Washington State University’s administration wants to take on additional debt to help pay for a financial recovery plan for the athletics department. The six-point plan is outlined in several reports to the WSU Regents who will be meeting virtually this week.
The administration’s financial recovery plan for the department separates athletics long-term ongoing annual debt and the deficit caused by the fallout from covid-19. Cougar Athletics is suffering major losses in net revenue in this year’s and next year’s budgets caused by the pandemic. The plan for the coronavirus caused deficit is to take on new debt through external financing by selling nearly 36 million in bonds. Those bonds would be repaid by PAC-12 media and bowl revenue distributions. The external financing plan for the coronavirus caused debt will be paid back by Cougar Athletics over 20 years with a “fixed and predictable” annual debt repayment. The regents are being asked to approve the bond financing plan for the COVID-19 caused debt. The pandemic caused athletics debt recovery plan also includes using 11 million dollars in university cash from savings from an October refunding of existing debt.
According to the report the external financing plan for the pandemic debt leaves athletics overall long-term cumulative debt at about 89 million dollars when it tops out in fiscal year 2025. The plan still calls for the department to end its annual budget shortfalls in fiscal year 2023. That’s when WSU will restore a subsidy for Cougar Athletics. The documents show that the university will once again pay for the department’s annual PAC-12 fees which cost 2.4 dollars a year. The report says a plan will be formalized requiring WSU Athletics to begin paying back its total cumulative debt after fiscal year 2023. Administrators note that the conference’s new media rights contract will bring in more money when it takes effect in 2025. That additional revenue is expected to help athletics repay its cumulative debt.
The budget model assumes home game ticket revenue from Cougar football this Fall assuming 50% seating capacity at Martin Stadium. Athletics is preparing a contingency strategy if fans are still banned for home Cougar football games this year.
You can read the reports here https://regents.wsu.edu/meeting-dates/May%202021/Board%20of%20Regents%20Meeting%20-%20May%206-7,%202021%20(2).pdf?0.06951568787272744 starting on page 288.
The WSU Regents will be meeting virtually online Thursday and Friday you can find a link for the stream here https://www.youtube.com/channel/UC-tdS40X5ld-a4KfarLJuDw