I came across this article in the Baton Rouge paper yesterday and was going to post something about it today, when I noticed that Seth Emerson beat me to the punch. The article is written from the perspective of income and expenses of the SEC baseball programs, but tucked in its midst is this chart.
You read that correctly. Georgia finished with the third-smallest profit in the conference, sans private school Vanderbilt. That’s more than a 50% drop from the previous fiscal year. Revenue increased approximately $8.5 million year over year, while the increase in expense, around $19.5 million, far outpaced that.
One would surmise that most of that jump in expense can be attributed to new spending on the football program — those new support staffers don’t pay themselves, homes — but it’s also worth remembering that the proposed budgets for this fiscal year and the next slow that rate of increase to roughly $7.5 million for the current school year and $4.5 million for the 2017-18 school year.
On the spending side, what that suggests is three things: one, Butts-Mehre has taken the criticism of underfunding the football program for years to heart (day late, dollar short for Richt, of course); two, such financial support appears now to be at a satisfactory level, given the slowing of the rate of growth; and three, such relative plateauing indicates some significant ROI is expected, and fairly soon.
What we don’t know, of course, is how wisely the money has been spent, or who bore responsibility for prioritizing the spending (which might be different ways of saying the same thing), although I approach that with the attitude that the more Kirby’s thumb was on the scale, the better.
I don’t need to spell out what that suggests on the revenue side, do I?
Get The Picture 
Meet Kirby Smart, Chief Financial Officer. Greg is just his administrative assistant.
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Maybe a silly question, but: Aside from TV contracts, donors, ticket sales and sponsorships, where does additional revenue come from? Which may answer my other question- How is there a $70MM gap between us and A&M??
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And why, given the population and economic resources of the state, is Georgia behind Arkansas, Kentucky, and Tennessee in revenue? Shouldn’t our athletic department be better at “making the sale”?
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Oil money
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There’s something fishy about these numbers. There’s no way Texas A&M brings in $70m more than us.
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found this.
https://www.usatoday.com/story/sports/college/2016/01/30/texas-a-m-joins-college-sports-financial-elite/79567194/
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PTC beat me to it regarding Texas A&M. Also, I believe there were some one time contract buyouts for Richt, Schotty and Pruitt that likely added a few million dollars in one time expenses to UGA for the period in review. This impacted our bottom-line, but B-M better watch out or else they may find the cost of being average is far more expensive than the cost of being a superior athletic program.
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Oil money is a real thing out here.
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Thanks for the link. So, this includes the donations made for stadium construction. I wonder what ours includes and what the year over year numbers are- Based on the article, I’m thinking there is not that big of a gap every year.
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I have said it before, and I will say it again….there is Big Money, then there is TEXAS MONEY!
I have been to baseball and football games in Aggieland and the support can only be compared to one other school, and that is LSU. Fans out here are just as hungry for victory as they are in Athens, but throw a LOT MORE money at their alma mater…
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You damn right son!
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A lot of good it does them.
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Amazing how much profit a non-profit generates……..
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At the risk of becoming repetitive (hopefully I’m not breaking any blog rules for making the same point again), P5 D1 football players are not student-athletes (with exceptions, of course). The “student” part of the equation is perfunctory at best. The vast majority would never be admitted to the school where they play football except for football. So either call a spade a spade and make it D-league NFL or make all the “student-athletes” gain admission on the same academic basis as every other student. Then it would be actual students pitted against actual students from other schools.
The Senator keeps advocating for paying them, and I appreciate his viewpoint on that for my reasons as stated above – because I don’t believe them to be students. I’m still not clear on his program for paying them. But it’s hard to be a little bit pregnant.
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Richt’s $4 mil buyout?
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Money for nothing and the extra year’s salary for free!
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I will go to my grave believing that Richt’s move to Miami was prearranged and CMR dinked McCheap into firing him so he could get the $4 Mil buyout. Who actually knows what was said behind closed doors between the two. To me Mark Richt was/is a shitload smarter than Greg McGarity.
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As Seth points out “this of course doesn’t account for reserve funds and debts for each school.” We have nearly 80 million in the reserve fund. So there’s that.
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When I see these numbers it makes me wonder why Morehead, the athletic board members, and the folks in the athletic department are patting themselves on the back about what sound financial shape they are in. They are losing the race badly in 9th place and close to being in 10th.
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[disclosure: not a finance guru]. Am I wrong to suggest (or worry) that perhaps we fiddle-farted away the era of obscene revenue / obscene infrastructure building by being (as we’ve long established) woefully behind the curve on trends in the industry. In other words, we used to always be in the Top 2 or 3, particularly before A&M came into the fold. Now with the cord cutting and projected flat lining of revenue did we let the era of “takes money to make money” pass us by where we are now in lockstep with places like Arkansas when our Big 6 peers have left us in the dust.
We didn’t strike while the iron was hot and now the iron is cooling off….that’s my reading.
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Yes. But we saved 3/4 of a percent on our bond payments bacause of our great credit.
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I would be interested in seeing the revenue figures broken down into sub-categories such as ticket sales, donations, TV, etc. Then breaking down expenses by sport would be insightful. I believe the USA Today posted this information a year or two ago, but I remember not that long ago when UGA was consistently in the top 3 for revenue in the SEC behind only Alabama and Florida. The addition of Texas A&M is obviously a game changer, but it’s hard for me to comprehend us falling behind schools like Kentucky, Auburn, Arkansas, Tenn, etc. Even the chickens are have almost caught up to us in revenue.
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I’ve mentioned it before. It isn’t exactly insightful, but i think those charts represent the point well.
When Richt arrived in the SEC, there were the 4-ish major players and everyone else was an afterthought. With the advent of the major TV contracts, every program was awash with more money than they knew what to do with. As a result, they all had money to invest in all the things that they had long envied of their more monied betters like Bama, Florida, UT, etc.
UGA made precious few of those same investments over this period, which resulted in all of the lessor programs catching up to UGA. This isn’t to say Richt needed to stay or go, but he was given precious little of the support that even Miss. St and Kentucky could now afford, making his job that much harder. It leveled the playing field.
I’ll always wonder what Richt could have done if UGA had been out in front of these trends versus looking up at South Carolina as more invested in success than us.
I hope Kirby is able to use the built in recruiting advantages at UGA and new support and takes us where we want to be.
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