If you’re an SEC school, you’re not missing any meals.

USA Today published its annual report on athletic department finances yesterday and much of it is what you’d expect.  Basically, the rich continue to get richer.  So while you get the annual fretting about bubbles bursting…

NCAA president Mark Emmert says the very fact that so few athletics programs are self-sufficient demonstrates their worth in terms of building community and providing opportunity.

“A very small number of the 1,100 (NCAA members) have a positive cash flow on college sports, so those schools are making a decision that having a successful athletic program is valuable to them despite the fact they have to subsidize it with institutional money,” Emmert says. “The same thing is true for a lot of academic programs. So every school has to sit down and say, ‘What is this worth to us?’ ”

… it’s wise to remember the annual aspect of that.

Kansas State president Kirk Schulz, chair of the NCAA board of governors, believes the bubble metaphor is overwrought.

“I’ve heard that now for the last 20 years and I don’t want to be skeptical and say nothing like that could happen that would ever change the direction of intercollegiate sports,” Schulz says. But he compares it to predictions of a bubble in higher education where prospective students would one day decide that degrees for ever-higher tuition just aren’t worth it anymore.

“And guess what? We all have record numbers of people who want to come and pay these tuition rates and get these degrees from our institutions,” Schulz says. “So I’m a little skeptical about the gloom and doom of a bubble that’s going to burst and everything is going to go south.”

Even so, Schulz agrees that athletics departments cannot continue to outspend revenue indefinitely.

The SEC isn’t guilty of even that.  Every athletic department in the conference that reported – i.e., except private school Vanderbilt – disclosed that it took in more money than it spent in the last fiscal year.  When you consider how schools manipulate those numbers on the expense side, that’s pretty telling.

Only one team, Alabama (shockingly) reported a decline in revenue year over year.  Only two schools, LSU and Mississippi, reported revenue increases of less than $10 million.

Like I said, nobody’s missing meals here.

As far as Georgia goes, let Seth Emerson lay it out.

UGA ranked 15th nationally, and eighth in the SEC, in total athletics revenue, at $116.15 million, during the 2014-15 school year.

Meanwhile, the school ranked 25th nationally, and 10th in the SEC, in expenses, at $96.56 million. Only Missouri, the Mississippi schools and presumably Vanderbilt spent less. (Vanderbilt, as the SEC’s lone private school, did not have to report its finances.)

Georgia’s spending should be increasing a lot for the 2015-16 school year. The athletics department has outlayed more financial resources for new head football coach Kirby Smart, but had already increased the previous football staff’s recruiting budget as the summer of 2015. Plus, the school is paying more than $6 million in buyouts to Mark Richt, Brian Schottenheimer and Jeremy Pruitt.

The school is also building an indoor athletic facility budgeted for $30.2 million, but athletics director Greg McGarity has said the majority of that is being fundraised through donors.

UGA’s total from subsidies is $3.212 million, an amount higher than every SEC school except Auburn, according to USA Today.

When you net the expenses reported from revenues, Georgia stands third in the conference in, for want of a better word, profitability, behind Texas A&M, with that ridiculous revenue jump and Florida.  Nice subsidy, Greg!

*************************************************************************

UPDATE:  About that bubble bursting thing…

Yeah, I might hold off on that doom and gloom stuff a little while longer.

 

7 Comments

Filed under Georgia Football, It's Just Bidness, SEC Football

7 responses to “If you’re an SEC school, you’re not missing any meals.

  1. Baby, I’m a rich a man, baby I’m a rich man too.

    Like

  2. Russ

    Once everyone starts saying there’s not a bubble is when the bubble usually bursts. Given cable unbundling, rising fees for broadcasts, and lower viewer numbers, the bubble will burst one day.

    Scrooge McGarity may be a doofus, but his hoarding of funds may come in handy in the future.

    Like

    • DawgPhan

      I think that the bubble is more in higher education than in just the sports tv contracts, but the point remains. Almost no one sees a bubble form, it is why they are so destructive.

      Just like a home builder saying that people are lining up to buy his houses, why should he slow down, the same is true for higher education.

      Student loans are crushing americans. People are going to realize that they are not getting the same value from their money at college that they could get somewhere else it will burst.

      Like

      • Russ

        I’d argue with you, but as I’m starting to look at college costs for my kid, I realize that you’re likely correct. College costs are insane, and I can’t help but think it’s going to splinter into many more specialized training/education opportunities in the future.

        Like

        • DawgPhan

          The main thing I see when I think about tuition costs is that the low ROI majors subsidize the high ROI majors. At some point this has to break.

          South Campus pays for North Campus. At some point they are going to figure it out. You pay as much for a Family and Consumer Science degree as you do for an MIS degree. That MIS degree is likely worth $1mm more than the Family and Consumer Science degree and yet they both cost the same.

          Like

          • Russ

            Well I figure the north campus students had more fun while I was studying, so maybe that makes up for them subsidizing my engineering degree. 🙂

            Like

            • DawgPhan

              sure…but the mechanics are the same.

              People are realizing the non-sports people are subsidizing the sports channels so they are cutting the cord and saving themselves the money.

              The same levers are at play with higher ed.

              Like