Slammed by COVID-19, the University of Iowa is arranging its finances in a way that will impact the school and its athletics department for years to come.
The Gazette reports that outgoing university president Bruce Harreld is officially ending a financial arrangement in which the athletic department annually contributes $2 million to support the main campus. The decision comes as the athletic department is absorbing tens of millions of dollars in losses due to the impact of COVID-19.
“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,” university spokesperson Anne Bassett told the Gazette.
Meanwhile, the main campus will reportedly send the athletic department a $50 million “internal loan” for this budget year, despite also dealing with tens of millions in losses on its own. That money will, according to Bassett, be repaid to the main campus over a period of 10 to 15 years.
“Athletics will continue to be a self-sustaining operation,” Bassett said.
The arrangement for athletics to send the $2 million annually to support main campus began in 2017. Athletic director Gary Barta has said that was in addition to tens of millions the university already sent in ancillary support.
As COVID-19 disrupted athletic departments around the nation, the University of Iowa reportedly planned for severe income dips over fiscal year 2019. The budget deficits materialized, leading the school to cut four Olympic sports: men’s and women’s swimming and diving, men’s gymnastics and men’s tennis. A court ultimately ruled that the school would have to reinstate the women’s swimming and diving program to comply with Title IX, but the school is reportedly standing firm in its decision to cut the men’s sports.