Dimensional Innovations Practice Director for Collegiate Sports, Drew Berst, recently sat down with Arkansas State Director of Athletics Terry Mohajir for a one-on-one conversation centering around the impact of COVID-19. Together, the two discuss the impact of mass cancelations for athletic departments around the country and Mohajir offers his perspective on a new reality facing athletic departments around the country.
Because of the COVID-19 pandemic, the NCAA disbursed roughly 40% of what they normally dole out to institutions. Mohajir, now in his eighth year at A-State, believes the NCAA lost about 70% of revenue and thinks the disbursed funds could come in at lower than 40% of normal.
The true impact is still trying to be sorted out.
Mohajir says several factors are at play because teams are saving a bit of money right now by not traveling, and some of the recruiting restrictions that have been put in place by the NCAA. He also believes many departments probably have some sort of budget freeze in place.
Mohajir says the situation for the Group of 5, which Sun Belt member Arkansas State is a part of, is a bit trickier because they are not subsidized like other schools, 70% of funds come from auxiliary and discretionary money. The Red Wolves, for example, are adding flexibility to season ticket sales and are looking at what the impact of next year will be.
The NCAA’s new eligibility extension will have an impact, he explains, but not every student-athlete is going to come back. The rule in pace is that you have to come back on the same aid for less, at A-State, for the baseball team that means you can stack the returning players on the existing 35 slots, but the institution has to figure out how to pay for the scholarships.
Mohajir says he agrees with the decision of the Division I Council not to extend eligibility to the winter sports student-athletes because they played a complete season. He says it’s a very fluid situation, it happened fast as the situation with the pandemic changed.
Impacts to Donors
As far as the private money that tends to help departments stay afloat, Mohajir says they are optimistic that the donors will be supportive. He says his team has been cautious in soliciting those donations, especially in light of a recent tornado in the area, but indications are the donors will continue to be supportive.
Mohajir points out that Arkansas State receives less in subsidies than other Group of 5 institutions and universities are looking at overall fewer subsidies. Also, a lot of universities have started to refund or credit students who may come back, plus auxiliary revenues and housing revenues are going to go down; these are issues that have to be included in the budget.
With all of these budget shortfalls Mohajir does see the possibility for realignment, he says he’s been a champion of geographic realignment. He says conferences are discussing what schedules will look like next year. He says they are looking at all sorts of options but the rights fees will have to be discussed as well.
He’s asked all of his head coaches to get back to him by next week with what their savings will be as compared to the budget shortfall. Areas they may save or travel-related and the fact that their athletic facilities are closed. He says they are looking at $225k in additional expense, depending on which seniors decide to come back. His existing budget is about $35 million.
On the subject of football, Mohajir says there are lots of potential impacts on the fall season. Depending on where we are in the pandemic there’s the possible impact of students not playing, or stadiums being empty, if games aren’t played what happens to the rights fees, he says it’s really just too early to tell. He believes people should be planning for the worst and hope for the best. He says it would be extremely tough for the industry to manage without a football season.
Mohajir says there’s a lot to consider from possible rights fees for football games that will solely be available to fans via broadcast to lack of ticket sales. He says he feels for the athletes who’ve been preparing their whole lives for this competition only to have this cloud of uncertainty. At Arkansas State, they have been given the green light for virtual meetings and are doing things like film review and discussions, but most of the effort to keep the student-athletes busy has been academic at this point.
Name, Image, Likeness
On the subject of name, image, and likeness, Mohajir says they are all for it at Arkansas State, but there are few issues that need to be hammered out. He thinks the committee has done a lot of great work on the complicated NIL issues. He says the biggest challenge in his mind is how university branding may be used, in his view the branding is bigger than the individual.
On the future, whatever that looks like in athletics, Mohajir says the true impacts remain to be seen. Some institutions could be impacted greater than anyone knows at this point. He says everyone budgets on the lowest amount of revenue, but at some point, every department is addicted to their revenue. In his opinion, departments that are more “addicted” to rights fees and university subsidies might be in a little better shape. He thinks the autonomy 5 schools or high resource conferences may be harder hit than people realize, but in theory, they should also have bigger reserve funds, unlike the Group of 5 schools.
In his final thoughts, Mohajir mentioned there are a lot of good-hearted people in this industry, he thinks if it gets bad, we’ll see people forgoing bonuses or taking a reduced salary to save jobs and keep departments intact.