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

With a slow vaccine rollout so far, how has the government changed its approach?

On Tuesday, Jan. 12, Health and Human Services Secretary Alex Azar announced changes to how the federal government is distributing vaccine doses. The CDC has expanded coronavirus vaccine eligibility to everyone 65 and older, along with people with conditions that might raise their risks of complications from COVID-19. The new approach also looks to reward those states that are the most efficient by giving them more doses, but critics say that won’t address underlying problems some states are having with vaccine rollout.

What kind of help can small businesses get right now?

A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.

What does the hiring situation in the U.S. look like as we enter the new year?

New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.

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