Penn State Announces Salary Cuts in Athletic Department

Penn State called the decision necessary to address projected budget shortfall due to COVID-19.

Penn State's athletic department will implement pay cuts for the 2020-21 fiscal year to offset projected losses from the COVID-19 shutdown, according to a statement.

The athletic department did not specify the amount of the pay cuts or who would be affected. The Centre Daily Times reported that staff members would take cuts between 5-10 percent, depending on their salaries, but coaches might not be affected.

Staff members were informed of the decision last week, the Centre Daily Times reported.

"Penn State Intercollegiate Athletics has analyzed its budget and revenue shortfalls for the 2020-21 academic year due to the COVID-19 pandemic. As a result of our analysis and based on our current financial circumstances, we made the difficult decision to make reductions in salaries across the department for this fiscal year. The savings generated by these reductions, as well as decreases in our operation budgets, will assist in minimizing our currently anticipated revenue shortfall for this year," the statement from Penn State said.

Penn State Athletic Director Sandy Barbour recently had said that pay cuts were "probably unavoidable" because of the spring shutdown and the anticipated lost revenue this fall. Penn State's football team was responsible for $36.8 million of the athletic department's $41 million in ticket sales during the 2018-19 fiscal year.

Penn State's athletic department, which is self-funding, has not released budget estimates for 2020-21. The department's total budget for the 2019-20 fiscal year was $152.1 million.

According to Penn State's 2018-19 financial report, coaching salaries make up

"We've had conversations with our coaches and our leadership team and, to a man and a woman, they're prepared to step up and help with this cause, should that be the case," Barbour said earlier this month.

According to Penn State's 2018-19 financial report, payroll accounted for 38 percent of the athletic budget and its two largest line items. Coaching salaries were $40 million, and staff compensation totaled $29.7.

"We've had conversations with our coaches and our leadership team and, to a man and a woman, they're prepared to step up and help with this cause, should that be the case," Barbour said recently.

Athletic departments across the country have announced pay freezes and cuts, with several football and basketball coaches volunteering for reduced salaries. Wisconsin Athletic Director Barry Alvarez recently announced that his department faces a revenue loss of potentially $100 if football is not played.

This week Ohio State announced that football capacity for home games will be limited to 20 percent, if the season is played.

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