“Where does it end?”

The latest USA Today report on college athletic departments’ finances, for the 2016-7 fiscal year, has emerged.  Good news for Georgia:  it’s one of seven D-1 schools with revenues exceeding $150 million, something I expect to continue with a bang in the next fiscal cycle. Even better, it ranks nineteenth in expenses, which means it turned close to a $40 million profit even after transferring $4,500,000 back to the school.

Before some of you go there, I have no problem with turning a large profit, as long as the money is spent wisely in the pursuit of excellence.  (Well, other than charging student fees when your profit margin exceeds 25%, that is.)  But it also means that I do think whining about the sanctity of the reserve fund in times like these as a defense to implementing a master plan for athletic facilities is weak beer.

It’s not the worst thing in the world, of course.  This is worse.

A few weeks before the football season last August, a Washington State University vice president sent an urgent message to the athletic director.

The topic was deficit spending in the athletic department, which had ballooned to a cumulative debt to the university of $67 million…

The messages were obtained by USA TODAY Sports as part of a public-records request and are part of an ongoing financial drama that has unfolded in some parts of major college sports – not just at Washington State, but at other schools that might be described as the underclass of the upper class. Besides WSU, these include the University of California and other Power 5 conference institutions that have dug their own holes and struggled to avoid getting buried in them.

They are not broke. They simply overspent their means by tens of millions as they tried to keep up with their richer rivals in coaches’ pay and opulent facilities. And though such pressure to compete is nothing new, their deficit spending and subsidies have accelerated to unprecedented heights since 2011, even as their collective revenues have shot up by nearly 50% since then, largely because of lucrative television and media contracts.

Their problem is a bit of a paradox.

Not really.  But it does much to explain the current state of whoredom that characterizes college sports.

These schools make more money than ever. Since they began emerging from the Great Recession in fiscal year 2011, their combined revenue has rocketed from $5.6 billion to $8.3 billion in 2017, not adjusted for inflation. That’s according to data for the 108 public schools tracked by USA TODAY Sports in the Football Bowl Subdivision (FBS), in partnership with Syracuse University’s S.I. Newhouse School of Public Communications.

Yet instead of being financially relieved by this revenue boom, 18 of them burned through it and still posted annual deficits of more than $1 million in fiscal year 2017, compared to seven at that level in 2011. WSU athletics has run deficits for seven straight years, drawing scrutiny from state legislators.

They don’t know how to spend wisely; they only know that they believe they have to spend, and spend blindly, to be competitive.

And the department deficit problem he inherited is projected to be even worse than those e-mails described last year – $85 million in debt to the university by 2023. That debt was rung up largely because of spending increases in coaching pay and facilities for football – namely $130 million to renovate the football stadium and build a five-story football headquarters.

“He took this place out of the stone ages,” Chun said of Moos and the spending he pushed to modernize Cougar athletics.

Moos said “everybody was fully aware” of the debt WSU was taking on with these investments at the time, including the state legislature and WSU regents. “It’s like somebody woke up in the middle of the night and said ‘I’m shocked. I’m shocked that we have a deficit,’ ” Moos told USA TODAY Sports. If WSU hadn’t invested like this, he said the Cougars “would have been left in the dust.”

Thinking like this is why I chuckled the other day when a commenter defended McGarity by saying he acts just like every other college AD.  Dude, that’s not a compliment.

There’s only one cure for their illness and that’s more cowbell money — from the students…

WSU even hopes to convince students to approve a fee increase to fund athletics, up from the current $25 per student per semester to fund its football stadium renovation.

… the fan base and from, most importantly, television.  Even if and when they get it, though, it won’t stop an arms race that most schools can’t afford.  The trend, if anything, is accelerating away from them.

– What kind of growth do this year’s figures reflect? Not adjusting for inflation, consider the following table showing the number of schools at certain benchmark figures over time:

Total expense    $80 million+  $100 million+  $120 million+  $140 million+

    2017                        51                32                    17                    7

    2012                        25                10                      2                    0

    2007                          5                  1                      0                    0

Total revenue    $80 million+  $100 million+  $120 million+  $140 million+

    2017                        51                31                     23                  15

    2012                        28                13                      5                    3

    2007                          9                  3                      0                    0

– The gap between the top revenue total and the bottom revenue total has opened wider than ever.

In 2017, Texas had the greatest at $214.8 million, Alabama A&M the lowest at $3.3 million.

In 2012, Texas had the greatest at $163.3 million, New Orleans the lowest at $3.1 million.

In 2007, Ohio State had the greatest at $109.4 million, Coppin State the lowest at $2 million.

There’s never enough.  There never will be enough.

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23 Comments

Filed under It's Just Bidness

23 responses to ““Where does it end?”

  1. JasonC

    Funny how it’s put the burden on the students which are likely up to their asses in loans and debt also, instead of…say, giving the AD and President a pay cut, so that the effect matches those to blame.

    Liked by 1 person

    • Junkyardawg41

      I so agree with you. When I was earning my MBA, there was a big push for ethics to be included in every class. Translation- write a paper on ethics. Every time I would write on the irony of a system requiring me to write on business ethics while at the same time doubling the inflation rate on tuition. I feel the same way about charging students an athletics fee. I am sure there is some argument to be made supporting it but I can’t see it.

      Like

      • Russ

        We are now doing the college tours around the country. We started at Texas and Texas A&M. I bit my tongue when they talked about the charge for the student athletic fees, but I did point out how much money each athletic department made last year to my wife. I’m trying to get her to share in my outrage.

        I know it will never happen, but those figures at the top about UGA ($40M athletic profit, $4.5M transferred to school) should be reversed. At every school.

        Liked by 1 person

        • dawgfan

          It damn sure should and it’s shameful that the $4.5 million hasn’t at least gone up in line with revenue.

          Like

  2. I get the fee. It does cover free access to most athletic events and reduced price tickets for football and men’s basketball.

    What I don’t get is why it’s a mandatory fee you pay whether you attend an event or not. It should be optional. If you opt out, you get no access to tickets. When a student scans his/her ID, no admission even if they had a student ticket transferred to them.

    Before anyone mentions access to Ramsey, don’t. That’s covered by the facilities fee.

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    • JCDAWG83

      I agree with making the athletic fee optional. There are quite a few students who never attend an athletic event during their entire time as a student.

      I wouldn’t have any problem with them gaining admission with a ticket that had been transferred to them. Someone paid the fee for that reduced ticket price.

      Like

  3. Hogbody Spradlin

    Jeez, didn’t some of these guys go to college? Oh never mind.

    Like

  4. Biggus Rickus

    Fine, I’ll bite. I wasn’t suggesting that it was a compliment. I just don’t know what you expect. Do you think if they fire McGarity, they’re going to hire some luminary or some other flunky administrator who behaves more or less the same way?

    Like

    • Until I see evidence to the contrary, I expect the Georgia Way to keep on keeping on.

      Liked by 1 person

      • Biggus Rickus

        The thing is “The Georgia Way” seems to be essentially the same as the Florida Way or the Oklahoma Way or the Michigan Way. On some level, we should probably be thankful it isn’t the Baylor Way or the Tennessee Way.

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        • The Georgia Way

          “Understand that there is no tradition more worthy of envy. No institution worthy of such loyalty.

          Rest assured, there is only one Way.

          The Georgia Way.

          #COMMITTOTHEG

          Like

  5. “WSU even hopes to convince students to approve a fee increase to fund athletics, up from the current $25 per student per semester to fund its football stadium renovation.”

    Given the general level of interest in the athletic program referenced in several comments already, I wouldn’t be too confident about getting that approval. Do you think the AD has a Plan B?

    Like

    • Russ

      By “getting students to approve”, he means getting students to pay the (increased) tuition and fees if they want to continue in their degree program. I seriously doubt there will be a referendum, other than a notice of an increase.

      Like

  6. Sounds a lot like congress.

    Like

  7. One item that irritated regents students, and members of the WA state legislature, is that WSU was fudging numbers on attendance at football games. Seems when folks added it up, there was a large discrepancy in $$$$ that should have been coming in. Not how to make friends and influence people.

    Like

  8. The Georgia Way

    Young alumni, if you did not include a $23,900 gift with your ticket request, you can’t get tickets. And no, you can’t get your ticket money back, either.

    Better luck next year.

    #COMMITMORETOTHEG

    Like

    • The Georgia Way

      Season ticket holders, if you did not include an extra $2,500 in this year’s gift, you can not park on campus.

      Rest assured, we reserve the right to set the arbitrary cash requirements after the contribution deadline.

      Better luck next year.

      #COMMITMORETOTHEG

      Like