I linked to this Bloomberg piece the other day. It paints a pretty horrendous picture of the finances of the Cal Berkeley athletic department.
By another measure, Cal sports are in big trouble. After completing the most expensive college football stadium overhaul ever, the Golden Bears now owe more money than any other college sports program. Hobbled by debt service payments, the athletic department ran a $22 million deficit last year and expects to end this fiscal year deep in the red.
A university task force is looking for possible solutions, including reducing the total number of Cal’s sports programs. Any cuts could endanger some of the school’s most successful teams, which cost a lot more than they bring in, and Chancellor Nicholas Dirks recently gave the group more time. “Everything is on the table,” said Robert O’Donnell, a lecturer at Berkeley’s Haas School of Business who co-chairs the task force.
“Everything is on the table” is kind of an ironic sentiment in light of the fact that a scant few days later, the school canned football head coach Sonny Dykes. Of course there’s a hefty buyout of his contract, made even worse than you’d expect because of the kind of dumbassery that’s unsurprising in the college athletics business (yeah, I use the term loosely).
With our intercollegiate athletics department’s typical management finesse, we extended our football coach’s contract about a year ago…and fired him this week. He walks away with about $6m in severance, but that’s OK because we’re just finishing up the zillion-dollar severance payments for the previous coach, and the AD who is now at Penn State, so there’s lots of money just lying around that would otherwise be wasted on fixing classrooms, or scholarships for non-athlete students who just play sports for fun and don’t put any eyeballs on TV commercials.
Add to that the money that will have to be laid out to bring in the next staff, and it’s lather, rinse and repeat time at the ol’ hacienda. Even better, Cal’s athletic director has no time for the Rule of Holes.
… Our objective is long-term financial sustainability for our department. In order to do this, we understand that investing in football is critical. We believe that this change will reinvigorate the program, stimulate lagging ticket sales and renewals, and energize our donor base.
In other words, he has to destroy the athletic budget in order to save it.
What passes for leadership in college athletics shouldn’t be entrusted with running a lemonade stand. But let’s keep insulating these idiots from the free market because… well, do they really need a reason?
Get The Picture 
As much bitching as there is about Greg at least we can claim that we have the exact opposite approach to finances.
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There is a middle ground between Georgia and Cal, methinks.
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True and it’s Eastern New Mexico University in Portales, New Mexico.
18 and 1/2 hours to Berkeley, 18 and 1/2 hours to Athens.
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Funny as hell!
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Having spent a large amount of time in Portales, it is a lot of hours to anywhere. Catching fly balls in the wind was a lot of fun.
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Mark Fox’s alma mater.
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Wonder how Demetris Robertson feels about his college choice about now….
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Think we could have used him last year? With him out wide, we win at least one game we didn’t this year, maybe more. He could have been an all-timer at WR for us.
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Yes, he seemed to be a big miss for us and could have made a difference in a couple of losses. In fairness to the staff, I think his brother had something against UGA and was more responsible for him going out of state, not sure we were that close.
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He is probably thinking that his degree from Cal could possibly be worth millions and millions more dollars than a degree from UGA.
He seemed like a sharp kid during the recruiting, a degree from Cal is pretty good.
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I doubt Cal would have even been on his radar if he hadn’t been really set on Stanford first. We will just disagree about the value of a Cal degree versus others but once you get beyond a very select few, you don’t measure the value in millions against other good schools. I think this was more an anti-Georgia decision than a strong Cal love. Didn’t hurt that the Cal QB at that time was rated one of the best passers (right or wrong.)
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He also was/is a very different kind of dude. I think hippie Berkeley really appealed to him.
It was a big miss for UGA, but at least he ended up somewhere that isn’t on our schedule.
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“his degree from Cal could possibly be worth millions and millions more dollars”
Yeah, but Cal doesn’t pay their players DURING college the way we do down here in the SEC.
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Maybe not. If he doesn’t make the NFL and remains in California, fewer people will know him there because college football is not as big there and it’s diluted between 7 programs. Somebody like, I don’t know, maybe Kublanow, might make a ton of money here in Georgia partly from his degree and partly from the name recognition he’ll have from being a Bulldog.
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And there really is no cache in CA from playing at Cal. Southern Cal–yes. Stanford–yes. Cal–no. Cal is historically a losing program in the eyes of most Californians.
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You just know they are just going to spend it all on buy-outs and fancy weight rooms.
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I love that comment.
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Cal student: “I’m buried in student loan debt. Any suggestions?”
Cal counselor: “Nope, but if find any good advice, let us know.”
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I fear this is the future of all but about 20 or so football programs. When the bubble completely bursts, it will be ugly.
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Yes, I also think we will see football programs shut their doors for financial reasons in the future.
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The ones that have a football stadium sitting directly on a fault line and spend al most half a billion dollars to earthquake proof it will shut their football doors. He ones without stadiums on faultlines probably won’t.
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The entire Cal system if in trouble. UGA now gets students from Cali that come to Georgia b/c they can graduate faster (in 4 years or less) than they can in the UC system due to class shortages in their preferred major. I’ve heard this specifically in regards to UC Davis. I assume if you get into UCLA or Berkeley it’s worth staying regardless of time.
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That’s just what they say. The real reason they come here is they know California is going to fall off into the ocean.
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…or maybe it will flip over like Guam if everyone walks to one side.
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leaving nothing but the calm serenity known as Arizona Bay.
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The financial health of the entire state of California is in jeopardy … and that’s without getting into a political debate.
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Unlike Kansas or Louisiana, right?
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Yep … a bunch of states have a financial mess on their hands
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If this country can survive $20 trillion in debt why not Cal football? Debt is a way of life now that seldom shutters anything too big to fail. There’s a bailout somewhere.
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The country can print/borrow money. Other organizations only have so much credit and no teasury department.
Besides most Americans are far more leveraged than the country is. The national debt is about 75% of GDP. If the USA were a person that would be like adding up your mortgage and your credit card bills and car notes and finding that you’ll make 1/4 MORE than than total this year. In other words if you owed:
50 on a house
15 on credit cards
10 on a car
And made 100k a year, you’d be in a similar “dire condition.” Most people would take that and run! But yeah, the sky is falling.
Anyone what to bet me on which way he national debt goes in the next 4 years? I got 2 to 1 odds that it goes up.
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You mean like doubling the debt from 10 to 20 trillion in 8 years. Accumulating more debt by himself than George Washington to GW. The hits just keep on coming Der. LoL
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Can a college athletic dept. declare bankruptcy? Then they could just lease their facilities back from whoever gets them on sale day.
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I declare bankruptcy!!–Michael Scott
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The President of the University of California System is Janet Napolitano. Cause and effect or just coincidence ?
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That’s what happens when liberals try to run a football program. You don’t see the Wharton School of Business football team in debt. Just build add a casino in the stadium and they’ll be rolling in dough.
(Before you fire-off a political retort, please note I’ve skewered both sides here.)
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Maybe they can include an agriculture school and have “experiment stations” (as UGA does around the state)..Of course instead of peanuts, corn, cotton, peaches, etc..they would develop and grow…something else.
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I had no idea that liberals ran UT and Auburn’s football program.
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Val’s debt problem can be traced to its Stadium having been built directly on the San Andreas Fault. “Earthquake proofing” renovations ultimately cost over $470 MILLION. If the University of Pennsylvania finds it has to put $470 Million in renovations to Penn Stadium it would be hurting, too.
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They could’ve used wooden bleachers or sloped hills like an outdoor concert setting for a whole lot less money. Besides a basic high school football stadium configuration seating 10,000 people probably works just fine at Cal for 7 out of 10 seasons;-)
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I’m no engineer or geologist, but it sounds to me like no amount of earthquake proofing is going to save that stadium when the next big one hits on the San Andreas. Northern California will be an absolute mess when that happens.
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With today’s tv and conference bowl sharing money if a college can’t break even with athletics, they have bigger problems than simply revenue level. Something has to give pretty soon. There might be 40-50 schools whose athletics break even or show some profit. The rest are reliant on student fees which are reliant, more and more, on student debt. The tipping point has to be near where students aren’t willing to go into debt to make sure the football coach and athletic department big wigs can continue to make seven figure salaries.
When the bubble bursts it’s not going to be pretty. I think it will be like a Jenga game when the critical piece is removed.
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I was quite surprised when they fired Sonny Dykes. He is a good coach. I assumed the only reason they fired him was that they already had an agreement from Chip Kelly to move across they bay. Then I saw that they were interviewing Niumatalolo… smdh. They want to be tech.
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I second the tv revenue sharing wtf is the problem opinion. If they can’t break even with over $20mil given to them for doing what they’d do anyway? Sheeeeeit. Typical cali economics I guess..
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Again, it is not “typical ” anything. In University of California ‘s case the football stadium sits on a major fault line. It runs directly down the middle of the field from end zone to end zone, and over the years joints in the stadium had shifted by over a foot. Geologists predicted that it there is a likelihood of a major earthquake since it has been over 140 years since the previous.
There is nothing “typical” about having to address the problem of a Power 5 team’s 70,000+ seat stadium being on a fault line.
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I’d think all those smart Berkley types who love to tell the rest of the world how they should live would have known better than to put a stadium on a fault line.
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It opened in 1923, and was designed and planned before that. Those “Smart Berkeley types” weren’t even born when it opened. California was a more conservative state in that time than it is now.
Why did Governor Reagan and his conservative Board of Regents not address the problem in the late 1960s and early 1970s?
It isn’t a political issue.
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