The University of Arkansas Board of Trustees this afternoon approved the signing of a loan agreement for up to $ 19.1 million to help the Razorback Sports Department make payments on facility bond debt this year and next.
The loan is a way to refinance annual debt payments and is also seen as part of other cost-cutting efforts being made due to the impact of the pandemic on athletics, UA officials told the board.
Hunter Yurachek, director of sport at the University of Arkansas, Fayetteville, told board members the department now expects sales to decline by at least $ 20 million this year from the $ 124.6 million originally planned for the year.
“Further failures and income can be expected if additional events are canceled or the capacities of our venues have to be further adjusted,” said Yurachek.
The loan with Regions Bank and affiliated companies bears a maximum interest rate of 2% annually and is to be repaid by September 15, 2028.
Clayton Hamilton, UA’s chief financial officer for the sports division, said the loan would “not add to the total debt for the sports division or extend the number of years of outstanding debt beyond the current 17 years.”
Hamilton said the debt payments are about $ 19 million. The loan is to be “only interest-bearing” for the first three years and then repaid over five years.
The decision was accepted by the board without objection.
University officials said last month that most employees in the sports department would see pay cuts starting September 1, bringing total expected savings of about $ 3 million.
A new football schedule due to the pandemic calls for the Razorbacks to play five home games in Fayetteville instead of seven. The university has also announced that attendance at a stadium with a capacity of 76,412 will be limited to 16,000-17,000.