Tennessee athletics reported a deficit in fiscal 2020. Here are the details.

Tennessee’s athletic department operated at a six-figure deficit during the 2020 fiscal year, a reflection of how the first few months of the pandemic affected revenue streams and a downturn in contributions.

Tennessee attributed its operating deficit of $488,857, in part, to pandemic-induced revenue reductions, while noting that the financial loss was not as great as it initially expected.

The 2020 fiscal year ended June 30. Universities were required to submit their annual fiscal reports to the NCAA by Friday, and Knox News obtained the report via public records request.

“Revenue reductions related to the cancellation of spring sports and the men’s basketball NCAA Tournament were significant,” athletics director Phillip Fulmer said in a statement to Knox News, “but the department was able to mitigate that impact through various cost containment measures. We also are especially grateful to our Tennessee Fund members and ticket holders, who made a difference through their generous giving and ticket donations.

“This result is much better than initial projections from March and April. We appreciate our staff’s efforts to control costs and navigate a challenging year while remaining focused on the success of our student-athletes.”

Tennessee’s finish in the red comes after the Vols reported a $789,730 operating surplus for the 2019 fiscal year.

Why Tennessee finished in the red

Tennessee reported $140.3 million in revenue, a 2.4% decrease from the previous fiscal year. Notably, UT’s NCAA distribution revenue dropped from $2.9 million during the 2019 fiscal year to $737,623 during the 2020 fiscal year.

That reflects, in part, the financial impact of not having an NCAA Tournament for men’s basketball.

Tennessee’s contribution revenue decreased to $26.3 million, a downturn of nearly $5 million from the previous year.

But the pandemic also resulted in a reduction in expenses.

Tennessee reported $140.8 million in total operating expenses, marking a 1.5% decrease in expenses from the previous year.

Tennessee cut its recruiting expenses by about $860,000. In March, the pandemic halted recruiting official visits, which are on-campus recruiting visits by prospects that the university funds.

Additionally, Tennessee trimmed $1.5 million from its travel expenses, a reflection of winter and spring sports seasons ending in mid-March.

Also of note: Tennessee reported no severance expenses for the first time since the 2015 fiscal year. That comes with a caveat. Tennessee paid severance to former football coach Butch Jones throughout the 2020 fiscal year, and he remains on the ledger for buyout payments through the end of February.

However, because of accounting procedures, a coach’s full potential buyout is recorded on the financial report for the fiscal year during which the firing happened, even if that severance is to be spread across several years.

As such, Tennessee led the nation in reported severance, at $13.8 million, for the 2018 fiscal year, when UT fired Jones, his staff and athletics director John Currie.

More of the pandemic’s effect will be seen in 2021

The pandemic's financial effect likely will be seen more severely on next year’s report for the 2021 fiscal year.

The 2020 fiscal year reflects the 2019 football season, played in full stadiums before the pandemic's arrival.

Tennessee restricted Neyland Stadium’s seating capacity to about 25% for the 2020 season in response to the pandemic, and the athletic department has projected a pandemic-induced loss of about $40 million in revenue for the current fiscal year.

Nonetheless, the football program was not as profitable during the 2020 fiscal year as compared to the previous year, a reflection mostly of a $4.4 million dip in contributions.

Overall, the football program operated at a $37.2 million surplus, a 14.3% decrease from the previous fiscal year.

The men’s basketball program increased its operating surplus by 11.2%, year over year, despite the downturn in NCAA distribution. That increase was due, in part, to a $581,096 increase in ticket sales revenue. Overall, the men’s basketball program operated at a $4.2 million surplus for the 2020 fiscal year.

By the numbers

Here are some key figures from Tennessee's revenue and expense report submitted to the NCAA for the 2020 fiscal year, which ended June 30. Figures for the athletic department are listed first, with the football program's portion of the figure listed in parentheses. 

Revenue

• Ticket sales: $35.5M ($28.3M)
• Contributions: $26.3M ($22M)
• Media rights: $37M ($16.4M)
• Royalties, licensing, advertisement and sponsorships: $14.1 ($10.6M)

Expenses 

• Support staff/administrative compensation, benefits and bonuses: $27.4M ($4.7M)
• Coaching salaries, benefits and bonuses: $25.8M ($11.6M)
• Athletic facilities debt service, leases and rental fee: $16.9M ($13M)
• Athletic student aid: $15.3M ($4.9M)
• Severance payments: $0

Blake Toppmeyer covers University of Tennessee football. Email him at blake.toppmeyer@knoxnews.com and follow him on Twitter @btoppmeyer. If you enjoy Blake’s coverage, consider a digital subscription that will allow you access to all of it. Current subscribers can click here to join Blake's subscriber-only text group offering updates and analysis on Vols football.