A recent discussion co-hosted by Barnes & Thornburg’s University and Professional Athletics Group and Ernst & Young offered some insightful takeaways from guest panelist, Dr. Gordon Gee. The discussion focused on the need for accurate financial analysis and projections and informed planning when determining the future of university and college athletics.
Dr. Gee, president of West Virginia University, observed that U.S. college campuses and their athletic programs are actually suffering from not one, but five coincident “pandemic-type” crises:
- COVID-19 itself, which has claimed the lives of nearly 210,000 Americans to date and sickened hundreds of thousands of others including university students, faculty, staff and families;
- The collateral damage of COVID-19 upon those not directly stricken by the virus but suffering from its effects, including the college and university community – loss, loneliness, anxiety, depression, and particular vulnerability to drug or alcohol abuse;
- The loss and structural damage higher education now faces, generally and with respect to its athletic programs, as colleges and universities address the unprecedented financial and cultural losses the sector faces as a result of closed campuses, a drop in enrollment, how to address student health and safety, and the loss of operating revenue and government funding;
- The national response to unrest emanating from the urgent call for social and racial justice, a priority concern across college campuses with unique attention paid to student athletes and college sporting events; and
- The current political culture, which has raised serious concerns about future federal and state support for higher education and affected the atmosphere of college campuses.
All of these lead to a new game plan. Shifting to whatever the new normal might be will require risk management, legal counsel and a commitment to transparency. An emphasis on both cost management and new sources of funds is being made across industries, including higher education, in the wake of the economic shakeup.
Good data is critical, especially when it comes to the impact on budgets, taxes, the institution’s brand – and other legal issues. Most of the current cost savings are temporary – for the longer term, necessary planning alongside important stakeholders such as the university president, board leaders, outside counsel and consultants should be part of a strategic plan.
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