Georgia is embarking on a long overdue upgrade of Foley Field, one that involves asking for donors to pony up serious money to the cause before Butts-Mehre will chip in the first penny. Seth Emerson, bless his heart, asks Greg McGarity the obvious question about Georgia’s precioussss reserve fund:
Now here comes the sticky question: Georgia currently has a reserve fund of about $70 million, so why not just take from that, rather than ask for money from donors?
McGarity, in an interview, said using the reserve fund should be the last resort.
“It would be like you or me dipping into our 401K. You only want to do that when it’s absolutely necessary,” McGarity said. “In the meantime, we do feel like there will be a response from our donors to raise 50 percent of the funds necessary for this. That is a funding model that was used at the University of Florida on projects of this nature, and it’s one that we’re going to use on this model also, and basically do it up front.
“Sure, there are a lot of things that we could do with our reserve. But what we want to do is use that reserve only when it’s essential to use. … The reason we are in such good financial shape is that’s been sort of a philosophy for a number of years: use the reserve when that’s absolutely the only option you have. And in a situation like this, there are other options.”
Only at Georgia do you look at capital improvements to an aging facility as necessary only if nobody else will pay for them. Until that happens, promise ’em anything.
“What we are going to do next is going to wow people,” head coach Scott Stricklin, who was hired a couple weeks ago, said in a statement. “At some point, when a recruit is on this campus, we need them to say wow. And that is what Foley Field is going to be in the very near future.”
I figure he can get away with showing recruits stadium mock ups for at least a couple of years before they start asking questions.
And you still wonder whether Richt will get an indoor practice facility. Know anybody that wants to buy one?
Get The Picture 
To the best of my knowledge I have never been asked to donate towards Foley. If so, the ask obviously didn’t make an impact. And I give to football at an above avg level with a corp match and I’m a previous season ticket holder for baseball.
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I was about to comment that it sounds like McGarity learned well from Jeremy Foley during his tenure at UF and his comments confirm that. UF also has a huge reserve that is never used for capital projects. The indoor practice facility issue also comes up here as well, but Foley seems to think it unnecessary and neither Meyer nor Muschamp has pushed for it.
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McGolem indeed. Strikes me as more CPA than CFO . . . much less CEO of UGA Athletics.
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As I posted on GSB, I don’t think McGarity’s comparison is apt. There’s no early withdrawal penalty for withdrawing from your reserve fund. Conversely, the federal government won’t let me hoard tens of untaxed millions in a 401k.
The more apt comparison is pulling a little mad money from your colossally huge and inexplicably stagnant savings account to buy a few shares of a growth stock. Which the apocalypse preppers in our AD are apparently too cheap to do.
I guess the one argument I could see for this is that, if you’re going to be harassing donors for money anyway, you might as well have a shiny new project to dangle in front of ’em. Probably an easier sell than “Our stratospheric cash pile isn’t quite at ozone levels yet.”
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McGarity’s 401K analogy strikes me as pretty incoherent. The 401k is a retirement account. I don’t think Butts-Mehre is retiring at age 65, moving to Boca Raton and living off 401k savings and Social Security.
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What I’d wonder is why can’t the reserve front the money? Begin improvements now, if you need to use the reserve fund, so be it, but let fundraising continue and replace any money spent from it over time. I’m not sure why we need to raise money before starting the improvements, when it’s not like McGarity and Co. aren’t going to keep pushing for donations going forward frequently.
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Once the spades go into the ground it is much more difficult to get people to donate. The thinking is that the donors will see that work has started, and, therefore, they don’t really need my money to complete the project. That is why no work will start until the goal is met
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I had an interesting conversation with an assistant AD at Tennessee last week at a conference. He said that the funny thing about all the heat Mike Hamilton gets for Tennessee’s cash reserves is that this is actually good shape for them, compared to past years. They’ve always had a culture of zeroing it out, otherwise the University would claw at it. The fact that they’re cash-flow positive right now is unusual, as they routinely went in the red under Dickey.
The trouble they’ve had is that their personnel model got whipsawed. They went from having a couple of major coaches with decades-long tenures to running through multiple coaches quickly in an era of steep buyouts.
Anyway, I’m not holding UT up as an examplar of financial management, except to say that, when you’ve got stable coaching like Georgia has (and Tennessee had), you can invest a lot more aggressively than Georgia currently is. That is, unless McGarity foresees us suddenly and immediately having to fork over $70M+ in buyouts.
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Actually, the best comparison I can think of would be Microsoft, with $75B in cash and equivalents, postponing a Windows release pending the issuance of a secondary stock offering.
Wall Street and consumers would go ballistic.
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And even then, at least investors could sell their shares.
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” I don’t think Butts-Mehre is retiring at age 65, moving to Boca Raton and living off 401k savings and Social Security.”
Wait what?
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Oops, it should be Costa Rica instead of Boca shouldn’t it?
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It is pretty typical for non-profits to leverage the funds to get more funds. In the end the UGAA will put money towards foley as well as raising some funds towards the improvements.
I really dont see any issue here. This is fairly straight forward stuff.
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If you think a major college athletic department is a typical non-profit, I’ve still got some terrific ocean front property in Hahira I can let go to you at a great price.
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I think it is pretty typical for major conference athletic departments to cost-share on improvements with new pledges. It gives them a good excuse to call the major donors, and donors are a little more receptive to the call: “What will you commit to help make bulldog baseball a success?” vs. “We’d like our reserve to be higher. What can you give to make that dream come true?”
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Ok. Have you received that call?
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Didnt say that they were a typical non-profit, but rather they are just doing something that is very common.
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To be honest, the project is a little underwhelming, and this whole situation is f***ing depressing.
Better than nothing I guess (admittedly does look better).
Hey, you know what would make getting the word out easier next season? A loooong overdue statewide radio network. Gotta put this team and the names of its fine players in the state’s consciousness to grow support a la the LSU model.
Y’all have a great day! 🙂
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Unbelievable. Some folks must be making some serious money on having that $70 million invested somewhere.
We rank in the bottom 2 or 3 in the conference in baseball facilities and we won’t use any of the biggest surplus in the conference to improve them. Un-freaking-believable.
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^ This.
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That new practice facilty did wonders for basketball recruiting.
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Isn’t this a scaled-down plan for Foley?
I recall in the master planning of a few years ago (same master docs that had tentative plans for wrapping the 3rd deck in Sanford around to the luxury boxes) Foley Field being completely re-oriented, with the home plate backed up against one of the corners of Kudzu Hill.
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That doc had 2 options for Foley. Flipping the field was a logistically terrible idea.
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The reserve fund is pledged to secure the bonds sold to finance previous and future capital improvements. It’s the reason the UGAAA has very low interest costs.
That said, there is almost certainly room to tap into it if they wanted to do so.
I think the only party that would lose out if we tapped into it would be the bankers managing the funds. I’m sure those people aren’t important though, right?
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Gave to the UGA Baseball Support Fund, but the Foley Field Renovation Fund is different. Will give to that fund. Appears the funds are different from contact with the UGAA.
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Funds are like at your local First Baptist Church…one for pews, hymnals, grounds, buildings, and etc or your local high school…football, cheerleaders, band, baseball, girls softball. Cut that check make sure it goes to the fund you have in mind. Would like to see an indoor practice facility for football and baseball. Some high schools have limited indoor baseball facility
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Does the new coach get to stay around long enough for the field to be built?
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2017. That’s about the earliest season before that facilty would be ready. 10 years past due. At a minimum.
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Is it just me, or is anyone else bothered by the staircase in Sanford on the NW side that looks like an unfinished cement block? Ever since the 600 level opened in 2003, I’ve been waiting for them to improve it, but I guess it’s not in the cards.
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Yes I have noticed it and it does bother me. I have been wondering when they were going to finish it. I thought at one time I saw some renders of that side with a concrete facade with “G”. I do think it looks bad.
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Yes! I’ve been hoping they would improve the façade as well. It looks like an unfinished fire escape or something. I started to think I was the only one after mentioning it a couple times in other forums and getting no traction. Dang, I’m a freaking downer today…,but still, it does look pretty bad.
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I sent McG a photoshop of that facade mocked up like the side of a pair of silver britches. Looked cool as hell. I never heard back.
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“It would be like you or me dipping into our 401K.”
When is the UGA Athletic Association going to retire? I don’t think there are many financial rainy days in the SEC.
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Donate, and it will come.
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