 million in ticket sales out of a total revenue projection of $81 million. It was a drop of $7 million from the department’s ticket revenue in the previous fiscal year.
As it turns out, the $13 million projection may be optimistic. That number was generated from a model that capped attendance at Bobby Dodd Stadium at 50% for social-distancing purposes, as well as no change in attendance in ticket sales for winter and spring sports. On Friday, Stansbury estimated that stadium capacity will be “probably anywhere from 15 to 30%, somewhere in there.” Beyond that, the projection counts on a full season actually being played.
There’s also the possibility that payouts from ESPN may be reduced if the league cannot deliver a full season of games. Tech’s budget is counting on $33 million in ACC distributions, much of it passed along from ESPN. Stansbury said he didn’t know how an incomplete season would affect TV money distributions.
“One of the reasons that we did a 10-plus one (schedule model, meaning 10 ACC games plus one non-conference game) was really to put us in a position to fulfill our television obligations, so that’s the intent going in,” he said.
Hence, Stansbury’s queasiness over an impending financial trial. While the athletic department is completing a $125 million capital campaign, those gifts cannot be used to cover budgetary shortfalls, as they are earmarked for other purposes. Likewise, endowment money generally has designated targets and can’t be redirected.
The campaign’s plan is to convince season-ticket holders and single-game purchasers to exchange their payments for tickets into straight donations if games aren’t able to be played, or if stadium-capacity limits or health concerns prevent fans from attending. Having more certainty over the budget can help Stansbury figure out how much needs to be pared.
Asked whether cutting a team were a possible solution if the finances remain in critical condition, Stansbury didn’t directly answer the question, though a more likely outcome might be reducing staff or operations that don’t directly impact Tech athletes.
Just as Stansbury and chief financial officer Marvin Lewis are making financial models based on different stadium capacities, “we’re also modeling what does our program look like if we don’t reach certain thresholds in those revenue streams,” Stansbury said.
The financial pressures illustrate again the dependence of the college athletics industry on football, even in the midst of a pandemic that has led lower-tier leagues to cancel their seasons. Stansbury said that no Tech athletes had elected to opt out of competing this academic year because of health concerns.
“I just know that, with the student-athletes that I’ve interacted with and seen, they are just so glad to be back and getting ready to do what they love to do,” he said. “But that’s not to say that there won’t be some that decide to opt out.”