On Wednesday, in their annual financial review with the University of Washington’s Board of Regents, athletics director Jen Cohen and chief financial officer Kate Cullen presented an athletics budget for fiscal year 2021 based on what Cohen called “our very best-case scenario – students coming back to campus, student-athletes back in our footprint, student-athletes and programs competing (this fall) with spectators involved.”

But the best-case scenario may not be the most realistic one. It’s entirely possible that, due to the ongoing COVID-19 crisis, UW sporting events could be played this fall without fans in attendance, pushed to the winter or spring – or, in the most painful projections, they might not be played at all.

UW’s athletics leadership will be prepared for each eventuality. On Wednesday, Cullen said that “over the last eight weeks, we’ve worked internally as well as with colleagues across the league, our Tyee board and external finance working group on estimating the financial impact of a number of different scenarios. We expect more clarity in the next four-to-six weeks in regards to students returning to campus as well as guidance from the NCAA and the Pac-12 regarding fall competition.”

Cohen added that “we have begun several modeling exercises on a number of different scenarios with very significant lists of mitigation strategies that can match up with those scenarios. Those are not included in this presentation today, because those are speculative at this point and they’re very much still in draft form. But I did want to reassure all of you that we’re doing our homework and we will be very prepared to come back to you again this summer should our circumstances change.”

But for now, let’s say that circumstances stay the same – that students return to campus and the “best-case scenario” reigns. Even in that model, UW is projecting its total athletics revenue to be $131,197,000 in FY21 – more than $7 million less than the athletics department projected prior to COVID-19. That’s due in part to a 10-12% drop ($4.4 million) in anticipated gate revenue, because of “fan discomfort/economic downturn.” Cohen and Cullen also expect $2.5 million less in athletics department contributions.

As for added expenses, the return of 29 fifth-year seniors whose 2020 spring competitions were canceled will cost $700,000 in scholarship expenses and $350,000 in sport operating expenses (meals, travel, medical expenses, etc.). Cullen said the athletics department hopes to use a fundraising campaign to cover the one-time costs associated with these returning seniors.

Lastly, as a direct response to COVID-19, the presentation stated the need to “address a number of safety related projects, including the creation of ‘hygiene stations’ throughout the village for our athletes, coaches, staff and fans.”

All things considered, Cohen and Cullen’s proposed budget projects a FY21 deficit of $9,912,000 without cost-saving measures and “deficit mitigation plans.” The implementation of said plans would shrink the projected deficit to a more manageable $1,602,696 (after the annual $14.3 million debt service payment on the loan that helped finance the 2012 Husky Stadium renovation).

Cullen concluded by stating that the athletics department’s reserves, which totaled $34.5 million in 2019, “are adequate to cover our deficit in this best-case scenario budget.”

Those “deficit mitigation plans,” by the way, notably include a 5% overall salary reduction ($1.93 million) through voluntary cuts, a hiring freeze and a reduction in overtime and hourly work, as well as operating budget cuts of 10% ($4.89 million).

This, again, is the “best-case scenario.”

And if a less favorable scenario plays out instead?

“Pretty much everything’s on the table, and (the mitigation strategies) depend on how severe the financial impact is,” Cohen said on Wednesday. “Obviously we will have to look at our staffing and additional changes that we need to make in salaries and benefits if we are in a situation where our revenues are not where we have them projected in this model. It’s everything you could imagine as far as cuts would go as a possibility.”

Or, to put it in the most blunt way possible:

“The range of (financial) impact that we could find ourselves in is (between) kind of manageable to devastating,” Cohen said. “The severity of the mitigation strategies we’d have to implement really depends on which scenario we end up with.”

So here’s one possible scenario: let’s say UW’s fall athletics season goes on without fans. The Huskies have already renewed 87.2% of their football season tickets, collecting $21 million for the 2020 season. Is there a way to maintain much of that revenue (and avoid comprehensive refunds) even if fans aren’t allowed inside Husky Stadium?

“So this is very weird, because we already have a lot of our revenue in for the next year – with the gate revenue in football, the contributions attached to it,” Cohen explained. “So we have a very robust and comprehensive fundraising campaign that we plan to implement, recognizing that this is a hard time for so many people.

“For example, if we were in a scenario where we weren’t allowed to have all spectators, we would be looking to develop a campaign to ask people that have already made those seat-related contributions to allow us to keep them and those people who have made a season ticket purchase to stay with us and keep their seat. We’ve talked about printing pictures of people in their seats in the stands and all kinds of creative ways to try to keep that support going.”

While FY21 is understandably the foremost concern, COVID-19 also had a significant effect on UW’s 2019-20 financial picture (FY20 runs through June 30). Prior to the virus’ arrival in the United States, the athletics department projected a year-end surplus of $827,000. It now projects a deficit of $548,000 – due in part to a lack of NCAA tournament and spring sports distributions ($2.1 million), loss of Seattle Storm game rental fees, spring souvenir and concessions revenue ($420,000), loss of gate revenue for UW baseball and softball ($200,000) and the loss of a Windermere Cup sponsorship ($170,000).

In Wednesday’s presentation, Cullen acknowledged that an array of factors – including additional medical costs for student-athletes and staff, fan attendance restrictions, sports scheduling changes, Pac-12 television distributions (in the case of a shortened season), NCAA distributions, multimedia rights, sponsorships, the region’s economic impact and the implementation of name, image and likeness rule changes – could significantly affect the FY21 budget.

That budget is set to be approved by the Board of Regents (if possible) in a meeting in June.

Until then, Cohen and Cullen will continue rooting for the best-case scenario.