Something’s gotta give?

The SEC generated $1.38 billion in college athletics revenues in 2014, but the conference’s three-year growth average was just 4.74 percent.

Meanwhile, expenses for the average D-1 team increased 48 percent between 2007 and 2012 – and the top 25 spenders (nine of those from the SEC) increased spending by 72 percent over that five-year period.

Maybe I’m missing something, but over the long run, those trends aren’t going to end well.

19 Comments

Filed under It's Just Bidness, SEC Football

19 responses to “Something’s gotta give?

  1. Bulldawg165

    “but over the long run, those trends aren’t going to end well.”

    Especially once they have to start paying for labor.

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  2. ChilliDawg

    But they could always make it up in volume!

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  3. TennesseeDawg

    College presidents: We better cash in faster before the bubble bursts

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  4. doofusdawg

    One of the problems is that everyone is only interested in short term because the decision makers want to get paid and take care of themselves and their cronies before the party ends. It’s the same with government and corporate America.

    One could argue that uga is trying to buck that trend. There is plenty of evidence to support that belief… and thus the cries that we have fallen behind our competition. But it’s clear that the fan base cares more about winning now than it does about what the budget looks like in 2018. Something has to give in Athens. My old partner used to joke about there being a friction fire… the mortgage rubbing up against the payment. I think we are getting ready to have a friction fire at bm… the oc and dc salaries rubbing up against the administration.

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  5. The way these administrators think can be demonstrated by understanding that 5% of 2 billion is the exact same profit in actual dollars as 20% of 5 hundred million . As long as the gross keeps going up they will have the raw dollars to spend. I hate to agree(on this site ,anyway) but as dufus said you could argue that McGarity is at least trying to slow the bus down a little. Does UGA really want to be the first bus to drive off this cliff/bubble? I believe Alabama will probably show us where the mines in this minefield are located. Run Forrest Run

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    • Scorpio Jones, III

      Here’s something to think about….When Bear retired, then took a dirt nap, Bama, in spite of all that winning, all those bowls…was BROKE. How could that be, you might ask…I have a few ideas, but they were, in fact, broke or so near it nobody was willing to write a check.

      Only in this decade and going forward does winning big equal making big bucks.

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  6. sorry didn’t mean to misspell your handle “doofus”

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  7. Expenses vary relatively little from program to program. The biggest variation is in revenue. These programs are all more profitable than the most profitable Fortune 500 companies. Colleges and Universities as a group may have the poorest financial managers of any industry and tuitions are inflating more quickly than any other industry except healthcare. But athletic profits are stunning, which is especially significant because they are forced to support unprofitable women’s programs under federal law.

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  8. I should have said profitable in terms of profit margin percentage. Obviously the total dollars for major companies are much higher. But their percentage of profit is much lower than the athletic programs listed.

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    • My understanding is that the SEC network royalties are limited in years 1&2 for startup costs of Mickey. However per team payouts are expected to be 20-40 million per year thereafter.

      So what gives, just as stated above, is the top line.

      We are falling very far behind our Top Tier SEC and ACC competition in reinvestment in the cash cow golden goose Football Program. We are not in the middle of the pack… We are stragglers and as Bluto pointed out, falling in the Forbes Value rankings as a root cause result.

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  9. AusDawg85

    Can’t see how paying mediocre coaches of mediocre teams $4mm a year is fiscally irresponsible.

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  10. A10Penny

    Even with revenues flat there is a LOT of room for expenses to grow at the major programs before they start losing money (on an annual basis). Capital expenses are another thing entirely…and maybe B-M thinks that their prudence will eventually equal a competitive advantage in that regard.

    I think the ‘something that’s gotta give’ at many schools will be the profits shared with other sports and the university.

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  11. Every entity has turned into a, “what Kind of increase do you expect in Revenue in 20??. Ridiculous 🐍 There’s a Peak….to everything. That’s when you sell….and get thee outta there.

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    • Dawgoholic

      Look at the football only revenue changes. The UGA AD has increased expenditures by nearly 30 million over the last 5-7 years. Football is a small part of that but a large part of the increased revenue. The market will support football increases but not the other largesse that is commonplace in too many athletic departments, including our own.

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  12. DugLite

    The state of Alabama needs another hobby.

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    • They have tried at least three Football teams. Lost lots of money. A friend of mine played Quarterback for the B’Ham Barracudas. He had a multi million dollar contract. He and his family moved to Valdosta where last I heard he was Coaching. Birmingham cannot support Pro Level teams of any kind. It is very different over there.🐘

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  13. So UGA is the 3rd most profitable in terms of dollars (over $50 million profit) behind only Texas (with their network) and Michigan (with their large stadium and pricey tickets).

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