Peterson: The coronavirus pandemic will change everything — including spending in college sports

Salaries skyrocketed. College football’s highest levels included lavash, high-dollar capital-improvement projects.

Athletics fund-raising was booming.

It was the Golden Age, where if a prominent revenue sports coach wanted something, he or she got it — regardless of cost.

This was before coronavirus became a pandemic and sports worldwide went dark, of course.

It was before the NCAA canceled its cash-cow, the NCAA Tournament, and before athletic directors started re-figuring budgets to reflect what that cancellation would mean for their department’s financial bottom lines.

It's well past time for our colleges to re-rethink their free-spending mentality, anyway. That was underscored with Thursday’s word that NCAA basketball reimbursement to schools and conferences will be something around $375 million less than last year.

Now, it’s imperative that belt-tightening happens as quickly as possible, to offset budget shortfalls that could result in departmental layoffs and possibly cutting some sports.

The college sports spending bubble is bursting, right before our eyes. They are hardly alone — it's happening in various other industries as a result of this pandemic. Lots of bubbles just burst in a matter of days.

It’s an unfortunate but harsh reality that something as ravaging as COVID-19 has become the cause that should reset the pay scale for college coaches. But it's a matter of necessity now.

Let's get into the math.

Iowa State reported head and assistant coaching salaries of $17.3 million on annual financial reports filed with the NCAA for the 2019 fiscal year — 18.2% of reported expenditures of $95.3 million. For the 2015 fiscal year, Iowa State spent $12.1 million on coaches' salaries, 16% of a reported $75.2 million expenditures.

Iowa reported coaching salaries of $24.8 million on its fiscal 2019 report — 16.9% of reported expenditures of $146.3 million. For the 2015 fiscal year, Iowa spent $18.2 million for coaches, which was 16.7% of the $109.2 million athletic department expenditures.

Meanwhile, revenues the past five years have gone up $20.1 million at Iowa State and $46.1 million at Iowa.

Did schools brace for a financial hit? Iowa has roughly $4 million in its reserves, according to a February 2020 Des Moines Register story. In 2016, The Register reported Iowa State's reserve fund totaled $11.9 million then.

Neither Iowa AD Gary Barta nor Iowa State's Jamie Pollard would comment on their department's current financial situations when the Register reached out to them. Both said it's too early to predict what will be the financial impact.

Maybe what's in their reserves is enough to withstand the hit our schools are about to take from a partial NCAA Tournament payout. Maybe the athletic directors at our two largest universities have enough in the bank to help offset the crunch that's coming.

I hope they have. Combined, athletics revenues have grown $66.2 million in the last five years at our two largest universities.

But with this deadly virus out there and no cure available, the message is clear: It's time to ratchet down on costs in a big way.

Athletic directors nationwide can start by getting far more prudent about the contracts they are cutting.

Let's take a better look at the opportunities missed here (remember, this is a problem of major college sports and not just Iowa's major colleges).

The Big Ten Network was launched in 2007. From about that time, revenues exploded across college sports as additional TV deals got far more lucrative across the major conferences, including the Big 12.

According to the Knight Commission on Intercollegiate Athletics, Iowa's adjusted-for-cost-inflation revenues have grown 81% between 2005 and 2018. In that same time, also factoring in the cost of inflation, Iowa State's revenues have grown 150%.

Of course, very few people in everyday life saw something like the coronavirus pandemic coming. But I think we can all agree that that sort of revenue windfall offers a rare opportunity to save up for a downturn.

It's like they found oil in their backyard.

But what happened with their spending over that same period, according to the Knight Commission data? You can probably guess.

Iowa State increased its expenditures 156%, again adjusting for cost of inflation, and Iowa's ramped up 95%.

And it showed in the sort of contracts they handed out to coaches, the severance they allowed and the increase of pay to administrative and support staff.

Iowa State's pay to coaches and administrative and support staff, with severance included, rose about 102% when factoring in the cost of inflation ($13.75 million to $27.88 million) over those 13 years, according to the Knight Commission. Iowa's rose about 96% ($22.5 million to $44.24 million).

Again, the hyperactive spending is not just an Iowa or Iowa State issue. With cost of inflation built in, spending from 2005-2018 among Big Ten conference schools shot up 89% and 59% in the Big 12. 

Iowa State spent several million less than the Big 12 median and Iowa spent exactly the Big 10 median in 2018.

Perhaps Iowa and Iowa State can survive this uncertain time without too drastic of measures. We should all hope so. Because with dwindled NCAA tournament revenue and possible losses this fall to college football, who bails out cash-strapped departments?

This pandemic is hurting just about everything — from the colleges to the state government to big-pocketed donors to the federal government. A lot of people and businesses are going to need help, as we all know.

Iowa and Iowa State's athletics departments haven't received direct money from their universities' general fund recently. I suspect it will stay that way, because this is hardly an appropriate time to be asking the state, the school or the students for help.

Northern Iowa athletics has required direct support from the university for years. Its operational costs have grown very little compared to the state's Power Five schools, and the school lacks the TV money the big-conference programs receive.

"This probably should cause us all to ponder what's really important in college athletics, and indeed our life beyond college athletics," Big 12 Conference commissioner Bob Bowlsby said on a teleconference Thursday. "I think you'll see budgets on campus flat and salary budgets flat.

“It's not a time when we're going to throw a lot of money around. We're all going to have to be careful about our management of resources."

You’ve heard and read the line about administrators paying coaches “market value.” Market value among the 65 Power Five conference schools needs to change. It needed to change before the novel coronavirus forced the NCAA to cancel the biggest event it annually stages.

It’s unknown right now what exactly the NCAA’s Thursday announcement means for schools. But it's certainly not good.

Beyond that, with uncertainty around when life might return to normal, will season-ticket holders renew? Will fans be allowed into college football games? What happens to fund-raising?

One of the few things college athletics leaders can control right now is what they are spending now and in the future on sports.

The facilities arm race and the skyrocketing salaries in college sports ... it's time to get that under control, for their own sake.

In 2006, according to USA Today, Oklahoma’s Bob Stoops was the first and only $3 million-a-year college football coach. Last season, 31 coaches made $3 million or more. In one year, from 2018 to 2019, coaching football compensation went up 9%, the USA TODAY study found.

Clemson’s Dabo Swinney is a wonderful coach, but is he $9 million-a-year wonderful?The same goes for Alabama’s Nick Saban and the $8.7 million he most recently earned. Ditto for Michigan’s Jim Harbaugh and Texas A&M’s Jimbo Fisher and their $7.5 million.

Would they not coach at their same school for a couple million-a-year less? The database has Iowa’s Kirk Ferentz at $4.8 million and Iowa State’s Matt Campbell at $3.6, by the way. Men's basketball coaches make oodles of money, also.

College sports did this to itself.

There was a recent story on the Cleveland.com about four of Ohio State’s 10 full-time football assistants earning $1 million or more in 2020. This from an athletic department that lost money in 2018-19, according to the outlet.

Nothing will happen with coaches currently under contract, but what happens with the next wave of deals? Neither of our schools have a quick trigger in firing coaches — and that's prudent now more than ever to avoid paying people for firing them.

Power Five athletic directors need, as a whole, to get a lot tougher in their contract negotiations. Coaches need to give, too. Get creative — propose an incentive-heavy contract. Offer a base salary. Add financial bonuses for wins, for conference championships, for making the College Football Playoffs, for graduation rates and winning national championships.

Eliminate the bowl incentive. Is that really a huge accomplishment these days?

What about those hefty school buyouts? Fifty million if Clemson cans Swinney without cause? What!?! Negotiate better.

You may wonder why I am picking on coaching salaries.

Because it's a whole lot better an option than cutting sports, laying people off and jacking up ticket prices on their fans when times are tough.

Athletic directors and college presidents are pretty well compensated themselves. They're going be earning their pay in the coming months and years.

Iowa State columnist Randy Peterson has been writing for the Des Moines Register for parts of six decades. Reach him at rpeterson@dmreg.com, 515-284-8132, and on Twitter at @RandyPete. No one covers the Cyclones like the Register. Subscribe today at DesMoinesRegister.com/Deal to make sure you never miss a moment.