University of Iowa gives athletics $50 million ’loan’

IOWA CITY — Given tens of millions in losses the University of Iowa Department of Athletics is absorbing from COVID-19's devastating impact, outgoing UI President Bruce Harreld has agreed to permanently end an earlier deal requiring athletics to contribute $2 million a year in direct support to the main campus.

Additionally, the UI main campus — facing budget cuts and tens of millions in pandemic-propelled losses of its own — is nonetheless shipping $50 million to the typically self-sustaining athletics department this budget year.

That money, according to UI spokeswoman Anne Bassett, will come from the university's cash reserves and come 'in the form of an internal loan that will be repaid over the next 10 to 15 years.

“Athletics will continue to be a self-sustaining operation,” Bassett said.

Although COVID-19 ripped through college athletics budgets locally and nationally beginning in March 2020, Bassett reported UI athletics managed its fiscal 2020 deficit from 'athletics accumulated reserve.” But Harreld and Athletic Director Gary Barta last year 'temporarily suspended” the $2 million athletics contribution agreement in fiscal 2020.

“Given the significant deficit accumulated by athletics in FY21 due to the cumulative effects of COVID-19, the president agreed to permanently end the annual contributions from athletics,” Bassett said.

Pre-COVID, UI Athletics was flush with income — reporting $122.4 million in the 2019 budget year, including $54.9 million from the Big Ten or NCAA; $7.8 million from its multimedia contract; and $23.6 million in philanthropy or foundation-generated income.

That income total represented a near doubling from a decade earlier, when UI Athletics reported $66 million in income, including $19 million from the Big Ten or NCAA and $12 million from the foundation.

Given shortened seasons and fan restrictions for its biggest moneymakers this year, UI Athletics' fiscal 2021 budget — approved in the fall — projected $23 million in total income, including $10 million from the Big Ten or NCAA; about $7.5 million in foundation support; and $1.5 million from its multimedia contract.

Those projections were before some semblance of a fall football season materialized — although Barta has said Iowa's athletics deficit still will reach the tens of millions, losses he has cited in justifying his decision to cut four Olympic sports permanently: men's and women's swimming and diving; men's gymnastics; and men's tennis.

A federal court recently forced UI to reverse its elimination of women's swimming and diving, citing a likelihood female athletes would win a Title IX lawsuit accusing the UI of failing to comply with mandates it offer equal athletics opportunities to women.

But UI Athletics is standing firm on its move to cut the eliminated male sports — despite broad efforts among supporters and alumni to raise long-term support and establish a new model for long-term sustainability.

When UI Athletics in 2017 agreed to start providing $2 million of its annual revenue to the main campus' general education pursuits, Barta reported athletics — additionally — provided tens of millions in ancillary support.

In the 2016 budget year, for example, UI Athletics reported transferring $23 million to the central campus in the form if tuition and room and board from its athletes, medical support and parking revenue, among other things.

In a message from Barta in 2017 about the deal to commit $2 million a year in direct support to the campus' main academic mission, he said, “We're fortunate to have seen an increase in revenue, particularly from television broadcasts, in recent years.”

“This increase has put us in a position to explore even more ways to support the greater university mission.”

The UI athletics loan comes as its Board of Regents is asking lawmakers to restore $8 million the Legislature cut mid-fiscal 2020 and up the state's general education support another $18 million for fiscal 2022. UI recently created another new revenue stream by entering into a public-private partnership for the operation of its utility system, enabling the creation of an endowment expected to generate $15 million annually for the UI strategic plan.

But spokeswoman Bassett said, “Investment revenue generated from the public-private partnership (P3) for the university's utility system is solely dedicated to supporting initiatives to bolster student success and develop and retain faculty.” UI President Harreld — who's retiring in May, two years before the end of his extended contract — is leaving on the table $2.3 million in deferred compensation he was due had he remained a board employee through 2023.

And UI Athletics last week announced longtime donors — and owners of the World's Largest Truckstop on I-80 — Will and Renee Moon were gifting $10 million to the Iowa football program. Half the total will create an endowment fund for the head coaching position, which will now be referred to as the 'Moon Family Head Football Coach.”

Of the remaining $5 million, $3 million will establish a Will and Renee Moon Excellence Fund to support football and other athletics initiatives — as determined by the athletics director. The last $2 million will support a Kinnick Edge Campaign for the revitalization of the stadium's north end zone seating and concourse.

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