Conference moves to help offset losses related to virus

The Pac-12 has taken additional steps to offset the financial damage inflicted on athletic departments by the coronavirus pandemic, commissioner Larry Scott told the Pac12 Hotline.

The moves include tapping the conference’s emergency reserves and extending salary cuts for Scott and his senior executives through the 2020-21 fiscal year — a combination intended to bolster budgets after the spring shutdown and to provide short-term support in the face of mighty headwinds.

Athletics departments could lose of tens of millions in revenue this fall due to a disrupted football season, limited ticket sales or changes to agreements with apparel companies or multimedia rights holders.

Preparations for a delayed or altered season are underway as the pandemic spikes across the conference and the country.

Anticipating the reduced revenue, Pac-12 presidents and chancellors have approved a budget for fiscal year 2021 that includes a nine percent reduction in expenses in San Francisco in order to free up additional cash for distribution to the campuses. How much?

In the 2018 fiscal year — the last reporting period for which there is publiclyavailable data — the conference office reported $40 million in expenses.

Using that as a baseline, the 9 percent cut would result in approximately $3.6 million in savings.

Within that reduction in expenses are the salary cuts.

Scott, who earned $5.3 million in the latest available reporting year, took a 20 percent pay cut for the final three months of FY20, while senior staffers

in both the conference and networks divisions accepted 10 percent reductions.

Those cuts have now been extended through the 2021 fiscal year, albeit at different rates, to help meet the nine percent overall reduction approved by the presidents.

Scott said he will take a 12 percent salary cut — that translates to $636,000, based on his reported compensation — and that senior executives would accept tiered reductions down to 5 percent.

The moves reflect cuts on the campuses.

“We were asked by our schools to look at what they were doing and adopt a similar policy,’’ Scott said. “The CFOs came up with the methodology.”

Scott’s 12 percent cut tracks with the median reductions by Pac-12 presidents and chancellors.

At the top end, with 20 percent reported reductions, are the private school presidents, USC’s Carol Folt and Stanford’s Marc Tessiere-Lavigne, and one public school boss, Arizona’s Robert Robbins.

Oregon president Michael Schill reportedly is taking a 12-percent cut, while reductions for UCLA’s Gene Block, Cal’s Carol Christ and Washington State’s Kirk Schulz are 10 percent; Colorado’s Phil DiStefano’s reported reduction is five percent.

Utah, Arizona State and Oregon State, which is changing presidents, have not announced salary reductions for their presidents.

Scott is the highest paid commissioner in the country and one of two within the Power Five known to have taken a salary reduction during the pandemic.

(The Big 12’s Bob Bowlsby, who earns about

$4 million, reportedly has taken a 10 percent cut.)

The five percent reductions for Pac-12 senior executives mirror those of several head coaches and athletic directors.

“We’re on par with the approach our schools are taking,’’ Scott said.

The presidents also moved to bolster budgets before the books closed on the 2020 fiscal year by approving the use of the conference’s reserve funds in order to augment payouts to the schools.

After signing the $3 billion media rights deal with ESPN and Fox at the beginning of the 2010s, the Pac-12 built a reserve fund of $22.5 million that was designed to offset what an internal memo describes as “Unusual and Extraordinary Events,” which includes “natural disasters.”

According to Scott, the presidents approved tapping into the reserves to mitigate the loss of approximately $15.5 million in revenue from the cancellation of the Pac-12 and NCAA tournaments. That loss equates to a $1.3 million-per-school shortfall in expected payouts from the conference office for FY20. However, the exact figure isn’t yet known because the conference is awaiting the outcome of its claim for event disruption insurance.

Regardless of the result of the insurance claim, Scott said, the conference would not need to fully drain the reserve fund.

“We feel confident in being able to commit to making the campuses whole with their distributions,’’ he added.

Campus distributions for FY20 are likely to be in the $35 million range but won’t be made public until next spring.

The Pac-12 payouts for FY19 will be available later this month.