INSIDE: Facing revenue shortfall, UCF athletics gets larger credit line, loan.
Facing losses of more than $12 million, UCF leaders gave its athletics department a financial lifeline Thursday in deferring loan payments, increasing its credit line and OKing a $3 million loan from the university’s foundation.
The moves come as college athletic programs across the country are upended by the coronavirus pandemic during the fall football season, a big moneymaker for UCF and many universities. UCF is playing fewer games this year, but has been spared from further cancellations seen at some schools — at least 81 football games have been postponed or canceled, according to CBS Sports — and is limiting capacity in its stadium where the final home football game is scheduled for Saturday.
The UCF Athletics Association will have $1 million loan payments deferred over the next two years, it’s revolving credit line boosted from $5 million to $8 million, and also receive an 18-month loan of $3 million under actions approved Thursday by university trustees who sit on the Finance and Facilities Committee.
“We’re already drastically understaffed compared to the level we’re competing at nationally,” Athletic Director Danny White said. “We have been so aggressive with budget cuts. Nobody is doing anything that isn’t absolutely needed.”
The moves came under scrutiny from some on the committee. Trustee Bill Yeargin questioned what the impact would be if the actions were voted down. Athletics officials said results would include a hit to the program’s reputation as well as struggles to cover its bills.
“It would be very difficult to be optimistic if we’re not able to get
this support,” said executive associate athletics director and CFO Brad Stricklin.
In all, the program is facing a $12.7 million loss in revenue due to three fewer home football games and stadium capacity limited to 25%. This comes with more than $1 million in new expenses covering regular COVID-19 testing, as well as cleaning and new protocols for traveling.
The program already froze salaries across the board and had coaches slash budgets by 10%. Stricklin quipped that new expenses are so closely scrutinized that a coach had expensed a $30 yearly planner “and I wondered if he actually needed that.”
To help cover short-term cash flow deficits, the UCF Foundation decided to use $3 million in excess reserves to offer the program an additional line of credit over 18 months, with a 3% interest rate.
They also will expand its credit line through Fifth Third Bank from $5 million to $8 million to help cover pandemic related shortages. But through the American Athletic Conference’s new media rights deal, the program will also receive an additional $3.5 million.
UCF is taking fewer financial blows than other state athletic programs such as the University of Florida and Florida State University, which rely more heavily on gameday revenue. UCF, though, relies on fees paid by the student body for the largest chunk of its revenue.
A budget document shows the department collected about $24 million in student fees charged alongside tuition, one of the lone revenue sources spared from COVID-19.
After receiving unanimous support from the trustees, White said his staff hoped to return with better solutions moving forward.
“We’re going to get to work,” he said.