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July 8, 2020

Bernard Muir

Stanford, California

THE MODERATOR: Thank you, everyone, for joining us for today's press conference with Jaquish & Kenninger Director of Athletics Bernard Muir.

Bernard, if you'd like to make an opening statement.

BERNARD MUIR: Tyler, thank you very much, and thank you all so much for joining us on such short notice. I assume you've all read the letter sent today by the president, provost and me as well as extensive frequently asked questions that the university released, so I'll not spend much time right now going through those details.

As you can imagine, this has been a heartbreaking day for all of us, especially those student-athletes and coaches who are involved. We made this decision only after exhausting all viable alternatives. It recently became painfully clear that we would not remain financially stable and support 36 varsity sports at a nationally competitive level, which is what we so desire.

The primary alternative to this decision would have been a broad and deep reduction in support for all 36 sports, including eliminating scholarships, ceasing to be competitive in our efforts to attract and retain the very best coaches and staff, so that became increasingly difficult for us in this situation.

The president, the provost and I agreed strongly, as did the board of trustees, that operating our programs in that manner would be antithetical to Stanford's values and its determination to be excellent in everything that it does, so instead we're choosing to continue to pursue excellence in as many sports as we can, which we've determined to be 25.

We are committed to ensuring that these 25 sports will have the chance to be competitive on the national level, and that's what we are aiming to do and ensuring that the varsity student-athlete experience at Stanford remains unrivaled.

We will, of course, support the affected student athletes and coaches and staff as they process this news that they heard this morning and begin planning for a very different future, and we will fully support the 11 sports throughout this school year as they hopefully will have the opportunity to compete one final time.

Stanford can and will continue to have the best athletics department in the country. That's our aim. But this is certainly going to be an extremely painful chapter in our history. With that, let me just turn it over, Tyler, to you, and we can start the question-and-answer process.

Q. I know a lot of athletes were told this information over Zoom; what have been the responses from athletes to this information that you've heard?
BERNARD MUIR: It's difficult for me to convey this over Zoom. We did that this morning on relatively short notice, just trying to get that word out. I have not had the opportunity to interact with our student-athletes to this point since the call this morning, but our sport administrator for each sport is going to be on calls with the teams just so we can process, help answer questions, and then go from there. Obviously not ideal. Would much rather communicate this type of information in person. But due to the situation we're in as a country, this is the way we had to communicate to them today.

Q. In the letter that you sent out, one of the things that it said was that 36 varsity sports ultimately was just not sustainable, and I'm just curious how much of this was COVID induced versus COVID accelerated in terms of the way you were looking at the way the department was going, even without this situation?
BERNARD MUIR: Yeah, great question. Let me just say we had a structural deficit that we identified pretty early on. Coming into before the pandemic, we had about a $12 million -- we estimated a $12 million overture deficit, and then when we got into the pandemic, when you think about the decline in sponsorship, the decline in having people in the stands and some other factors, as well, that number ballooned to $25 million. Certainly if we don't have football, that number will probably double, and so that's something that we looked at.

But we foresaw that the structural deficit would continue not only just this year but years after. We knew we had to address the problem as best we can.

Q. Could you just walk through a little bit more about that deficit and whether it is more a problem on the revenue side or the expense side and the roles that attendance for football and men's basketball and fundraising played in your calculation?
BERNARD MUIR: Yeah, I think it's a number of different things. Certainly selling tickets, having donations tied to tickets is a part of it. You know, revenues we garner from a number of different sources. But the university expects us to be self-sustaining, and so when you look at our expense category, that was continuing to rise across 36 sports. When we talked to our coaches, they all have asked for legitimate things that we had to say no. We've also had some expense cutting measures where we saved close to $5 million. We estimate in this coming year -- we've had some controls put in place; we've asked teams to not travel as far in certain circumstances, so that's been an issue.

And you've got to keep in mind we're talking about 36 sports here. The NCAA average, as we said in the notes, is 18, and so we've been punching above our weight for quite some time. It just became more acute as we got into pre-COVID but then certainly when we got into this realm, it became such a large issue that we had to take this measure.

Q. Could you explain a little bit the $200 million estimate to permanently sustain the sports you're cutting out? That's $200 million over what period of time?
BERNARD MUIR: Truly it's just for endowing those programs. If we were to ask to put those programs in a national competitive environment in perpetuity, that's where we talk about endowment, that's been something that's been a hallmark for Stanford. To do that for 11 sports, we get to that $200 million. That's endowing scholarships, that's endowing coaching positions, that's endowing other elements to the department that we would need to do and not take away from the 25 that we're going to continue.

We still have a significant dollar to raise on that side in order for them to sustain competitive excellence across the board, and so trying to do both across 36 became just so difficult for us to manage that we had to discontinue some of our programs.

Q. We've got a lot of surface-level information about how well-funded Stanford is as a university in terms of the overall endowment and holdings and things like that. Can you walk us through what funds are actually available to you guys in terms of operations and what's not and kind of clear up a lot of what's been said about what you can do versus what you can't do?
BERNARD MUIR: Yeah, I would say you've got to keep in mind, yes, Stanford has a significant endowment, but we also have to keep in mind that most of those dollars are restricted. Most of that resource is going to support financial aid for the student body. It's supporting faculty research. We have a robust endowment that covers scholarships primarily, but certainly across 36 sports and all the expenses necessary, as I said earlier, just we didn't have enough dollars generating from our smaller endowment for the university for athletes to cover all the expenses necessary.

But I think the numbers that you see across the headline, the staggering numbers for the university, that's going to -- those are restricted in nature, and so we don't receive the dollars from that.

Q. Could you walk us through, explain some of the ways that the COVID-19 crisis has made the budget situation more difficult? Are there any specific ways that it's impacted Stanford's athletic programs?
BERNARD MUIR: Yeah, I did visit with that just earlier, but I will tell you this in a nutshell: Basically we had a structural deficit coming in, so I don't want to pin this all on COVID. That's not the case. That would be erroneous for me to provide that this is just COVID related. We had a $12 million deficit roughly going in. When we realized coming out of COVID we knew that we were going to take a hit financially from a ticket level, depending on if we have football especially, and how many people can be in the stands for that. We know we're going to take a hit sponsorship-wise, we know we're going to take a hit from our development numbers. So all of that contributed to doubling that roughly to $25 million and some -- to $25 million is our projections coming out of COVID.

And then the other unknown that we continue to try to get our arms around is whether we will have indeed football, and if we don't, you can just go ahead and double that figure again, which was of great concern for us.

But to blame this all on COVID would be erroneous and it would not be accurate, but it certainly helped contribute to the growing deficit moving forward.

Q. I read in the letter that current scholarship athletes or student-athletes are going to have their scholarships honored and coaches are going to have their contracts honored for what is existing. I'm curious, what about recruits and commits to these sports? Are they essentially -- do they have the chance to walk into what they'd be walking into, or how is that going to be handled?
BERNARD MUIR: You're absolutely right; we're going to honor the scholarships. If you were a freshman, you were on aid and we have a commitment for the next four years, we're going to honor that and we want you to graduate from Stanford. For coaches, we're going to honor their contracts, and even because of this unique year, we're going to have some bonuses that we put in place so that they hopefully will stay for this year.

For recruits that have been already accepted and admitted to Stanford if they're coming in this year, we're going to continue to honor those financial commitments. But we also know that some might choose to go elsewhere and want to continue to play their sport at the Division I level, and so we will help, assist in that regard with our compliance staff and make sure that they have the opportunity to transfer. At every step of the way, we're trying to assist here. We know this is unusual and difficult, but we want them to have the opportunity to compete this year, and then if they so choose to stay at Stanford, we want to help in that regard, or if they decide to go elsewhere, we want to assist, as well.

Q. If Stanford is going through these severe type of budget programs, what do you imagine other Power Five schools are going to be going through if there is no football, and if the Pac-12 TV revenues were more in line with the SEC and Big Ten, would you have been making the same decisions?
BERNARD MUIR: Well, I mean, to answer your first question about whether other schools are going through this, I can imagine if there's not football, the pressure is going to mount. I'm not sure if every school is in a position to take such action. Again, we were running 36 sports, which is really unusual in this climate and looking across the NCAA landscape for Division I institutions. That was a high number. Other institutions might make a difference decision, but they're dealing with less programs.

As far as the TV revenues, when I look at a number of factors, the next school that looks kind of like us in terms of sport offerings is Ohio State, and certainly their budget is most likely double what we have, and they're generating TV revenues, their stadium is larger. It's a different -- sponsorship, how they approach sponsorship is different than how we approach it, and so you're not comparing apples to apples, so that would be a difficult comparison.

Like I said, we've been really unique. We've been punching above our weight. But at this moment, knowing that we had such a structural issue, we knew we had to change course.

Q. Are any athletes from these 11 sports currently on campus for voluntary workouts?
BERNARD MUIR: I'm not aware of that. We provided them the opportunity to -- we have a small number of student-athletes who are here, and if they are choosing to work out, that would continue. We would continue to support that.

Q. I'm just curious looking ahead into the future, how much of a runway do the 25 remaining sports get, and when do you expect to kind of reassess how viable it is to stick with 25? And then I'm also curious about have you gotten any feedback in terms of the athletes choosing to go to the club sports option that you put out in the letter, and how many of those sports do you think are going to take that option?
BERNARD MUIR: Well, let me just say this: We are committed to the 25. When I talked to our president, our provost, our board of trustees, they've all stressed the importance of athletics on this campus, athletics moving forward, making sure that we're fiscally responsible and sustainable. But we are committed to the 25.

Moving forward, we're going to have to, like I said earlier, provide further support to that effort, and so that's what we'll do moving forward. We're committed to that.

Give me the second part of your question one more time.

Q. I was just curious because you said in the letter that some of the sports can go club, and I'm just curious how many do you really expect to take that option?
BERNARD MUIR: We're going to have to work through that. Club sports for us is totally student driven, and so we'll have to figure out the interest. Fortunately we have a year's time to sort through that to determine the interest and see what sports can transition to the club sport level. But that will be based solely on student interest and providing the support and the safety in some cases to make sure that they can compete at that level.

Q. Given how things have looked about the fall sport season, since we've got you on the line here, what's your current confidence level about how things are looking as far as getting things going on time for the fall sport seasons?
BERNARD MUIR: Well, I think we still -- we continue to meet especially at the conference level with my peers in the conference each week to talk about a landscape, to talk about the situations we find our very schools in. I think we would like to have more discussion, some more time here, but I would expect by the end of this month we'll have to make some decisions on fall and see where we are.

But it's requiring a lot more discussion, and it's getting input from our medical experts on our various campuses and obviously talking to our CEOs and conference staff to ultimately figure out what direction we head in.

Well, I thank everyone for their time. Obviously a difficult day here on the farm, and we appreciate you following us and continuing, and we will support these programs that have been affected and then also look to support the programs that will continue here, the 25 sports that will continue here on the farm.

THE MODERATOR: Thank you, Bernard, and thank you all for attending.

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