77 million drops of rain

Ladies and gentlemen, your dollars at work… sort of.

Through it all, Georgia has remained committed to not touching its substantial reserve fund, which DawgNation has discovered includes an additional $32 million that is invested through the school’s foundation.

All the while, however, Georgia is pledging not to dip much into its reserve fund. That fund includes more than $32 million that is invested with the school’s foundation, and not highly publicized.

The money is not secret, necessarily. It is included in a footnote in the audited financial statement, a copy of which was obtained by DawgNation. But that $32 million – set aside for “general support” of athletics – is not included in the figures presented in the treasurer’s report, handed out last month at the UGA athletic board meeting.

So in total, UGA has more than $77 million available, that is not specifically allocated for other projects or expenditures. But the athletic department wants to save those reserves, especially the $32 million, in case of emergencies.

“It’s like anything else in life,” athletics director Greg McGarity said Thursday. “There could be a curveball in your personal life, and my life, that we did not anticipate. So (that’s) the one thing that we don’t have to worry about. It’s just solid business practice. It’s probably the best way to say it. It’s the unexpected.”

But Georgia football and the SEC continue to bring in massive revenues. The SEC last year paid out $39 million to Georgia.

So what is Georgia worried about needing the money for?

“It’s a good practice to have at least six months of operating expenses in case the unforeseen happens, that we don’t know about,” McGarity said. “That’s the financial strength that our athletic board mandated, long before I arrived. So it’s a philosophy that’s been in place for decades. Thank the lord.”

The Georgia Way.  So is this:

That includes the $32 million that is invested with the University of Georgia Foundation, the school’s fundraising organization. According to the footnote in the UGA athletic association’s financial statement, the $32 million (approximately) “has been established for general support of athletic programs and awards.” McGarity and Stephanie Ransom, an associate athletics director, confirmed that it is separate money from the $67 million in reserve money listed in a booklet provided at the board meeting. (There is $21.6 million of that already allocated for other facility projects this year.)

Asked when that $32 million would be dipped into, McGarity answered “never.”

“That all gets into the rainy day (fund),” he said.

That’s one mother of an umbrella you’ve got there, my man.

McGarity tries to make himself sound like someone who can’t sleep at night wondering how he’ll ever be able to pay his bills.

McGarity pointed to unforeseen expenses that have already occurred: Paying off previous head coach Mark Richt and his staff. That amounted to about $7 million. As for the future, there are still NCAA lawsuits in the system, McGarity pointed out, related to student-athlete pay and concussions. He also pointed to the NCAA in the last couple years allowing schools to pay athletes for cost-of-attendance and for increased meals.

“There are a lot of assumptions that people are making, that this revenue stream is going to be there forever,” McGarity said. “If we end up having to pay student-athletes down the road, where is that money going to come from? … There are a lot of unknowns, and what this allows us to do, and the right way, is to have a buffer there that allows us to cover the unexpected.”

First, let’s laugh right past the “unforeseen” expense of paying off Mark Richt, shall we?  Second, the school has already bitten that particular bullet, as well as the COA and food bills without having to draw down the reserve money.  So why fret about that now?  As far as the paying student-athletes down the road, if that day ever comes, I’m sure adjustments can be made — foregoing a $63 million capital project to give recruits a nice place to hang out quickly comes to mind as an example.

What I’m hearing from this is that the money parked with the Foundation is top priority for the athletics department.  In McGarity’s defense, I doubt that’s a directive originating with him.  Still, it explains so much.  Take this, for one thing.

Who are the richest and poorest SEC basketball programs?

The Southeastern Conference will always be known more for its football than basketball, but a few SEC schools make big money off their basketball programs. Here is where each school ranks on revenue based on its U.S. Department of Education athletics filings. The filings are for the time period through June 2015…

No. 9 Georgia: $9.02 million

Georgia is in the bottom half of the league in revenue, but actually had one of the better profits off basketball at $3.09 million.

Yay, team.  Men’s basketball may struggle to make the NCAA tournament, but it’s doing its part for the reserve fund.  Which part of that equation do you think matters the most to the decision makers?

It’s not the money that bugs me.  It’s the mindset.  It’s why we can’t have nice things from Georgia athletics.

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69 Comments

Filed under Georgia Football, It's Just Bidness

69 responses to “77 million drops of rain

  1. Tas Smith

    While at the same time you trash the money spent on the new locker rooms and facility for recruits.

    You truly don’t get it.

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    • For the umpteenth fucking time, I don’t have a problem with the new capital project.

      I have a problem with an athletics administration that doesn’t GAS about the fan base, other than to make sure we send the Hartman Fund checks in on time.

      I’m not the one here who doesn’t get it, pal.

      Liked by 1 person

      • Tas Smith

        Then when trash it? That project has nearly paid for having raised $53 million of $63 million needed.

        I’m a Hartman fund contributor myself, and I want my contribution to do what it takes to get elite talent at UGA to help us get to the level this program ought to be.

        UGA can have both. No need to trash much needed project to promote something else.

        UGA well afford to do both.

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        • You are continuing to assert that I’ve taken a position I haven’t taken. Show me where I’ve trashed the project.

          “UGA (can) well afford to do both” is exactly what I’ve been saying. Maybe you can explain why that hasn’t happened, instead of making up straw man arguments.

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          • PTC DAWG

            ” As far as the paying student-athletes down the road, if that day ever comes, I’m sure adjustments can be made — foregoing a $63 million capital project to give recruits a nice place to hang out quickly comes to mind as an example.”

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            • That’s your idea of trashing?

              Maybe you haven’t noticed, but they aren’t paying players now. So that’s not a bridge that has to crossed.

              And if that day ever comes, you think recruits are going to care more about a capital project, or the amount they’re being offered to play for UGA? That’s the choice that’ll be made when the day arrives.

              In the meantime, I’m still waiting for somebody to explain why McGarity can’t come up with a way to take care of recruits and the fans on game day.

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              • MLB2

                Don’t be deterred, Bluto. Keep preaching the truth. Too many are blinded by illusion. This is the type of posts that bring me to your site over and over. Great job!

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                • RandallPinkFloyd

                  ^this.

                  Why can’t we have both? It’s clear we have the money for it. Seems like an easy enough decision to take care of the folks padding your pocket.

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              • PTC DAWG

                I guess the stadium seems fine to me, and I have been to every SEC stadium, save UF, Mizzou and TAM. Many of them multiple times.

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    • HVL Dawg

      Tas, I think you are in over your head.

      If you come on here and take on the Senator like that, you probably should leave your message on the screen for awhile before you click post. Think about it awhile, then delete that post you thought was brilliant.

      Like

  2. anon

    They should empty the fund to the point that we have a respectable basketball team(s) and baseball program. Hell add some lacrosse programs too. Cheap asses.

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    • dawgfan

      There is nothing wrong with Stegeman as a basketball venue, especially after the latest improvements. GREAT RESTROOMS! What Georgia’s basketball program needs is better fan support to improve the game atmosphere. Great game last night on senior night and it was only a little over half full.

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      • anon

        Was thinking programs in general: coach, facilities, support staff, ketchup selection at the hot dog stand, etc. should’ve been clearer I guess

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      • Red Cup

        Really? Where is the scoreboard? What about one over center court? Why don’t we have in game stats. The fucking auto sinks don’t work. It’s ridiculous. It is not a bad venue, but can be so much better. Go to new McCamish at Tech. They have NO money and a better hoops facility than us. Get you heads out of your asses

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    • Rugbydawg79

      The Rugby Team needs help ! Alumni are paying for scholarships.

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      • anon

        There ya go. Give them some help. Why can’t we good at rugby. Spend some money.

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        • Sherlock

          Title IX. We have to have athletic scholarships in proportion to the student body. You either have to start adding womens sports or cuts something else. It would be nice to have full rugby, men’s soccer, hockey, and wrestling teams. Government won’t let us.

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  3. Kobby

    They’ve done the calculus and know big money donors and TV money is buttering the bread. One day Sanford stadium is getting rebuilt or majorly overhauled , and when it does you know it will be in the NFL model – smaller with more suites. The north and south upper decks are 50 years old, so that day is closer than one might think. That doesn’t make the tone deaf comments any easier to take but that’s the long game.

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    • doofusdawg

      They aren’t spending a billion dollars on a football stadium. But you are right it’s the tv revenue and the top donors that pay the freight. That and the federal government subsidizing everything else with student loans.

      But adgm does have to throw a bone to the masses in the way of a few $mill for improved restrooms and concessions. That’s the short game.

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  4. Greg McGarity, J. Reid Parker Director of Athletics

    I got 77 million problems but 1960s bathrooms and rec league equivalent concession stands ain’t one.

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  5. General Lee

    You missed the most outrageous part. Do the math on the “6 months of savings” calculation. Damn, McEars is dumber than I thought.

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    • Sherlock

      It is a little more than 9 months reserve. I mentioned in a previous post last week that the previous announced reserve fund was right at 8 months expenses (I assume the 13M increase is added donations for the West Endzone expansion). For a non-profit organization like the AA, 6-12 months reserves is appropriate as they will have a harder time reducing expenses in the event that something bad happens. Y’all can complain that the AA is being cheap, but, in reality, they are managing their expenses / reserves in the absolutely correct manner. They have somewhere around 150M in debt as well.

      Liked by 1 person

      • Non-profit organization. Okay.

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        • Sherlock

          That is some misplaced snark, Senator. The AA is a non-profit organization attached to the University that exists for the sole purpose of furthering the goals of the University. There are no shareholders collecting a dividend.

          Where you see a business that doesn’t give a shit about its customers, I see an organization that has been tasked with a five year plan to drastically improve the football team in an effort to increase out-of-state enrollment.

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          • Cool story, brah.

            If the athletic department has a coherent five-year plan about anything, that would be a novel development.

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            • Sherlock

              I didn’t say anything about them having a coherent plan, as I have no inside information, though I have a little more faith in Morehead than most of you do. I mentioned 5 years only as a timeframe that fits the facts as I understand them. I happen to believe that Morehead’s long term goal for his tenure as President is to oversee our invitation to the AAU. The actions of the AA over the past 2.5 years (along with the medical partnership, the Graduate school, the Engineering College, etc) make sense to me though that filter. I can understand how the actions by the AA can look schizophrenic in isolation. I understand that I could be completely wrong. It is kind of like Trump. Some people see “the man that will single handedly save Western Civilization”. Some people see “literally Hitler”. When you look at Morehead and McGarity, you may see incompetence and indifference. I see guys with priorities that differ from the average fan.

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          • JCDAWG83

            You should let Morehead know about the plan to increase out of state enrollment. I’ve seen him speak twice in the past year and he was very specific on keeping Georgia at around 90% in state enrollment.

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            • Yep – Morehead seems to be a guy who wants to do the right thing for UGA and for the state as a whole. The out of state thing is a major red herring.

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              • Sherlock

                That is part of my thinking. I very firmly believe that Morehead really cares about the University, unlike his predecessor. The amount of money from the legislature is basically fixed. Right now it is around 5K per student. Out of state students pay an extra 18K per year. Each extra 1% out of state enrollment (i.e. 10% v 9%) is 5M in revenue with zero expense. That can fund 30 full time tenured STEM professors. It would basically be the equivalent of 60-80M added to the endowment.

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                • Cojones

                  I like your push for more professors, No-Shit. The fund is more about that than athletics and will make us great enough to merit the pride of the football team.

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                  • Sherlock

                    I catch a lot of flack around here for my differing opinions, but I like to think that it is just because I view the football team and the AA as a component of my Alma Mater and not a stand alone entity. I would love to win a NC, but I would prefer to gain AAU membership and pass tech on the USNWR rankings. Just think of the smug satisfaction we could feel if in the same year as passing them in rankings we hang a 50-burger on their ass on Historic Mark Richt Field at Bobby Dodd Stadium.

                    In order to accomplish that, we need to increase our research expenditures and attract more members of the National Academies of Science and Engineering. The only way to do that is to find funding from outside the legislature.

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                    • Cojones

                      Years ago, when I attended, we did just that with NSF money. UGA, Cornell and Stanford were declared Biological Sciences Centers of Excellence by virtue of the various areas that graduates entered and prospered in after their degrees. At that time, $10M was dropped on each school to the tune of 8 new professorships (2 in my department), creation of an Electron Microscopy Department (with the head arriving from U. Cal. while I was still around) and with upgrades in all the Biological Sciences. Cornell’s expertise in bird science prospered greatly and all to our benefit.

                      Certainly resources like that exist and should be plundered by UGA before this anti-science administration dries up all pools. Above all, a great deal of this athletics money should be moved in that direction.

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            • Sherlock

              Linkage please. I’m not being snarky. I’m very open minded; info like that can change my mind.

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      • Gaskilldawg

        The Red Cross will need to have funds as long as disasters occur. The UGA AA will no longer need funds if intercollegiate Athletics come to an end, other than paying off debt and we have little debt. If UGA gets out of the sports business then yes, income from donations will dry up but it won’t have operating expenses to cover, either. We aren’t a nonprofit like The Red Cross.

        At that point, the reserve fund will easily cover the debt. My question is, who gets the accumulated fund when the UGA AA “retires?”

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        • Cojones

          You may want to use another example than Red Cross. They have a business plan that’s profit based in blood fractionation. I don’t begrudge them the profits and I support them fully because they are always there for disasters, but facts are facts.

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        • Sherlock

          The AA has very substantial debt i.e. on the order of $150M last I saw, but that was a few years ago and I don’t know what their bond schedules look like. I did see that they refinanced $60M back in the fall (they have an Aa3 rating). The AA has a budget over $117M for 2016. That does not count capital projects like the IPF or the West Endzone project. That puts the reserve at 7.8 months of expenses. I understand that many of you feel that is an excessive about. I promise you that it is quite reasonable. McGarity may be a visionless boob and a PR disaster, but he is managing the finances well.

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  6. DoubleDawg1318

    I get the idea of having reserves. That’s a good idea. I heartily dispute the idea we need two reserve funds, each with tens of millions of dollars in it to cover “rainy days.” That’s absurd. Keep 10 or 20 mil if you must but 77 mil is obscenely stupid.

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  7. DoubleDawg1318

    I said in another thread that the UGAAA is a poorly run business not an athletic department and I continue to stand by that statement. This certainly reinforces that belief.

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  8. Ricky McDurden

    What I’m seeing in that “6 months of operating expenses” line is “god forbid we should have to pay our players for the work they do, we don’t want to up and lose our six figure salaries as a result!”

    Next thing you know, Sanford concessions will be handing out slices of cake in lieu of stale hot dogs and popcorn.

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    • Gaskilldawg

      Yep. The NCAA does not require a college to pay an athletic director half a million dollars a year or have a bunch of associate ADs making six figures. Nor does it require colleges to pay head coaches millions a year.

      McGarity can find an extra million by saving on BM salaries.

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  9. stoopnagle

    The money hosted by the UGA Foundation is there to help UGA make more money for the institution. It’s the one thing UGA has going for it money wise. We’re so far behind our peer and aspirationals on the fund raising side it’s laughable. We’re way ahead of nearly all of them in athletics, so I get what they’re doing with that Foundation money.

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    • Sherlock

      This is a quality post, but I fear it will fall on deaf ears. Unfortunately, when you mention our aspirant institutions most people on this board would say Alabama and Florida State instead of North Carolina and Virginia.

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    • We’re so far behind our peer and aspirationals on the fund raising side it’s laughable.

      Maybe somebody should have thought about that before hiring a president who promptly went out and alienated half the donor base.

      And the idea that $32 million is some kind of major leveler when it comes to endowments and funds is laughable. The gap between UGA and peer institutions runs into the billions.

      Sadly, you are right when you say it’s the one thing the school has going for it money wise. The problem is that shouldn’t be the top priority for an athletic director.

      Like

  10. The Georgia Way

    Ixnay on the ushslay undfay.

    They are not supposed to know about this.

    The fact is the state had historically prohibited us from establishing engineering and medical schools, the two top sources for research endowment funds.

    We only recently established these programs but are far behind our peer (non-SEC) institutions in this area. This is why we run athletics on a shoestring compared to the rest of the SEC.

    We are happy to trade losses in the athletic arena in return for closing the gap on funds to the university.

    This is The Georgia Way.

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    • Sherlock

      The fact is the state had historically prohibited us from establishing engineering and medical schools, the two top sources for research endowment funds.

      Sigh. We would have been an AAU member a long time ago had it not been for bullshit politics in the legislature. We still won’t have a proper medical school for another decade. I can’t wait for the stupid partnership with MCG/GHSU/GRU/AU to end. In the mean time, we need to work on attracting some members of the National Academy of Science and National Academy of Engineering.

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      • doofusdawg

        Yep. And the reason that Charlotte is the banking center of the south is because the state legislature was protecting a few good old boys at C&S. Self preservation and an all too powerful governing body make for bad bed fellows. See “drain the swamp”.

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  11. Yep. My county has a surplus, yet still keeps selling bonds and raising taxes so they can improve the neighborhoods on a certain side of town where rich assholes drive fancy sports cars and bitch about bullshit. You are breaking my heart.

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    • RonCrossIsACrook

      Do you live in Columbia County?

      Like

    • JCDAWG83

      At least your county is taking care of the people who actually pay the taxes. My county raises taxes and puts nice streetlights and parks in the ghettos so the thugs have nicer things to vandalize and the bums can idle away their days in nicer settings.

      Like

  12. MLB2

    Yeah, paying off CMR and his staff was a huge surprise since his gator loving, sorry ass wanted to fire him ever since he got here. Worthless, program sabotaging MF! 7 years too late!

    Like

    • Cojones

      You pushed my “Why I dislike our AD” button. In all fairness, he was given his directions almost directly from the Regents’ mouths several years ago, most notably coming from Dr Thomas Lawhorne’s direction, to get rid of CMR. I think he may have gotten into a little trouble in their minds when he didn’t do it fast enough to suit “the good ole.boys”. They are happy in the result that the un-UGA coach from Bowdin Acres is gone, but not happy with getting backed into an untenable position of defense for that action immediately after Richt beat GT. Made them look bad and like old curmudgeons in association with B-M, which they are.

      McGarity is following the orders he was given as part of his taking the job to begin with and I have always thought he acted like a priggish asshole in carrying them out. I almost feel sorry for him to have agreed to such when he came on board instead of being totally in command to place his individual stamp on the future of UGA athletics.
      .

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  13. Dawg Vegas

    As an aside – great Jayhawks song!

    Liked by 1 person

  14. I was writing about all this 5 years ago.

    Glad AJC caught up.

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  15. Greg has our long term interests at heart. When the whole collegiate sports model blows up in ten years, his successor will be have to distribute a one time, special dividend to Hartman Fund contributors.

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  16. Mayor

    Greg McGarity is a reflection on the core values at B-M. $$$$. That’s pretty much it. They have to produce a team with a consistently winning record in football to keep the $$ rolling in. Beyond that (like say, actually winning championships) they don’t give a rat’s ass. Personally, I’m pretty damn sick of it. We either fired the wrong guy or if you think CMR had to go, we didn’t finish the job. We should have gotten rid of McGarity and the entire AB at the same time.

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  17. Pingback: Pity the poor McGarity. | Get The Picture