COVID-19

Higher education could see big revenue losses from a sports shutdown

Kristin Schwab Jul 10, 2020
Heard on: Marketplace
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Fans cheer the Ohio State University Buckeyes at a 2008 game. In one year, sports brought in $209 million to the school. Jamie Sabau/Getty Images
COVID-19

Higher education could see big revenue losses from a sports shutdown

Kristin Schwab Jul 10, 2020
Fans cheer the Ohio State University Buckeyes at a 2008 game. In one year, sports brought in $209 million to the school. Jamie Sabau/Getty Images
HTML EMBED:
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There’s this college sports phenomenon that economists study called the Flutie effect. It goes back to an iconic 1984 game, Boston College versus University of Miami. With just seconds on the clock, Boston quarterback Doug Flutie threw a Hail Mary, 48 yards for a touchdown.

That won the game for Boston College ⁠— and perhaps some students. The school reported applications went up 16% the following year.

“Universities view their athletic departments as the front door to their university,” said Stefan Szymanski, a professor of sports management at the University of Michigan.

Sports are PR powerhouses, and they make money. Recent data shows that in one year, Ohio State University sports brought in $209 million. More than half of that came from football. That’s in jeopardy with the announcement that because of the pandemic, Big Ten schools, made up of 14 major universities, will only play conference games this fall — an early sign that puts the season into question.

“This is a massive amount of money for athletic programs to be sacrificing, and obviously they don’t want to do that unless it’s absolutely necessary,” said Andrew Zimbalist, a sports consultant and a professor of economics at Smith College.

TV contracts, corporate sponsorship and ticket sales are at stake. To compensate, schools have started cutting back coaching salaries. And because football makes so much money, schools are looking at how to reduce spending on other sports.

“It’s almost impossible to overstate how important it is in terms of supporting hundreds of other athletes’ ability to participate,” said Molly Ott, a professor at Arizona State University’s Global Sport Institute. She added that financial losses this year could affect scholarships and money for student athletes in the future.

COVID-19 Economy FAQs

What’s going on with extra COVID-19 unemployment benefits?

The latest: President Donald Trump signed an executive action directing $400 extra a week in unemployment benefits. But will that aid actually reach people? It’s still unclear. Trump directed federal agencies to send $300 dollars in weekly aid, taken from the federal disaster relief fund, and called on states to provide an additional $100. But states’ budgets are stretched thin as it is.

What’s the latest on evictions?

For millions of Americans, things are looking grim. Unemployment is high, and pandemic eviction moratoriums have expired in states across the country. And as many people already know, eviction is something that can haunt a person’s life for years. For instance, getting evicted can make it hard to rent again. And that can lead to spiraling poverty.

Which retailers are requiring that people wear masks when shopping? And how are they enforcing those rules?

Walmart, Target, Lowe’s, CVS, Home Depot, Costco — they all have policies that say shoppers are required to wear a mask. When an employee confronts a customer who refuses, the interaction can spin out of control, so many of these retailers are telling their workers to not enforce these mandates. But, just having them will actually get more people to wear masks.

You can find answers to more questions on unemployment benefits and COVID-19 here.

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