Penn State athletics issues department-wide pay cuts; sources say most by 5%-10%
Salary reductions have been made across Penn State’s athletic department in response to the COVID-19 pandemic, the university confirmed Monday.
Three sources with first-hand knowledge of the issue told the Centre Daily Times that most employees were forced to take between a 5% and 10% pay cut.
When asked about the specifics of the reductions, the athletic department largely declined to answer. Instead, it issued a written statement that simply confirmed the pay cuts and the reasoning behind them. It did not dispute the CDT’s reported figures.
“Penn State Intercollegiate Athletics has analyzed its budget and revenue shortfalls for the 2020-21 academic year due to the COVID-19 pandemic,” the statement read. “As a result of our analysis and based on our current financial circumstances, we made the difficult decision to make reductions in salaries across the department for this fiscal year. The savings generated by these reductions, as well as decreases in our operation budgets, will assist in minimizing our currently anticipated revenue shortfall for this year.”
According to two sources, who spoke on the condition of anonymity because they were not authorized to speak, the athletic department held an online Zoom call — with more than 300 participants — on Wednesday to announce the pay cuts, which were based on a sliding scale. Those making over $150,000 will see the largest cut at 10%.
Are coaches included? Due to contractual issues, however, one source said, coaches might not see such cuts. As a result, the source added, coaches have been asked to voluntarily take pay cuts.
It is not yet known what coaches have voluntarily agreed to the requests, including Penn State’s highest-paid coach — football’s James Franklin, who is set to earn at least $5.4 million this year. The CDT reached out to both Franklin and defensive coordinator Brent Pry in early May about whether they planned to make voluntary contributions from their salaries to the student and employee assistance funds — like President Eric Barron suggested for university leaders in April. But neither the coaches, nor their spokespeople, directly answered the question.
However, Franklin and his wife Fumi established the Franklin Family Educational Equity Scholarship last year and announced earlier this month they had raised more than $460,000.
Deficit issue: During a recent Board of Trustees meeting, a university official estimated Penn State would operate with less than a $200 million deficit for the fiscal year. According to documents made public at the meeting, prior to Wednesday’s pay cuts, the university reported $104 million from cost-saving initiatives like freezing merit-based raises.
However, in those same documents, revenue from the athletic department was projected to see only a $5 million decrease compared to 2019. With fall sports in flux, and the football team having already announced the apparent elimination of two home games, it’s not known why the projected reduction was so small.
When asked about the accuracy of the projection, a Penn State spokesperson responded via email July 16: “Given the many unknowns with the COVID-19 pandemic, Penn State is preparing for a variety of scenarios and contingency planning continues across all areas of university operations, including in Intercollegiate Athletics. Athletics does not release financial information other than what is made publicly available at https://gopsusports.com/sports/2018/8/8/ot-financial-reports-html.aspx.”
COVID-19 concerns: The pay cuts come on the heels of increasing concern due to COVID-19. About half of Penn State’s classes will be held online-only this fall, and the university hasn’t yet released detailed plans for testing — although it will host a town hall on Thursday to update the community.
Still, there has been a recent countywide uptick in positive cases. Last week, Penn State announced a student-athlete had been infected with COVID-19 in the first known case in the University Park ZIP code (16802). And Centre County had a record 43 new positive cases Sunday — although there was just one new case Monday.
“We are collaborating with the (Department of Health) to investigate this sudden spike and to coordinate additional testing of these individuals,” Dr. Nirmal Joshi, chief medical officer at Mount Nittany Health, wrote to the CDT on Sunday.
The first day of Penn State class is Aug. 24.