The financial effects of COVID-19 have hit the University of Texas athletic department. On Tuesday, Texas athletic director Chris Del Conte laid out plans the athletic department will take as a result of lost revenue from events cancelled and affected by COVID-19.
“For the past five months, we’ve been looking closely at financial and personnel situations, made numerous cost-cutting measures and have been planning ways to put us in position for success moving forward,” Del Conte wrote in his Forty Acres Insider newsletter. “After a great deal of discussion, thought and holding off as long as we could, with the closing of our fiscal year on Monday, we unfortunately had to make some very difficult decisions when it came to dedicated staff.”
Those initial measures resulted in a $19.9 million savings compared to budgeted operating expenditures, per Del Conte.
Other actions taken by the athletic department “such as reducing team and department operating expenses, regionalizing team travel, reducing capital project expenditures, fully integrating the Erwin Center operations within the department and deferring a principal debt payment that totaled savings in excess of $21.3 million,” per Del Conte.
Del Conte explained that 26 coaches and administrators took voluntary salary reductions for fiscal year 2020-2021, which for Texas athletics runs from September 1, 2020 to August 31, 2021. 273 staff members will receive temporary salary reductions beginning October 16 and running through the end of the fiscal year. 11 staff members will be temporarily furloughed with benefits.
Salary reductions are as follows, according to Del Conte: “Temporary salary reductions are based on a marginal rate approach in the following manner: the first $50,000 of an employee’s salary will be reduced by 2.5%, the next $50,001 to $100,000 is reduced by 10% and any amount above $100,001 is reduced by 15%.”
Beginning September 1, Del Conte announced 35 staff members will be laid off and 35 vacant positions will be permanently eliminated. Performance incentives are also eliminated.
The personnel decisions result in a savings of $13.1 million for the athletic department.
“These are unprecedented times we are in and all of us in college athletics are facing unexpected circumstances, a lot of change and very difficult decisions,” Del Conte said. “None of it has been easy, and we recognize the impact it’s had on so many and are deeply sorry for that. But we also know it’s our responsibility to position Texas Athletics to remain solvent, steady and able to perform at the highest level.”