“Money isn’t the asset most think it is in Athens.”

I guess this Dean Legge post about dwindling profits at the University of Georgia is supposed to arouse my anxiety about the athletic department’s management skills.  Speaking as someone who has no problem expressing that anxiety when it’s justified, I have no problem saying there’s no outrage here.

The main reason for that is if you’re someone who has any familiarity with Georgia’s recent financial history, there’s really no news in what Legge writes.  Georgia’s outsized “profitability” of a few years ago was largely fueled by lower than conference norm expenses.  Now that Kirby Smart is forcing Butts-Mehre to play catch up with things like facilities and recruiting budgets, it shouldn’t be much of a surprise that the profit margin is being squeezed.

The real question here is why anyone outside of Greg McGarity should give a shit about Georgia’s athletic profits in the first place.  What we as fans should care about is simply whether those funds are being spent sensibly to achieve excellence.  When the reserve fund wins a single football game, let me know, and I’ll look upon it differently.

Ah, you say, but Legge points out that Georgia lags in raising money behind its SEC peer institutions.

Twelve years ago not only was UGA the leader in the SEC with donations of $28,305,817. It was taking in about $10.8 million more in contributions than Texas A&M, about $1.5 million more in contributions than the Gators, about $5.5 million more than Auburn, about $13.5 million more than Tennessee and about $17.2 more than LSU.

In the last 12 years, those institutions have zipped past UGA in raising money for athletics according to USA Today’s reporting on all 230 NCAA public athletic departments in Division I…

… Every SEC member institution has increased its donations by anything from a heathy to an incredible amount… but UGA seems to have settled with a modest 18 percent difference when comparing 2005 contributions to 2016. One should also consider the rate of inflation over that time as $1 in 2005 would equal about $1.25 today.

All of that information indicates that UGA either doesn’t care or doesn’t want to raise more money; can’t come up with the projects to raise the money for; hasn’t yet or won’t identify new donors; doesn’t see the need to raise money (lack of vision); or has become comfortable asking donors to remain at their current level of giving only… or, perhaps UGA just isn’t very good at raising money.

Or perhaps Georgia never should have hired Michael Adams.  When you bring on a president who promptly proceeds to alienate a third of the donor base, there are repercussions to the bottom line.  And that’s the thing about alienated people — it’s hard to talk ’em back.

Finally, Legge is shocked, shocked to find that the state legislature’s financial support of the school is dwindling.

But UGA, and every other public higher education institution, has had lower and lower money coming from state capitals as time goes on. For the current fiscal year, FY 2018, the State of Georgia appropriated $473.3 million to UGA. The University of Georgia’s budget for FY 2018 is $1.6 billon. So the State gave UGA only 29% of the funds necessary to function. The other 71% had to come from somewhere else. In years gone by UGA was funded primarily from the State. That’s not the case any more, and it won’t change in the future.

That’s an amazing shock to the system. Public schools have had to learn how to become much more “private” in many ways. The most important lesson learned over the past two decades is that the State isn’t going to pay for UGA… UGA must figure out how to pay for itself. And after two-plus centuries of being able to be flexible thanks to the state legislature, that’s no longer the case.

Guess what?  That’s the story across the South, and indeed across much of the country.  Public support for secondary education steadily shrinks.  It’s hardly a Georgia Way thing.

Legge is right that the athletic department is expected to make up some of the difference.  That, too, isn’t much of a surprise, especially to Jere Morehead, who received that kind of news when the Regents offered him the job.

Which brings us to Legge’s conclusion.

…  Once a power broker at the intersection of money and college sports, UGA’s athletic revenues are now 9th-best in a 14-team league.

Perhaps it is an oversimplification to ask if Georgia wants to be 9th best in the SEC in money – because money < championships. But the truth is that’s the wrong way to look at it. Georgia should be exhausting itself trying to best figure out how it can maximize the monetary potential of its fanbase.

Doing that will increase the chances of championships in the future. Money leads to and follows championships.

Except for all the times when Georgia’s profit margin was bigger, that is.

“Georgia should be exhausting itself trying to best figure out how it can maximize the monetary potential of its fanbase.”  If you’re the Georgia Way, that’s winning.  If you’re a wallet, well, that’s hardly a surprise.


Filed under Georgia Football, It's Just Bidness

45 responses to ““Money isn’t the asset most think it is in Athens.”

  1. georgiajeepn

    Yea interesting and all but who is going to be running for president in 2020?

    I keed…I keed.


  2. Dylan Dreyer's Booty

    I have a question regarding this statement if anyone knows the answer:

    So the State gave UGA only 29% of the funds necessary to function. The other 71% had to come from somewhere else.

    It’s clear that the direct funding from the state is dwindling, but when my kids went through school, they went largely on the Hope scholarship. That is not direct funding from the state but it is funding created by statute and is a creature of the state. I know it is less now than it used to be but it is still substantial. Just wonder if that is counted in that figure.


    • Normaltown Mike

      The HOPE is not part of that 29% as it follows the eligible students and comes from Ga Lottery company but is not doled out by the General Assembly.

      The remaining $$ required to operate comes from tuition (so HOPE is a lot of that), private support (charitable donations to the Foundation), grants (gov’t, corp. foundation) and sponsored research (corp. or Gov’t).

      One reason Alabama is so eager to get Atlanta kids to go there is the tuition. Even if they give the kid 1/2 off, they still get good money from those kids.


    • paul

      Technically, no. In the beginning HOPE funds were additional funds and one of the things our politicians promised us in order to get the lottery bill passed was that state funding for education would not decrease. In other words, they promised not to say “well,we can offset a decrease in education funding with an increase in HOPE funds.” And then they turned around and did just that. But they did some other things too. Such as increase the scope of HOPE eligibility so that far more students can qualify. High schools exacerbated the situation with out of control grade inflation. No one wants to deny anyone the chance to go to college. So, while they don’t count lottery funds as state funding for education, HOPE is certainly one of the big reasons state funding has decreased so dramatically. Of course, the reason we’re talking about casino gambling now is the need to shore up HOPE financing. By way of contrast, when I went to UGA the state picked up a little better than half the cost.


  3. 81Dog

    “Georgia should be exhausting itself trying to best figure out how it can maximize the monetary potential of its fanbase.”

    let me get this straight: that isn’t what UGA has been doing since Czar Mike took over in Athens? And, that’s the problem, that UGA hasn’t squeezed sheep like me hard enough?

    let that sink in for a minute. Because from where I’m sitting, that doesn’t seem to be the problem at all. Maybe that’s the problem. I’m not sufficiently lemming-like in my enthusiasm to throw every possible dime at my alma mater when it treats me like an ATM and expects me not just to comply, but to be thrilled for the opportunity to beggar myself so jackasses like Mike Adams can live like colonial pashas while I’m standing in a 35 minute line to shoehorn into a bathroom built for crowds of 30,000 or at a concession stand with overpriced, inedible offerings AND they treat me like a potential terrorist who cant be trusted with the screw on cap for my $4 bottle of Coke.


    • Dawg1

      The water bottle cap seizures and searches have simply turned me off as well. Treat me like a potential problem enough and I start to get pretty salty about it. And now, my ladies are kind of unhappy about the new clear bag deal. Ladies keep things in their purses that are not conducive to clear bags as normal humans would know. By all means, let’s make then display their tampons and pads, medicines and assorted items.

      Genius I tells ya.


      • Got Cowdog

        I’ll be spectating from “Got Cowdog”s Below Decks Bar and Grill”, Where the beer is cold, the bar is stocked, the food is smoked, meaty, and plenty of it. Shirt and shoes are optional, but may be required due to popular demand.


  4. AusDawg85

    I invite anyone to list McGarity’s accomplishments since becoming AD. Note that you can’t list increased TV revenue nor the IPF as one was beyond his control and the other was shamefully forced upon him.


  5. 79DawgatWork

    Exhaust this [insert middle finger emoji]….
    There’s so much that’s wrong with this article, and it is so ham-handed, it almost sounds as if someone in the Athletic Department planted it and served it up on a silver platter. I only saw a single reference to the Open Records Act/FOIA, which was in regards to the numbers in the coaches’ contracts.
    And finally, this Ricky-Bobbyism, of “if you’re not first, your last,” in absolute terms, is insanity. As the Senator alludes to, being “first” in total conference revenue, and a quarter, will get you a shitty cup of coffee and some good feelzzzz, but not much else. While it is certainly more likely that more money will translate into better performance, we all know people who do less with more and others who do more with less – there are no guarantees!


  6. Rick

    Am I missing something in Legge’s article? He lists what amounts several schools increased donations from 2005 to 2015/2016 etc. but never lists the amount of UGA donations for 2016.


  7. Normaltown Mike

    I think if we had some real success over the past 10 years then donations would be up. Alabama charges 1 million to a donor for the privilege to lease a sky suite. We don’t have near enough enthusiasm to command a price like that.

    Another great structural problem Athletics has is that giving a ton of $$ won’t significantly improve your seats. I’m not being critical of our system, just saying it’s pretty stagnant with movement.


    • Napoleon BonerFart

      That was one of the big reasons I gave up my seats this year. The first year I had seats, they were in the corner of the endzone. The next year, I moved over near the isle. The next year, I moved across the isle. That was the last time I moved. For the next 20 years, I called in to ask how to improve my seats. The suggestions varied and I tried them all. But I never moved.

      So screw it. I have no interest in watching App State and Samford from section 135.


    • Will (the other one)

      That’s a good point too. I’d say post-2005 was peak optimism for the CMR years;
      Disappointing Sugar Bowl aside, the team was coming off its 2nd SEC title in 5 years, and had the nation’s #1 HS QB in for the spring.


  8. Does that idiot Dean Legge pay for anything related to his experience with Georgia athletics? If McGarity could charge a PSL on top of the contribution, don’t you think he would do it in a heartbeat?


  9. Irwin R. Fletcher

    So there is this new concept called supply and demand, Dean should look into that. It has nothing to do with UGA’s motivation…it’s just that smart people don’t set money on fire.

    Let’s see…2002-03 was the last time we had a legitimate top 25 basketball team and/or made it out of the first round of the tourney, last SEC title in football was 2005, Gymdogs run ended in 2007, and last CWS appearance was in 2008. Smart people with lots of money to donate understand that there is little to no ROI with Lady Elaine Fairchild running the department. Why would they keep spending money with nothing to show for it?


    • jtpo3

      i think he does understand supply and demand… i constantly get offers to join scout at deeply discounted rates.

      maybe not so much demand for this type of content right now.


      • Irwin R. Fletcher

        i think he does understand supply and demand… i constantly get offers to join scout at deeply discounted rates.

        Ok…this made me laugh. Well played.


  10. Squatchdawg

    When the money runs out for Medicaid, pensions and healthcare for retired workers, infrastructure, etc…..and people quit borrowing money to get degrees that are a dime a dozen out in the real world……these state universities are in for a rude awakening. There won’t be a lot of sympathy for the poor university that charges a fortune for everything while also sucking up tax dollars.

    When that bubble goes it’s going to be a big one.


  11. JCDAWG83

    McGarity and the Athletic Assoc would be stunned to find out how much money a sports program that is more than mediocre would bring in. If the AA tried to raise donation levels or ticket prices to any sport at the University of Georgia right now, they would be laughed at in the face and would most likely see actual revenue drop as the fans gave them the middle finger and walked away.

    People will only pay for “potential” for so long. The memory of 1980 has about faded away for the majority of fans.


  12. 69Dawg

    The Universities are facing a crisis. Mike Rowe of Dirty Jobs show has been telling everybody that would listen that there needs to be a return to the trades. People in my generation sent their kids to college because we went and loved it. Now some of us actually took courses that would get you a job in the real world but more and more the degrees are pretty much worthless. A good welder can make $60,000 a year without the debt that these kids are accumulating in college. So the four years (usually 5 or 6 years) the kids in college the welder has made $300,000 and the kid has $250,000 in debt. It’s just crazy. Both my kids went to college, my daughter was a Fine Arts major and has spent the last 18 years working as a bartender to make a living. Not much call for Fine Arts. Bar tending school costs about $600.00, I could have saved a crap load of money if I had just said go get a job but I wanted my kids to get the education, that I had enjoyed.

    Anyway the Baby Boomers are spending their life savings on themselves so the schools had better figure out some new ways to get money. UGA has begged most of us to remember them in our will. I plan on my check to the funeral home bouncing if I have planned correctly.


    • Tim in Sav

      I hate to tell you this but a GOOD welder can make a LOT more than $60k a year


      • Got Cowdog

        That’s a fact Tim. So can plumbers, electricians, HVAC mechanics,and most other trade contractors now that the industry is moving away from hourly wages to pay for production compensation. But you have to be good, and motivated. Not to mention it can be hot, hard, often dangerous work. It is important to me that my kids have a degree so they have the choice, but trade work can be very rewarding for those with the fortitude and the financial skills to make it work.


  13. hooper

    You do less with more, you’ll soon find yourself trying to do more with less. We seem to have dropped the ball when we had the chance. Makes me wonder when someone that matters is going to wake up to what has happened.


    • Bulldog Joe

      It appears they woke up to football, likely because Kirby and Sexton had McGarity by the shorthairs.

      But aside from putting more lipstick on the Stegeman pig, the rest of the Georgia athletic programs continue to operate on a fraction of the budgets of their competition.


  14. dubyadee

    I agree the article is overdone, but, as someone who believes that the current collegiate athletics model is not sustainable and will collapse of its own weight in the next economic downturn, I tend to view the reserve fund as a very good thing.

    Right now, every one wants to out-revenue their profligacy. When the music stops, I predict that many athletic departments are going to have to draw from school funds to stay afloat. Even in the uber-rich SEC, schools like MSU, Tennessee and Auburn are going to be in trouble when TV contracts start shrinking.

    Since I care deeply about the university as an academic institution, not just an entertainment product, I like the idea that UGAA has a better cushion than most.


  15. Will Trane

    Ninth best in a fourteen member conference with regard to revenue. Five members [Florida, Texas A&M, Tennessee, Auburn, and LSU] have moved past UGA. I guess the AD needs a mercantile leader.
    Georgia’s finances parallel the Obama administration the last 8 years. Amazing!!! Let’s see, facts are facts. But since the change in November 2016 where has the DOW gone along with your 401(k) and investment portfolio. Remember telling my sister the night of the election to watch the DOW go past 21,000. Well, it is what is.
    Here is my real point after the poke.
    What did those 5 members do? What did those other 8 do? Sorry, I did not catch what Legge said about that. Is he a Wharton grad {Trump] or a Terry grad. What about McGarity? What kind of real business experience did he get at UF. Apparently not much.
    Big difference in revenues, donations, and net profits. A drop in revenue is related to performance. It has not been there.
    Frankly, I cut off my contributions a few years ago. Why? ROI! Would you invest in a stock, equity, or any business venture if you did not look at your expected and achieved rate of return. Hell no! They don’t teach that the Terry or Wharton. I started putting those funds in a high school program and another unnamed university. Loyalty is good,
    The University is another story. Tuition. State funds. Have you taken a look at the construction on any campus lately? Or salaries?
    Most think the ag industry is highly subsidized. Nothing compared to the education industry and the health care industry. All you have to do is check the amount of outstanding student loans and those refundable and nonrefundable education credits on tax returns. Ask recent grads. Hard to find jobs to liquidate, buy a car, or a home. Then tack in your health care cost that is now subsidized by the ACA.
    Just maybe the AD, athletic board, trustees, and UGA president should get up about 4-5 every morn and tweet for awhile.
    Just start thinking about a few plans or adopting some from those other universities. But stop sitting there in the stands with your hands under your butts.


  16. Bulldog Joe

    The Adams era left Georgia in the bottom four in the SEC in athletic expenses (with newcomer Missouri and the Mississippi schools).

    While the rest of the conference schools reinvested the increased conference and media revenues back into their athletic programs, Georgia redirected these revenues elsewhere.

    Finally, when it became clear Georgia had been lapped financially as well as competitively by the rest of the conference, the university began spending enough money on football to move ‘up’ into the bottom five (with Arkansas).

    But that train long ago left the station and Georgia is left standing on the platform. And deservedly so.