The loan program would be large enough to cover losses in excess of $50M for each schoolGETTY IMAGES
The Pac-12 is "planning a mammoth loan program that would provide an escape hatch for cash-strapped athletic departments in the event the football season is canceled because of coronavirus," according to documents and sources cited by Jon Wilner of the San Jose MERCURY NEWS. The loan program "would be large enough to cover" losses "in excess" of $50M for each school, if needed, providing a maximum of $83M for each university at a rate of 3.75% over 10 years. Each athletic department "could decide whether it wanted to participate in the program." Sources indicated that "not every school would make use of the loan, and some would seek substantially less than the maximum allowable." Wilner reports if the Pac-12 plays a full football season, the plan "could be pushed aside entirely." The concept is "popular with university presidents because the loan would allow schools to bridge the coronavirus crisis without having to implement massive budget cuts that could include widespread layoffs and possibly the elimination of Olympic sports teams, which do not generate a profit." The plan also "alleviates the pressure on the universities to rescue their own departments." Sources said that the conference's private schools, Stanford and USC, "would be unlikely to participate in the program" (San Jose MERCURY NEWS, 8/6).
BEST CASE SCENARIO? YAHOO SPORTS' Dan Wetzel wrote the Pac-12 by banning together has "created the best possible financial situation (albeit one that still isn't great)." It could presumably be "duplicated by every conference and even wealthier leagues such as the Big Ten and SEC might be able to get even better terms." Money woes have "plagued college athletics since the cancellation of the lucrative NCAA men's basketball tournament last March." Now officials are "staring at a football season (where the majority of revenue is generated) that will have a reduced number of games and significantly fewer, if any, fans in the stands." Wetzel: "And that's if the season is even played. The economic implications for that are overwhelming" (SPORTS.YAHOO.com, 8/5).
