MSU Defends Cuts, Requests Loan to Cover Losses | Athletic Business

MSU Defends Cuts, Requests Loan to Cover Losses

The Michigan State University athletic department announced in October that it was dropping men’s and women’s swimming and diving after the 2020-21 season.

According to The State News, Michigan State athletic director Beekman made his first public comments about the program eliminations during this week’s two-hour meeting with 12 Michigan State swimming and diving athletes, parents and alumni. Beekman told the swim community that the Michigan State athletic department suffered a loss of $80 million in revenue due to the COVID-19 pandemic, and that the financial difficulties led the university to look at all areas of the athletic department. The swimming and diving programs were designated for elimination due in part to their lack of success, and the cost it would take to make them successful.

“We really came up with five criteria that would help us analyze the various sports and their viability,” Beekman said. “The five criteria were, as a starting point, the potential for the sport to be successful going forward. Two, what it would cost to actually make that sport more competitive going forward. Three, were there potential cost savings if the sport were discontinued. Four, the impact on diversity and equity in our department. And five, the impact on the student-athletes experience across all sports.”

Related content: Michigan State to Drop Swimming After 2020-21 Season

Michigan State officials eventually settled on swimming and diving, with Beekman citing the cost of improving swimming facilities, and swimming and diving being the least successful sport at MSU in the last 25 years.

Despite cuts across the department, Michigan State Athletics plans on taking a $5 to $6 million loan from the university with the fiscal year closing June 30. It’s not unique, as the Iowa athletic department is reportedly taking a $50 million “internal loan” from the university.

Related content: University of Iowa Hands Athletics $50M ‘Internal Loan’

“We’re going to experience about $80 million in decreased revenue,” Beekman said Thursday of the 2020-21 budget. “We’ve been able to offset that by about $50 million in expenses. We had another about $4.5 million in COVID testing costs that come through the (Big Ten) so that shakes out to about $34 million loss. We’re able to expend reserves of about $24 million, which gets us down to a $10 million loss. I expect that our COVID-related testing expenses will be covered through pass-through money from the federal government, which gets us down to a loan of between $5 and $6 million.”

AB Show 2022 in Orlando
AB Show is a solution-focused event for athletics, fitness, recreation and military professionals.
Learn More
AB Show
Buyer's Guide
Information on more than 3,000 companies, sorted by category. Listings are updated daily.
Learn More
Buyer's Guide