Open letter to the University of Iowa and Hawkeye Athletics community

• Previous departmental budget reduction decisions and requirements related to sport eliminations, salary reductions, unpaid furlough days, position eliminations, hiring freezes and reduction in biweekly employee expenses will not change as a result of this news.
• We anticipate additional revenue related to the return to football in addition to increased expenses. The overall financial impact, due to the pandemic, remains significant and will take years to overcome. Any realized revenue from this decision will potentially adjust our financing/repayment plan that allows continued success for our remaining sports.
• We are also experiencing significant increased costs associated with our COVID-19 medical procedures and protocol, including the testing of our student-athletes, coaches, and staff.
• The institutional decision to reduced our sports sponsorship remains final and was affirmed by the Board of Regents, State of Iowa.

The COVID-19 pandemic has resulted in a financial exigency which threatens Iowa Athletics continued ability to adequately support 24 intercollegiate athletics programs at the desired championship level. In March, the NCAA and Big Ten Conference announced the cancellation of their basketball tournaments and all other competitions for the remainder of the year. On August 11th, the Big Ten Conference announced a postponement of fall competitions (including football). Iowa Athletics now projects lost revenue of approximately $100M and an overall deficit of $75M this fiscal year. A loss of this magnitude will take years to overcome. In collaboration with the Board of Regents, State of Iowa, and UI President Bruce Harreld, we determined the current circumstances require us to adjust our sports sponsorship offerings. There is never a good time to make this announcement. We will assist each student-athlete with making the decision they feel is best for their future education and athletic endeavors.

UI Athletics Financial Timeline

January 2020 Anticipated FY21 Budget Revenue        – $127,882,971

January 2020 Anticipated FY21 Budget Expenses      – $123,882,971

Excess 2020 Revenue to University transfer and reserve fund- $4M

Prior to COVID-19 the anticipated FY21 budget was forecasting a $3M increase in revenue over the previous year.

May 2020 Anticipated FY21 Budget Revenue             -$112,589,125

May 2020 Anticipated FY21 Budget Expenses            – $112,589,125

On March 12 & 13^th the B1G and Men’s and Women’s NCAA Basketball Tournaments were canceled due to COVID-19. UI Athletics implemented $15 million in budget reduction including operating expenses and compensation adjustments.

August 2020 Anticipated FY21 Budget Revenue – $23,223,130

August 2020 Anticipated FY21 Budget Expenses        – $97,974,696

FY21 Anticipated Deficit                                    – ($74,751,566)

On August 11^th, the Big Ten Conference announced the postponement of fall sports (including football). That announcement led to a drop in anticipated revenue for the Iowa Athletics Department of more than $100 million compared to our pre-COVID budget.

Meanwhile, despite best efforts, Athletics expenses can only be reduced so much in a given year. The athletics department’s continuing expenses go towards student-athlete scholarships and services, facilities debt, sport operations, and now-reduced salaries for department employees.

The direct and indirect cost to support the four sports is approximately $5 million per year.

• Direct Costs (salaries, scholarships, medical, sport operations)
• • Men’s Swimming & Diving $1,284,814
  • Women’s Swimming & Diving     $1,479,323
  • Men’s Gymnastics              $761,673
  • Men’s Tennis                     $749,479

$4,275,289

• Indirect Costs
• • Academic Services
  • Athletic Training
  • Strength and Conditioning
  • Nutrition/Fueling Stations
  • Facility/Major Maintenance – (2020-21 cost is more than $3 million)

Only some of these expenses are recoverable in 2020-2021 (for example, salaries and student-athlete scholarships will remain in place), but the future savings of approximately $5 million per year will help to close the long-term debts cause by COVID-19.

The $5 million per year will assist the athletics department in creating a long-term debt repayment plan that allows continued success for our remaining sports.

Yes. The Athletic Department made several other cuts prior to discontinuing sports.

• Salary reductions were implemented across the department in July 2020
• 40 positions within the department were either not filled or eliminated
• Operating budgets were cut across the board for the current fiscal year.
• A second round of compensation reductions were made in the form of mandatory 15 days of unpaid leave between September 1 and December 31^st

(https://now.uiowa.edu/2020/07/university-iowa-announces-budget-reductions-begin-fiscal-year-2021)

The decision to discontinue sports was the last choice in the plan to move forward in recovery from the fiscal challenges created by the COVID-19 pandemic. Despite these cuts, Iowa Athletics is still anticipating a $75 million deficit in 2020-21.

While we are grateful for our many loyal and generous donors, our past experience would indicate private support won’t be able to overcome the $75 million deficit created by the COVID-19 pandemic. Our decision to reduce the number of sports programs offered is final.

The following two examples summarize fundraising campaigns previously conducted by Iowa Athletics in an effort to provide context as to the magnitude of the challenge.

• UI Campus Recreation and Wellness Center (Opened 2010)
  • Overall Facility Cost Including Pool – $69,125,000
  • Pool Cost – $9,000,000 – paid for by Athletics
  • Total private support – $422,533

• Hansen Football Performance Center (Opened 2014)
  • Total Facility Cost – $55 million
  • Total private support – $38.3 million
  • Athletics largest facility fundraising effort in history

We are extremely thankful for the support of our loyal and generous donors. Existing endowments typically have donor-directed restrictions that designate a specific area or type of support.  The total dollars required to create new endowments to fund the four sports being discontinued is simply too high.

• • Estimated Cost to Endow each sport program

• • • Men’s and Women’s Swimming – $70M would generate an annual operating budget of $2.8 million. (Assumes a 4% payout)

• • • Men’s Tennis – $20M would generate an $800,000 operating budget (Assumes a 4% payout)

Men’s Gymnastics – $20M would generate an $800,000 operating budget (Assumes a 4% payout)

We will work hard to support each student-athlete as they go through this very difficult transition. We have promised each student the following:

1. We will provide the opportunity for each of the four teams to train and compete at Iowa this season (2020-21) to the extent the COVID-19 pandemic allows.
2. We will honor all student-athletes’ financial aid agreements until the student completes his/her undergraduate degree at Iowa, or until such time the student chooses to transfer to another institution.
3. Should a student-athlete decide to continue their education at another institution, the athletics department compliance office will assist him/her on a personal level. All necessary documentation will be provided in a timely manner to ensure student-athletes can transfer efficiently.

Iowa engaged in a thorough process in which all financial options and each of our programs were reviewed.  Several different sports, and sport combinations, were considered. In the end, the sports selected were determined to provide the best path forward in a complex and difficult situation.

While the single reason for reducing sport sponsorship at Iowa was the financial crisis brought on by COVID-19, the following specific factors were used in the evaluation:

• History of the sport at Iowa
• Sponsorship of the sport at the NCAA Division I level
• Historical competitive success, within the Big Ten Conference and NCAA Division I
• Impact on diversity within our student-athlete and staff populations
• Investment required to achieve competitive excellence on the conference and NCAA Division I level
• Impact on Gender Equity and Title IX compliance
• National, State, and local interest
• Impact on the student-athlete experience across all sports, now and in the future
• Current and future prospect for success of the sport
• Expense savings from the elimination of the sport
• Iowa High School Association sponsorship of sport(s)
• Current and future facility opportunities/needs

Not all factors applied to each of the four teams.  We remain thankful for the contributions and successes of each of our teams and student-athletes, and will continue to celebrate them even as the pandemic forces Iowa Athletics to chart a different path forward.

Employment contracts for all coaches will be honored.  The university will support a coach’s decision to seek employment prior to the end of their contract.  Support will be provided to coaches and staff in seeking employment.  Our athletics department human resources staff will be available to provide counseling regarding employment options.

The athletics department compliance office will work closely with each incoming student to help meet their financial needs. In addition, our compliance office staff will counsel each student-athlete on their available options.

Win. Graduate. Do It Right. We believe this decision better positions Iowa Athletics to excel at the conference and national level for the future.  The impact of the COVID-19 pandemic is significant and we are making sound decisions necessary to work through the short-term, and long-term, challenges.  At the same time, we are creating a path forward to sustain academic and athletic excellence, in the post pandemic era.

Following the completion of the 2020-2021 intercollegiate athletic season, it is our hope that these students, if they choose, could continue to compete in the robust UI club program.

Swimming: The Iowa Flyers Swim Club (IFLY) is a registered USA Swimming club operated by the University of Iowa Recreational Services. The club practices and competes at the Natatorium of the Campus Recreation and Wellness Center. It offers competitive opportunities to University of Iowa students through its masters program. The club hosts national meets like the Speedo Midwest Challenge, which was hosted by the University just last year. More information: https://www.teamunify.com/team/iauif/page/home

Tennis: The University sponsors the Hawkeye Tennis club which provides open court times in the same facility used by Athletics, monthly drills, and opportunities to compete with other players on campus and in the community. The Club also offers University students the opportunity to tryout for its co-ed travel team. More information: https://uiowa.campuslabs.com/engage/organization/tennis-club-hawkeye

Gymnastics: The Gymnastics Club at Iowa exists to support University of Iowa students who wish to continue training and competing in the sport of gymnastics. The club practices in the same facility used by the Athletics—the North Gym of the Field House. More information: https://uiowa.campuslabs.com/engage/organization/the-gymnastics-club-at-iowa

The University of Iowa remains committed to adhering to federal Title IX gender equity compliance.  This plan will allow us to continue to provide equitable national championship and academic opportunities for our student-athletes in compliance with Title IX.

Diversity, equity, and inclusion are important parts of the Iowa Athletics Departments mission.  The elimination of these four sports will not negatively impact our efforts in this area.

It is our intent to compete during the 2020-2021 academic year. If due to COVID-19, or other factors, we are unable to complete a sport season we will continue to honor the student-athlete scholarships and coaches’ contracts.  Iowa will honor all athletic financial aid agreements until the student completes their undergraduate degree at Iowa, or until such time the student chooses to transfer to another institution.

A thorough process in which all financial options and each of our programs were reviewed.

The following specific factors were considered in determining sport sponsorship at Iowa:

• History of the sport at Iowa
• Sponsorship of the sport at the NCAA Division I level
• Historical competitive success, within the Big Ten Conference and NCAA Division I
• Impact on diversity within our student-athlete and staff populations
• Investment required to achieve competitive excellence on the conference and NCAA Division I level
• Impact on Gender Equity and Title IX compliance
• National, State, and local interest
• Impact on the student-athlete experience across all sports, now and in the future
• Current and future prospect for success of the sport
• Expense savings from the elimination of the sport
• Iowa High School Association sponsorship of sport(s)

Current and future facility opportunities/needs