I will say this: with regard to the NCAA’s new recruiting guidelines, Greg McGarity has been proactive in one way – working to stuff the genie back in the bottle.
Greg McGarity, the University of Georgia athletic director, gathered the coaches from various teams in his office one morning several weeks ago to discuss the pending deregulation of recruiting in college athletics.
McGarity became the shopkeeper of a candy store and told his coaches to stuff their pockets. He gave his coaches 15 minutes to present ideas about all they could do under the N.C.A.A.’s new legislation, which includes no limit on recruiting contact with high school athletes, no limits on recruiting materials that can be sent in the mail and no limits on staff size to use in recruiting, meaning they could hire a whole different staff in football to pursue players.
The punchline?
McGarity could see his athletic department’s budget surplus growing smaller.
Can’t have that. But what about conference rivals who don’t mind spending a few more bucks (which they’ll certainly have, thanks to the new TV deals)?
McGarity said he talked to four other athletic directors in the Southeastern Conference who were also opposed to the legislation, and his goal was to have the SEC vote, 14- 0, to override the legislation. The SEC’s athletic directors are scheduled to meet next week in Birmingham, Ala., to consider the legislation.
Does Nick Saban have time for that shit? It’s not like he isn’t winning already. But it sure sounds like it would make his job easier, especially when some are clearly reluctant to engage him under the new rules.
And by “some”, I mean… well, I think you can guess.
“Some school is going to want to get on the high dive with this and go all in and spend and spend,” McGarity said. “It is going to start a round of competition among schools that is going to be limitless.”
If this doesn’t work, maybe McGarity can lobby for the size of an athletic department’s reserve fund to be included in the new playoff selection committee’s deliberations.
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UPDATE: John Infante thinks this is a problem for the haves.
The reason the haves are objecting is that the more arms races there are, the lower the ability of the haves to win the ones that matter over the have nots. If Georgia’s coaches burn a budget surplus over 400-page media guides and extra staff that do nothing but watch recruiting film and call juniors, it hampers their ability to poach a mid-major’s coach or retain assistants.
Meanwhile, it offers an opportunity for the have nots and especially the middle class of college athletics to get smart and spend more wisely. They can use the looser recruiting rules to get the most out of what they have and save money to spend on more important things.
Eh, maybe. No doubt some of this will always be a matter of spending money wisely. But there’s a reason why most of the top programs spend more money than the others. I don’t see how the new recruiting rules will have much impact on that.
Get The Picture 
What purpose IS there in holding on to that money? And I don’t mean that question rhetorically, either. Someone help me understand; I mean we don’t get victories based on how big our reserves are, do we?
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Suppose Mark Richt decides to retire to a life of philanthropy soon. The next guy hired might be a dud, which often happens after long and successful head coaching runs. He’s got to be bought out. Maybe Fox doesn’t get the basketball program on track and he’s got to be bought out. Attendance in both sports falls as the mediocrity sets in and fans realize that watching in HD from the couch is acceptable and a lot cheaper for following middle-of-the-road teams. Suddenly the program isn’t running a surplus anymore, and that’s when the reserves need to be there.
That is basically the situation at Tennessee applied to Georgia, and it’s not that far-fetched. UGA doesn’t have near the debt level that UT does, so it won’t get into as bad of shape, but you get the idea.
The dirty little secret of college athletics is that as more money comes in, more money goes out, and nearly everyone has more debt than you’d think. ADs all over are scared to death of living room setups siphoning fans away from stadiums and arenas, so reluctance to run down reserves in the good times is not a surprise at all.
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Building on this, let’s say that we do throw the kitchen sink at recruiting and resources on hand to make the big three everything they can be (which obviously drives this “surplus”–particularly football). Then let’s say it pays off by improving recruting, which leads to winning more games, which, in turn, leads to an increase in donations from hungry fans looking to buy season tickets. Then the cycle repeats itself.
I do not see how doing all we can to win within the rules that everybody plays by will hurt our surplus in the long run. If anything, it will probably be a wash.
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Based on how poorly Notre Dame played in January, I think we can say that Georgia was basically a few yards away from winning a national title last year. Had the last two minutes in Atlanta gone differently, are we even having this discussion?
Kansas State won 11 games after spending under $50 million on football; Texas won nine games after spending something in the neighborhood of $130 million. Tennessee has far outspent UGA for years. How you spend the money is more important than how much of it you spend.
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I politely suggest that you recheck your figures.
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These figures?
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Those are for the entire athletic department.
See my link below if you need the football figures.
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Well, yeah. It’s not like ‘Bama hasn’t made a few visits to the title game recently. The program is on a run of sustained excellence and some of that has to be chalked up to how it spends.
If your point is that spending smart is more important than spending more, that’s fair. The problem is that you can point to a few institutions – Alabama, Ohio State, Florida – that do both.
I’m not worried about how Georgia keeps up with the Mike Hamiltons of the world. It’s the Jeremy Foleys who concern me.
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If the roles were reversed, and Georgia’s athletic department was spending $20 million more a year than Alabama’s was, would the results be reversed? I’m inclined to say no. Saban is a great coach who can bring in great players and win big anywhere. When UGA was wandering in the Willie Martinez wilderness, it was not a lack of spending keeping things down.
I really think there’s diminishing returns at the top of the revenue and spending chain. Spending $100 million instead of $80 million yields far less of a boost than spending $80 million instead of $60 million does. There is a threshold somewhere at which you’re spending enough; nearly every advantage a program can get from then on comes down to coaching and player development. Programs like Georgia, Florida, and Alabama are above it; programs like the Mississippi schools and Kentucky aren’t.
Also, McGarity isn’t really doing too much differently here with money than Foley does. He too takes care to always run a healthy surplus.
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If you’re arguing that Saban could win big at a school that doesn’t spend more than its competitors, Nick doesn’t have time to test your hypothesis.
If you’re arguing that Alabama spending big bucks on a recruiting staff doesn’t give them a competitive advantage, Saban disagrees.
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Again, I don’t completely disagree. As much depends on what you spend your money on as how much you spend.
But if Saban is as smart as we both believe he is, there must be something to spending more money. Because he’s sure guilty of it.
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Per the chart Cube linked to –
Georgia football: $18,551,074 Expense; $71,016,237 Revenue
Florida football: $24,657,557 Expense; $68,915,750 Revenue
Not exactly the same to me…
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No, but let’s not forget who has gone to Atlanta from the East each of the last two years. On-the-books expenditures didn’t buy UF any of its national or conference titles, and they did nothing to stop the wheels from coming off at the end of the Meyer era. Foley didn’t massively cut the budget in the Zook years either.
And with those numbers, we still see that Tennessee and Auburn outspent Georgia for that year. So did Texas, Texas Tech, and Washington. Iowa was basically even with UGA. If those numbers hold for the years since, well, it’s hard to say that money was an overriding factor in the teams’ performances over that time.
Also, note that Wisconsin and Arkansas spent roughly the same amount of money total for that year. They just spent that money in different places. A huge reason why Bielema jumped down to Fayetteville was Arkansas’s willingness to spend more money on coaches. The figures have changed since then, of course, but it bolsters my point about where money is spent being the important factor.
It’s also worth mentioning that care needs to be taken when looking at these kinds of figures. I’ve done a few dives into the financial side of college sports over the last year or so, and the methods of accounting vary wildly from school-to-school. On that link, Oregon doesn’t include contributions in the revenue, but most everyone else does. Tennessee lists under $400,000 in severance payments for the year, but Fulmer’s separation agreement says he got $125,000 per month during the time these numbers apply. There are all kinds of gremlins in the numbers that schools release, so making true apples-to-apples comparisons across many schools for things larger than specific categories (e.g. coaching salaries) is impossible.
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I get your point, but I could cherry pick a recent period that makes UF look a helluva lot better than UGA.
And the bigger thing here is that, between the rapid increase in revenues and the new recruiting rules, we’re not in a static time. If McGarity is simply waiting to pick his spots once he susses out the new landscape, that’s fine. If it’s all just about making bank, it’s not so fine. Because there are plenty of smartly run SEC programs that will put that extra money to good use.
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I initially thought so but the data shows something different. I realize this is only one example but Bama outspends us by a large amount and their profit is substantially smaller. It’s possible that their profit catches up to ours over the long haul but I don’t know.
http://www.bloomberg.com/data-visualization/texas-tops-college-football-with-75-operating-profit/
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You have a point, but how much of UT’s financial woes can be traced to (1) facilities upgrades that haven’t been paid for; (2) the local taxing situation; and (3) the recently discontinued $6 million annual subsidy to the school the athletic department contributed?
Some of your argument sounds like people comparing the US to Greece. Both have financial issues, but they’re not that similar.
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The facilities upgrades are the biggest issue of those three. The taxing and subsidy might hurt, but I don’t think it’s that much (and Florida donates $6 million to the university every year with no issues). Those aren’t new things, after all, and the budget should have been accounting for them all along. As Andy Staples put it on the day when that story dropped, Tennessee is house poor. It took on debt that it could manage with the revenue streams it had at the time, but those streams fell and made it far harder to deal with.
I was holding up Tennessee more as a cautionary tale of how quickly a budget can get thrown off by buyouts and falling attendance. Those are the real stories here. Had Hamilton hired a good coach to replace Fulmer and Neyland was still selling out, the school would be in far better shape financially regardless of taxes or annual transfers to the university.
Things at Georgia won’t get as bad as they are now at Tennessee, but they still can go south quickly with some bad luck. Prudence in good times keeps the bad times from being so bad.
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The other factor in play here is that the money from TV will keep increasing. McGarity could shake loose the purse strings in the coming years with little negative impact.
As I mentioned in a prior post, it’s relevant that UGA let itself fall behind in the SEC assistant coaching salary arms race. Richt’s loyalty to his staff softened the blow of losing key assistants for a time, but that only went so far. It’ll be interesting to see if Bobo joins Grantham in getting a multi-year commitment soon.
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Hiring an additional 3 consultants on with 1 or 2 year contracts at 100k to 150k(this has to be at the high end of the salary scale too) a year is not gonna break the bank on UGA’s surplus.
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Meant that post for Year2
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Good explanation of what the school administration must, in part, be thinking.
But it means this cash reserve amounts to an insurance policy against the possible incompetency of the athletic director. It serves as a tool by which he may dig himself out of any hiring hole he creates, and it begs the question of who the reserve primarily benefits, UGA athletics or UGA’s athletic director.
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I just read the average NFL scout make 90k, we can easily afford to hire 5 or 6 to scout/coordinate our recruitment efforts and not put a dent in the budget surplus.
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McGarity likes to get drunk at the SEC meetings, whip out his surplus and brag about how big it is
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LOL
“Suck on that profit margin b*tches!”
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+1.
Everyone is impressed until they discover he is still a virgin (as far as major sport championships go).
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Tennessee.
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I say Big McG loans the surplus to UT and takes a lean on Neyland stadium. That way Richt and MacGarity can say that UGA owns Neyland stadium and mean it.
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Perhaps Mr. McGarity will fight the good fight to get the conference to limit the rules, then when he loses Georgia will join the spending race.
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And perhaps not.
Realistically, the best we can probably expect is that if Georgia does embark on a course of allocating more resources to recruiting, it will be on a more restrained basis than other SEC programs.
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Of course we hope Greg McGarity is smart enough to know when he’s beat and join in.
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Seriously, if college football turns into Major League Baseball where the Yankees and Red Sox outspend everyone else and the rest of the league tries to keep up while spending half of what the big market teams do, then fuck it all.
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Except for the part where we’re the red sox, brother.
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Except in that metaphor we’d be one of those teams that could compete financially with the Yankees, but sits on its damn money (like the Angels prior to the offseason they signed Pujols.)
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Until we spend the Pujols-type money, we are the Chicago Cubs.
Big market team who doesn’t have to spend money on a competitive farm system and doesn’t want to.
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I hope there’s no scenario where, if UGA loses all their games, they get to move the team to Albany.
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We are already to that point in college football. It’s what the non-BCS programs have been complaining about for years.
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Hopefully this will be a move toward each conference governing itself and an end to the NCAA
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Great post Senator.
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The only govenor on this arms race is the 25/85 limit. You can rest assured that Alabama will get the first 25-30 then the rest of us mere mortals can fight over the rest.Use all of the admin staff that we have that are sitting around during the football off season to recruit. It sounds like it will be low cost admin types that will be needed most once you have the chief recruitor.
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Time to realign the SEC to the haves and the have nots (and the will nots).
SEC realignment – Football:
Haves:
Alabama
Auburn
Arkansas
Florida
LSU
South Carolina
Texas A&M
Have nots:
Georgia
Kentucky
Mississippi
Mississippi State
Missouri
Tennessee
Vanderbilt
Basketball: swap Kentucky and Missouri for Auburn and South Carolina.
Baseball: swap the Mississippi schools for Auburn and Alabama.
This is your new SEC.
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Why in the world would you list Georgia under the “Have Nots”? We can match any school in the conference in terms of resource advantages.
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Georgia is a “have not” because they are a “will not”.
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You’re seriously going to put Arkansas in the have’s and Georgia in the have nots?
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The fog is lifting, and the picture is coming into focus. The UGA athletic department is not completely committed to winning. The Mayor first turned me on to this a few years ago and I was extremely skeptical. However, this is a drum beat that is increasing in volume by the day. This recruiting topic provides further proof that the UGA athletic department plays the role of the chicken at breakfast, while the LSU’s, Bama’s and Florida’s of the SEC play the pig. One is all in and completely committed…the other, not some much. The Dawgs = No So Much.
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Any chance at making history will require risk. This is the challenge of leadership. Will a company decide that the bottom line is the paystubs of it’s executives or will it risk new, innovative (and costly) products at the chance to change the industry and increase the paychecks for everyone in the company, including the janitor? Will a church decide that paying the bills is the definition of success or decide to invest in life-changing ministries that COULD transform the community? Will a family decide that the family budget just can’t make it work for mom or dad to go back to school (because you’re not guaranteed a job after that anyway) and ignore the possible doors that will be open after an education?
It’s all about what is the definition of winning and/or success? If we want to make history, if we want to win championships and change the culture of our program forever, then chances are it will require costly investments and risks. The catch (and risk) is that you can’t promise it will work. McGarity can promise that there will be a surplus if we maintain spending at current levels, and he’s fairly satisified with where we’re at as a program (after all, we were only 5 yards away, right?). McGarity is no fool either. He also knows that a National Championship and Final Fours would entice more fans to attend, buy T-shirts, and more students to want to come to UGA. Those victories will guarantee even greater revenue and profit than we currently enjoy and will far outweigh the new expenses we put into lax recruiting rules. What McGarity can’t promise is that we WILL wiin if he DOES spend the money. That, my friends, is the risk. And that is the challenge of leadership.
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Great post, it’s gonna be interesting to watch, for sure… 😉
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Good points. One thing that I don’t understand is our flat out refusal to build the indoor practice facility. Auburn finished building one about two years ago that cost $16.5 million. That amount is not even a third of one year’s worth of profit for our entire athletic department. The current coach has wanted one for a long time. The previous coach wanted one. More than half the conference has one. There are logical reasons and benefits to having one. I just don’t understand dragging our feet through the mud on this just to build up our already huge surplus.
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Sorry, that should read “There are real benefits to having one.” I butchered that sentence.
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An indoor facility would take up around 80,000 square feet plus and additional 9000 of support square footage. I don’t know where we could put it without losing the sod or artificial turf. Indoor facilities are for bad weather and recruiting. Since the Barners have built their new indoor have they gotten better because of it? I guess their recruiting has picked up.
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The possible location quandry was a non-issue at one time. When they decided to expand Butts-Mehre, Richt talked about how he was given a choice of putting in the indoor practice facility or doing a bunch of smaller projects (including expanding Butts-Mehre). That means that they had the room for it at that time. Not sure if they do now b/c of the expansion of BM.
As far as your Auburn question goes…have any of the other schools that put in IPFs got better b/c of theirs? It’s a ridiculous question to ask b/c of how many different variables go into determining whether a team/program gets better. However, I would like to ask Saban if they practice in theirs when there’s bad or semi-bad weather in the weeks leading up to their SEC Championship games. I’d be more than willing to bet the answer is yes. I’d also be more than willing to bet that he’d be able to list off several reasons why they do it. And then there’s also the practice schedule protection it provides throughout the year, as well as the recruiting advantages.
I’m not about to sit here and try to tell you that an indoor practice facility is the end-all, be-all for a program. It’s not killing us to not have one. But is it hurting us? Maybe. It’s a tool and a piece of a program. And we have the money for one and have had the money for one for a long time. It makes no sense. At least, it made no sense why we didn’t build it when we decided to expand BM. Now we have the possible excuse of not having enough room.
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Since we don’t want to spend what our competitors do on baseball, we could just put a cheap indoor practice facility where Foley Field is now.
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The possible location quandry was a non-issue at one time. When they decided to expand Butts-Mehre, Richt talked about how he was given a choice of putting in the indoor practice facility or doing a bunch of smaller projects (including expanding Butts-Mehre). That means that they had the room for it at that time. Not sure if they do now b/c of the expansion of BM.
Richt was following the company line as best he could. Space has been and will always be an issue of concern for development at UGa. Any development. Summery is that there is just so much dirt to put stuff on and eventually older pieces will be “revitalized”. K?
As far as your Auburn question goes…have any of the other schools that put in IPFs got better b/c of theirs? It’s a ridiculous question to ask b/c of how many different variables go into determining whether a team/program gets better. However, I would like to ask Saban if they practice in theirs when there’s bad or semi-bad weather in the weeks leading up to their SEC Championship games. I’d be more than willing to bet the answer is yes. I’d also be more than willing to bet that he’d be able to list off several reasons why they do it. And then there’s also the practice schedule protection it provides throughout the year, as well as the recruiting advantages.
It didn’t seem to me to be a ridiculous question when I posed it and …. still doesn’t. To me. I consult on a lot of developments and when to phase them and so forth. So you are saying that Saban overcomes lost time on the practice field because of the covered practice pavillion? I recognize how precious time on task is for a ball team …. but your reaching a bit with that. imho.
I’m not about to sit here and try to tell you that an indoor practice facility is the end-all, be-all for a program. It’s not killing us to not have one. But is it hurting us? Maybe. It’s a tool and a piece of a program. And we have the money for one and have had the money for one for a long time. It makes no sense. At least, it made no sense why we didn’t build it when we decided to expand BM. Now we have the possible excuse of not having enough room.
Just like some of the questionable (imho) to spend what they did on stadium enhancements (private suites). I’m not impressed with how they negotiate or qualify expenditures. Adams is not following the Saban method and nor will his replacement. That is why he is the replacement. We are not Alabama but we make a pretty good profit with minimal risk.
I don’t see that changing.
Jobs held on to Apple cash for a reason. Samsung is showing us why.
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Richt does bus the team to use an indoor practice facility of the Falcons, doesn’t he? That costs practice time, incurs money and classroom time. The question is whether that hurts our team overall and so far the answer is “No.”, however, that is not easily detected. It was of major concern 5 years ago to build the indoor facility soon, but we see how that worked out.
Y2, sUGArdaddy and you have braced this issue for historical and present-day review such that we have a workable set of facts to pursue the issue of IPFs while keeping a watchful eye askance for expenditure of overall monies available to the program. It’s great to be involved in a blog that has professionals in accounting, law and scofflaws in general assisting our athletic administrators to keep it straight in the road. Sic’em Dawgs!
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The update doesnt make any sense…how does having a larger media guide impact our ability to hire assistant coaches? that we would have less money to spend on them? that doesnt make any sense whatsoever.
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“On the wish list were 200-page, four-color brochures. Fathead posters made in the likenesses of recruits and stuffed inside media guides. Videos of a recruit in a Georgia uniform. Four or five extra staff members devoted to recruiting.”
I think what he means is that if deregulation spawns the above as overhead, there’s no choice left except to drop the austerity bomb on the assistant coach line item. In a way that makes sense. Nothing has ever gone wrong with deregulation. Besides which feeder program isn’t going to need bigger media guides because those presently existing are unable to accommodate Fathead poster dimensions where size means everything and burner phones
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