Iowa State Athletics expects $30 million deficit; discussing cutting sports and layoffs

Athletic Director Jamie Pollard answering questions from the media at a press conference Sept. 24, 2019.

Matt Belinson

Just two days removed from reversing course and announcing no fans will be attending Iowa State football games, Iowa State Athletic Director Jamie Pollard wrote a letter to fans on Friday with news of updated financial troubles for the athletic department to address.

With the loss of fans at football games this fall, Pollard anticipates Iowa State Athletics will be facing a $30 million deficit, a sharp increase from the original $17.5 million deficit estimate given to the Board of Regents last week. Pollard said Iowa State Athletics does not have the resources available to absorb the high-level deficit. 

“It is easy to have answers in challenging times but very difficult to have solutions,” Pollard said in the letter to fans. “Now that we have an answer — no fans at football, we begin the painful process of identifying financial solutions to reconcile the impact of our decisions.”

The announcement of the increased deficit came with three possible recommendations Pollard said will be given to the university leadership team in the coming days to discuss how Iowa State Athletics can work through the added financial burden. These are not set-in-stone decisions, but rather, possible paths the athletic department is looking to make in order to take on the added deficit.

Cutting sports

One of the announced recommendations is the possibility of eliminating some varsity sports at Iowa State. As a reference, a school needs 16 varsity sports to be classified as a Division I school, Iowa State currently has 18 varsity sports.

Pollard said the process of evaluating what sports, if any, could be eliminated to help with the budget shortfalls would not help the current budget issues. The possible elimination of a sport would help long-term in future annual savings and help pay back Iowa State University for any short-term funding provided. 

In his letter, Pollard said current scholarships and employment contracts would need to be honored.

Department pay cuts/layoffs

Back in early April, Pollard released plans for all athletic department staff to take a 10 percent pay cut in the aftermath of no Big 12 and NCAA Basketball Tournament being held due to the start of the COVID-19 pandemic in the U.S. That pay cut back in April extends through June 30, 2021.

Pollard said by taking the pay cuts and suspending all bonuses and incentives for coaches, the athletic department saved close to $4 million.

But now with the deficit climbing from $5 million back in April to the newly announced $30 million, additional payroll reductions and possible staff layoffs could occur.

“In the end, the decision was that the risks to the community were simply too great to have fans in attendance,” Pollard said in the letter. “We understand and support that decision. However, we now must face the challenges and consequences that stem from that decision.”

Closure of Stephen’s Auditorium

Out of the proposed measures announced by Pollard, the closure of Stephen’s Auditorium was given the most detailed explanation.

Pollard explained why closing Stephen’s Auditorium is the best decision for the athletic department going forward.

“The revenues generated from community members attending performing arts at C.Y. Stephens’ are simply not enough to cover the costs of facility operations. The university has been subsidizing operations at Stephens’ Auditorium at nearly $1M annually. In addition, the facility has significant deferred maintenance issues which would require another $25 million to $50 million to bring the building up to today’s standards.”

“As a result of the significant financial challenges facing the university and the athletics department, we are recommending that C.Y. Stephens’ Auditorium be closed indefinitely and future shows cancelled.”

In 2020, Stephen’s Auditorium was expected to host upwards of 200 different performing arts events before the COVID-19 pandemic. COVID-19 forced Stephen’s Auditorium to cancel 64 events between March through June.