How the NCAA decision, Odom’s firing will impact Missouri’s finances
Missouri’s athletic department lost nearly 10% of its revenue in the past week.
Dec. 04, 2019
The on-field impacts of an eventful week for Missouri athletics are, for the most part, fairly clear. Missouri’s football, baseball and softball teams will all miss out on the postseason and face limitations in recruiting and scholarships, and the football team will have a new head coach next year after the firing of Barry Odom.
What’s less clear — but equally important — for the athletic department is the extent of financial damage related to the decisions.
The NCAA’s decision to uphold sanctions against the university will have an almost immediate impact on the Tigers’ coffers. A $5,000 fine may be inconsequential, but the football, baseball and softball teams will all sacrifice 1% of their budgets for one year.
Those losses pale in comparison to the indirect consequences of the lost appeal, though. Missouri estimates it will lose $9-10 million due to the football team missing a postseason bowl game. The athletic department brought in about $107 million in revenue from July 2017 to June 2018, according to the latest publicly available numbers. That means Missouri will be missing at least 8-9% of its overall revenue right off the bat, roughly equivalent to the cost of travel and uniforms for all the Tigers’ programs.
That’s a problem for an athletic department already operating at a deficit. Earlier in the fall, before the NCAA’s decision, Director of Athletics Jim Sterk estimated Missouri would be about $1.5 million short in revenues but able to balance that with reserves.
The new $98 million South End Zone facility at Faurot Field forced the athletic department to take on debt in a coordinated effort with the UM System Board of Curators. The addition of metal detectors at the stadium beginning next year also added to the importance of financial consideration.
All of that, along with a lackluster football season, factored into Sterk’s decision to relieve Odom of his duties.
“Football is our largest revenue driver,” Sterk said in a press conference Saturday evening. “Our ticket sales have continued to go down. There’s probably a $5-6 million [gap] just to get back where we were in 2014. We’ve got work to do. The decision today is part of that and getting back to that level.”
There will be some additional money lost due to Odom’s departure, as he’s reportedly due a $2.8 million contract buyout. Sterk said he expects most assistant coaches to stay with Missouri or join other programs, avoiding additional buyouts.
There will also be the cost of a new head coach. Even after a raise, Odom was the cheapest coach in the SEC with a $3.05 million salary. The athletic department will likely have to open the pocketbook wider to attract higher-caliber talent, which Sterk is prepared for.
“We’re going to look at coaches that have been successful and so there’ll be a range, if you will, of what we’ll be able to pay for someone,” Sterk said. “That’s the support [we’ve received] from [UM System] President Choi, the board and Chancellor Cartwright.”
To improve both the performance of Missouri’s teams and the financial health of the athletic department, Sterk turned to the school’s benefactors.
“I think we need the outside support to do it,” he said. “We’ve challenged our folks … We want to be in the upper third as far as the SEC schools and the number of annual donors to our program. We’ve made big headway this year … We need to continue to build on that and have the annual support from our alumni and friends. And then internally we need to do the right thing as far as investing in the right areas.”
Sterk said the athletic department received $11.4 million last year from its 18,039 campaign for the Tiger Scholarship Fund, which aims to increase the number of donors to the school’s athletic programs. But he said that number needs to be closer to $12.5 million to adequately meet Missouri’s needs.
Sterk said donors have come forward to help Missouri in the wake of this week’s events.
“[I] always want to ask for support for a positive [thing],” he said. “It’s helping build our football program [going] forward and the annual donations for building excellence is what we want to do. Some folks have offered already and we’ll encourage folks to continue to give.”
Edited by Emily Leiker | email@example.com