As Stanford Cuts 11 Sports From Their Program, Expect Other Power 5 Schools To Follow Suit

Stanford University has the third largest endowment ($27.7 billion) among all American universities. Yet, on Wednesday, their athletics department announced they are eliminating 11 of 36 sports from their athletics department as they adjust to the financial realities of the global pandemic upon college athletics.

This is just the tip of the iceberg, as more Power 5 schools will almost assuredly be cutting sports programs in the not-too-distant future.

Since the onset of the global pandemic in mid-March 2020, numerous college athletics departments and Division I conferences have made adjustments as the result of both short-term losses from sports cancellations during the Sping 2020 semester as well as the expectation of further losses in the coming months and years. These adjustments have ranged from staff furloughs, staff wage reductions, cancellation and/or alteration of post-season conference tournaments in a variety of sports for several years going forward, and the outright elimination of sports teams.

As it relates specifically to eliminating teams from athletic departments, however, all of these incidents - prior to today - have come from Group of Five Schools. Given that such schools aren’t even in the same financial stratosphere as the so-called Power 5 schools (i.e. schools belonging to either the ACC, Big 10, Big 12, SEC, or Pac 12 conferences), it’s not shocking that we’ve unfortunately observed more sports reductions at the more financially meager schools.

But for Stanford, a Power 5 member of the Pac 12 conference, to evoke such sweeping changes signifies just how financially grave the current and short-term future outlook is for college athletic programs.

And with the upcoming college football season in peril as the virus spikes nationally just weeks before the slated beginning of the 2020 season, this only exacerbates fears athletic departments must be experiencing all across the country.

Fears which have already led to numerous adjustments across intercollegiate athletics:

• Athletic staff members asked to take furloughs, ranging in length from one week to several months;
• Athletic administrators taking pay cuts;
• Conferences cancelling post-season tournaments in select sports, with the MAC doing so for 8 sports and the Mountain West doing so for 4 sports;
• And schools across all walks of collegiate athletics cutting operating budgets where they can.

In May, ESPN cited my research estimating the 65 Power 5 schools would collectively lose more than $4 billion in football revenues if the entire college football season was scraped, with at least $1.2 billion of that due to lost ticket revenue. Each Power 5 school would see at least an average loss of $62 million in football revenue, including at least $18.6 million in football ticket sales, he said.

While that analysis did not consider the Group of Five schools, the total losses would undoubtedly creep towards $5 billion if all of Division 1 college football was lost for the 2020-21 season.

Subsequently, this is largely why college presidents and athletic directors are trying so hard to figure out a way to at least have some semblance of a season...even if without fans. The risk-reward calculations of whether to play are something unlike we’ve seen in our lifetimes. They should plan for the contingency of playing in the case we can somewhat manage the situation, but in the same breath, be absolutely prepared to stop in place if the circumstances become unsafe or otherwise untenable.

For perspective, according to financial data for the 2018-19 academic year as reported in the Equity in Athletics data base, Stanford athletics generated $139 million in total revenue, with $44 million attributed to the football program.

While not as lucrative a football program as the average Power 5 school, Stanford cutting 11 sports from their athletics department is a mere foreshadowing of similar actions Power 5 schools will undertake in the coming months as they combat and adjust the worst foe to hit college athletics in decades.

A global pandemic with no immediate end in sight.

Placing the immediate start of the Fall 2020 college sports season - football most notably - in dire straits.