The EADA Chronicles, a continuing saga

To recap quickly:

• I read the data AirForceDawg assembled at a message board site and reported on it here, along with a few editorial comments.
• I received a pat on the back about it from Jeff Schultz.
• Seth Emerson ($$) linked to it in this piece from Thursday.

Yesterday, Greg McGarity responded with certain details about the economics from Georgia’s perspective at the AJ-C.  His main point is this:

“To read that EADA report one would think we had a $52 million profit,” McGarity said. “But that’s simply not accurate because the numbers provided in the EADA report aren’t inclusive of all of our expenses.

“A more thorough review of our finances reflects a balanced budget.”

He lists three specific items not addressed in the EADA data.

Payment to university ($4.5 million)

“Our payment to the university was $4.5 million,” McGarity said. “It’s money that’s used at the discretion of the university, with a lot of it going to scholarship assistance or to endow academic professorships throughout the university.”

Debt service ($9.9 million)

“That’s the payment on the amount of money we owe, which is currently $105 million,” McGarity said. “

That money is from the bonds purchased for projects prior to 2010, which included the 2009 Butts-Mehre expansion, Stegeman Coliseum renovation, and the Reed Plaza expansion on the north side of Sanford Stadium.

“We have a payment of $9.9 million to service that debt we owe.”

Projects ($38.2 million)

“That’s money spent on paying for current and future projects,” McGarity said, “which includes the West End Zone expansion and renovation, as well as money being spent on golf, soccer and several other ongoing projects.”

That, in turn, raises a whole bunch of questions for me.  First, let’s start with the most obvious one.  Who, or what, is responsible for preparing the data and submitting it to the U.S. Department of Education?  According to its website, it’s the schools that compile and furnish it.

The Equity in Athletics Disclosure Act requires co-educational institutions of postsecondary education that participate in a Title IV, federal student financial assistance program, and have an intercollegiate athletic program, to prepare an annual report to the Department of Education on athletic participation, staffing, and revenues and expenses, by men’s and women’s teams. The Department will use this information in preparing its required report to the Congress on gender equity in intercollegiate athletics.

So, that being the case, is Georgia following a rigid format that all schools must follow, or is it more that each school chooses what information to include in its calculations?  Before answering that, here are the official definitions of expenses and revenues:

Expenses

All expenses attributable to intercollegiate athletic activities. This includes appearance guarantees and options, athletically related student aid, contract services, equipment, fundraising activities, operating expenses, promotional activities, recruiting expenses, salaries and benefits, supplies, travel, and any other expenses attributable to intercollegiate athletic activities.

Revenues

All revenues attributable to intercollegiate athletic activities. This includes revenues from appearance guarantees and options, contributions from alumni and others, institutional royalties, signage and other sponsorships, sport camps, state or other government support, student activity fees, ticket and luxury box sales, and any other revenues attributable to intercollegiate athletic activities.

I don’t know about you, but I find it hard to see how each of those could hardly be more broadly defined.  If the three line items McGarity cites were omitted from Georgia’s reporting, was that at the school’s choosing or by the feds’ bidding?  The reason that question matters is simply because I am skeptical that Georgia was the only school where facility improvements, payment to the university and other things weren’t figured into the expenses total.

If the former turns out to be the case (each school picks and chooses), then the data is essentially meaningless or needs to be significantly fleshed out in the government’s database.  If it’s the latter, and all schools are playing by the same reporting rules, then the basic point of my post stands and Georgia is returning a greater profit on its athletic department’s finances than any other school in the conference.

That’s the first level of questions.  The second level is simply to ask whether McGarity’s methodology in calling for those three items to be included in expenses is appropriate.  I’m going to outsource the answer to that to Andy Schwarz, who responded to the AJ-C piece with a series of tweets that are thought provoking, to say the least.

In case you don't understand what I mean, let's look at what the Georgia AD says is NOT profit, no, no, no, but is actually an expense.

First there is money they send to the University central fund. pic.twitter.com/5tXuBqtaW8

— Andy Schwarz (@andyhre) June 29, 2019

Mom & Pop tell the IRS that the store didn't make any money because they sent $4.5m of profits to the owners… which is Grandma and Grandpa.

Um, no, you made $4.5mm and then you distributed your profits to your shareholders.

— Andy Schwarz (@andyhre) June 29, 2019

As for Retained earnings, these are how profits are accounted for when the first chooses to not distribute those earnings but instead to fund new projects. So, using our corner store analogy…

— Andy Schwarz (@andyhre) June 29, 2019

let's say Mom & Pop made, oh, $38.2 million but used that money to expand into the storefront next door and open a little bistro. Do you think the IRS is not taxing them on that profit just because they used it to grow the business? No, that's (generally) a taxable profit. pic.twitter.com/mXObm77wxT

— Andy Schwarz (@andyhre) June 29, 2019

save for retirement, I had to buy a car, take my wife and me on a vacation, and then of course buy a bunch of obscure board games, I really don't make any money as an economist.

That's pretzel logic. I made money and then I spent it.

— Andy Schwarz (@andyhre) June 29, 2019

What you do with profit is immaterial. It's profit. The fact that a nonprofit finds ways to use all the profits generated by a wholly-owned subsidiary doesn't mean the subsidiary did not profit.

But we're supposed to believe Georgia athletics is broke. Yeah right.

— Andy Schwarz (@andyhre) June 29, 2019

And that’s before you get to things like the reserve fund and the value of the assets purchased with the funds that Georgia pays debt service for.

Now, to be fair, I don’t think McGarity is pleading poverty in the AJ-C.  What he does seem to be insisting, though, is that any suggestion Georgia athletics is a hugely profitable operation is misleading.  Or, as Mike Griffith unquestioningly writes, “Once those numbers are factored in, Georgia’s athletic department budget appears balanced.”  (If you’re looking for a textbook case of lazy journalism, look no further than that.  But I digress.)

What do y’all — particularly those of y’all who review a business’ books for a living — think?  Has the AD made a convincing case that everything’s been accounted for, nice and neat?  Is this nothing more than a matter of semantics?  Or is it valid to question the athletic department’s priorities in how its revenue stream is utilized?

I’ve got a feeling there’s more to come on this.

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$10 here, $10 there and pretty soon you’re talking about real money.

IPTAY, the Clemson athletics fundraising organization, has, according to its CEO, raised an astonishing $360 million through the past six years.

It’s needed to, in order to keep up with the college football Joneses.

Despite the consistent support of IPTAY, Clemson’s pockets are not as deep as its competitive peers. According to figures compiled by USA TODAYSports, during the 2017 fiscal year, Alabama, Ohio State, Georgia, Oklahoma, Auburn, Louisiana State, Tennessee and South Carolina each generated at least $135 million from ticket sales, television and licensing deals, student fees and contributions.

Clemson generated $112.6 million.

The biggest discrepancy between Clemson and its peers is the lucrative linear television networks established by other conferences. In each of the past three years, the SEC, anchored by its SEC Network, distributed at least $40 million to its member schools. The Atlantic Coast Conference never distributed more than $26 million in any of those years.

It’s done better than keep up.

According to the USA TODAYSports compilation, through the 2016 and 2017 academic years, Clemson generated more revenue from contributions than Alabama, South Carolina, Penn State, Wisconsin, Kentucky, Iowa, Washington and Michigan State.

In each of the past four years, IPTAY raised at least $20.5 million in its annual fund, which supplies cash directly to the athletic department, according to a copy of the organization’s annual review. In 2018, it raised $38.2 million in its annual fund, $15.1 million in major gifts, including cash, real estate and securities, $5.1 million in planned gifts and endowments and $6.6 million in premium seating and suites in Memorial Stadium, the basketball arena Littlejohn Coliseum and the baseball park Doug Kingsmore Stadium.

If you’re interested in the quid pro quo, here’s a breakdown of what IPTAY contributors receive.  All in all, it’s a well-oiled machine.

Give the people what they want.

Seth Emerson ($$) posits a reason why Georgia is steadily upgrading the attractiveness of its schedule over the next decade or more:

The actual turnout at Georgia home games in 2018 was very different for games against Power 5 teams than it was in the other games. While every game was officially announced as a sellout, Georgia (like other schools) keeps track of actual attendance by counting tickets scanned at the door. Here is the breakdown for actual attendance last year, in order of highest to lowest turnout:

Auburn: 83,646

Tennessee: 81,227

Vanderbilt: 79,186

Austin Peay: 78,050 (season opener)

Georgia Tech: 76,203

UMass: 67,764

Middle Tennessee: 66,191

* Note that for each game, the total includes 4,128 credentialed people, a figure UGA came up with to include staff members, security, media, concession workers, etc.

This all tracks with Georgia’s actual attendance for 2015-17, which we wrote about previously. Since 2015, Georgia’s attendance for games against Power 5 opponents averages 77,598.4 per game. For non-Power 5 games, it’s 69,328.6 per game. You might say that it’s only about 8,000 per game, but that adds up over time.

Indeed it does.  And remember, as Seth notes, when it comes to college football attendance, Georgia is one of the fortunate ones, with a rate about 20% higher than the average.  But you keep throwing out home schedules as crappy as last season’s was and you risk watching falling attendance bleed into ticket purchasing as your fan base slowly gets out of the habit of coming to Athens to watch a game.

Kirby Smart deserves an enormous amount of credit for recognizing the risk and taking steps to blunt it from growing.  If it were up to McGarity, we’d be looking at schedules much like 2018 as long as Butts-Mehre could get away with it.

Yes, we are wallets.  We also have our limits.  Asking us to shell out more for what is at heart entertainment means at some point more has to be offered to entertain us.  And, no, that doesn’t mean just winning.  If it did, we’d fill the stands for UMass every season.

Now this is how you do fan friendly.

This morning, I’ve got nothing but love for Louisiana-Lafayette.  Check out its new concession prices:

Fan Favorites Concessions Pricing:
–    Hot Dog, $1.00
–    Popcorn, $1.00
–    Fried Potato Chips, $1.00
–    Cheese Quesadilla, $2.00
–    16oz Domestic Can, $2.00
–    20oz Fountain Soda, $2.00
–    20oz Bottled Dasani Water, $2.00
–    Hamburger/Cheeseburger, $3.00
–    Pretzel, $3.00
–    Frito Chili Pie, $3.00
–    ICEE, $3.00
–    Cheese Nachos, $3.00
–    Large Popcorn, $3.00

Premium Concessions Items Pricing 
–    16oz Craft Can, $4.00
–    16oz Craft Draft, $5.00
–    16oz Domestic Draft, $4.00
–    Premium Hot Dog, $4.00
–    Premium Hamburger/Cheeseburger $6.00
–    Smoked Sausage/Hamburger Po’boy, $8.00
–    Boudin Ball (3) w/ Dip, $7.00
–    Shrimp & Grits, $8.00
–    Vegetarian Jambalaya, $6.00
–    Fried Mac & Cheese w/ Dip, $6.00

You can take a family to a football game and not break the bank on concessions.  What a novel concept.  Kudos to the Ragin’ Cajuns.

As an aside (and also as a lead in to the next post), this brings to mind something we discussed here once about how Georgia ought to consider discounting concession prices for cupcake games as a lever for putting asses in the seats for games with less attendance.  You don’t think something like that might motivate more families to come?

Thank you for your support.

Treading in AirForceDawg’s footsteps again, here’s an interesting data trend line for those of you who think Richt’s and Smart’s financial backing from Butts-Mehre have been similar.  It’s a spreadsheet of Georgia football expenses for the last four fiscal years (2014/5-2017/8) as tallied by the Equity in Athletics Data Analysis Cutting Tool.

Football Men’s Team Expenses

26154335

38884925

36387975

44909546

From $26 million to almost $45 million… quite the increase there.  All of which reminds me of something I read at a blog once.

I mention this story not in a fit of jealousy, nor to condemn another program’s wasteful spending. Rather, it’s a perfect example of what the Georgia Way is up against. Regardless of where you think Richt falls on the performance spectrum, you cannot deny that for the bulk of his time in Athens, he was not allowed the resources to duke it out with Georgia’s main rivals.

Forget about the IPF. Georgia was one of the last schools to give out multi-year contracts to assistant coaches. (Ironically, the administration got away with that because of staff loyalty to Richt.) Saban bulks up support staff; Richt is forced to come out of his own pocket to pay bonuses to his assistants. Georgia’s recruiting budget was far short of what other conference schools were allocating until this year.

If you manage an SEC football program, there’s a difference between being committed to winning and being financially committed to winning. Everybody wants to win. The hard part is figuring out how to allocate resources to make sure that happens. And, no, that doesn’t mean spending money like a drunken sailor. (We’re looking at you, Tennessee.) It simply means that if you think your rightful place is among the Alabamas, Floridas and LSUs of the world, you’d better take a hard look at what they’re doing and make sure you’re giving your coaching staff the opportunity to keep up with them.

Is Smart a better head coach than Richt?  Yeah, he is that.  Has he received better support — far better support — to succeed than Richt got?  Numbers don’t lie, peeps.  It’s actually possible to accept both points without feeling like you’ve compromised yourself.  Especially when it works.

What you should be pissed about as a Georgia fan is what might have been accomplished if the athletic administration had been in all along as it’s been for the past two or three years.

Representin’

While I’m not surprised to see this, it’s still a little sad.

The SEC continues to be the most overly represented group of Black Male athletes compared to enrollment of Black Male non-athletes. pic.twitter.com/bWpZg39Oov

— Somebody’s Ugly & Broke Son (@CleatEliteAnfro) June 27, 2019

That’s entertainment.

Maybe SEC schools could use some of that sweet, sweet profit their athletic departments are generating to rectify that, but I’m guessing nah.

Your Daily Gator indulges its inner StingTalk.

During the Richt era, I enjoyed reading the message board threads concocted at StingTalk and other Tech blogs that would torture cherry-picked statistics into doing whatever stupid pet tricks would work to show that the Jackets were bound to beat Georgia that year.

Of course, we don’t call it Mark Richt Field for nothing.  But I digress.

Anyways, check out this item at Alligator Alley for something with a similar flavor.

… I thought it would interesting to take a look at the Gator’s 2019 schedule and see which games are projected to be close and which ones the gators should have the edge and/or not have the edge based on the 247 Composite ratings for each team’s projected starters. This analysis looks at the raw rating and an adjusted rating using the 247 Composite Ratings

The Adjusted Rating is simply the Raw Score factored for what class the player is in (Freshman = 85%, Sophomore = 90%, Junior = 95%, and Senior = 100% of the raw ratings). Granted, there are probably hundreds of ways you could do this and multiple ways of accounting for experience, I understand that…but teams are applied with the same factors so whatever disagreements you might have with the factor, at least it impacts each team equally.

Disclaimer – This is NOT an analysis that predicts the outcome, it is a talent evaluation that forms the starting point to determine where some of the potential match ups advantages and disadvantages might be during the game, and thus impact the game planning for both teams. It is simply a data point for consideration…

Yeah, right, bubba.

*Week 9 – Florida vs Georgia (2-2 DRAW – Coaching Edge to Florida)*

Based on the numbers, this should be an offensive shoot out. Both teams have the edge over the opposing defenses. The question here will be which quarterback can better exploit that…usually I would give that edge to Fromm, but I also think Henderson, Wilson and Dean are far better than anything he will face all year…so it is likely going to come down to how much the Safeties for Florida can do their job!

I’m giving the coaching edge to Florida, I am just not sold in Kirby’s game day management and I think Florida will be motivated to get this in the win column!

I keep thinking I’m gonna run out of material for these Daily Gator posts any day now, but it seems I’m underestimating the Florida fan base.  Thanks, fellas.

Bill Connelly’s first effort at ESPN…

… is not behind a paywall (yay!) and is a look at what the major national title contenders have to do to, you know, contend.

Here’s what he has to say about Georgia.

If … James Coley can make a difference in the red zone. Everything above about Bama’s goal-line issues? Multiply it by a couple of orders of magnitude, and it applies to Kirby Smart’s Dawgs. Georgia was fifth in overall offensive success rate … and 109th inside the 10. Remember that series against Florida, in which UGA had five consecutive snaps from the Gators’ 1 (seven including penalties), gained zero yards, and kicked an 18-yard field goal? The entire season wasn’t that bad, but that certainly distilled the issue. Coley moved from co-coordinator to sole coordinator when Jim Chaney left for Tennessee. He can top his predecessor by showing just a bit more creativity when a touchdown is on the line.

If … Dan Lanning can dial up pressure. In theory, anyone hoping to win the national title will face the prospect of beating both Alabama and Clemson. Georgia theoretically might have to do the former twice. That’s an almost impossible task, but any chance you’ve got of pulling it off requires a pass rush. Georgia ranked just 76th in sack rate last season, and the only Dawg who recorded more than two sacks (Jack linebacker D’Andre Walker) is gone. Recent recruiting has produced plenty of pass-rushing options — among others, sophomore and 2018 reserve Channing Tindall had two sacks among his 9.5 tackles — but someone’s got to step up, and Lanning’s scheme needs to be of assistance.

If … the defensive front is a little less flexible. Thanks to Deandre Baker & Co., Georgia was still awesome against the pass even with the iffy pass rush. The run defense was strangely mediocre, though. Georgia ranked just 67th in rushing marginal efficiency allowed and got beat up by opposing run games in both regular-season losses: LSU’s Clyde Edwards-Helaire rushed for 145 yards on 19 carries (quarterback Joe Burrow added 89 yards in 10 non-sack rushes), and Alabama’s Damien Harris and Josh Jacobs combined for 135 yards on 17. There’s too much raw talent up front for Georgia to lose the battle in the trenches.

“Georgia was fifth in overall offensive success rate … and 109th inside the 10.”  Yeah, that one left a mark, Jim Chaney.  The good news is that, as Bill notes, Coley has a low bar to surmount from there.

I don’t know if I’d call this quibbling, but with regard to his very last point, I think one reason Alabama’s running game was successful in the SECCG was that Smart and Tucker decided they had to sell out stopping Tua and the ‘Bama passing game.  That worked well until Tua wasn’t there to stop any more.

More thoughts on California’s “Fair Pay to Play Act”

There are a couple of good passages from this post at The Athletic ($$) about the showdown between the NCAA and the California legislature over the latter’s “Fair Pay to Play Act” worth sharing here, not from an advocacy standpoint, but as an informational reference in response to questions I’ve seen in the comments section regularly.

The first is regarding where student-athletes who aren’t the star quarterback or point guard could possibly look to find a way to monetize themselves.  It’s easy to forget the kind of world we live in today, but there are more options for that than perhaps we realize.

… In response to a frequently heard criticism of the bill that it would only enrich a few big-name football and basketball stars, Skinner notes that local businesses, not just national name brands, would be interested in running commercials and giving other NIL-earning opportunities to multiple athletes on college teams. Skinner cited the example of a star female wrestler from a small California town who will never make money as a professional athlete, but under SB 206 would be entitled to receive NIL money from a proud local sponsor.

It’s not just athletes in the traditional “money” sports who would benefit. Skinner points to UCLA superstar gymnast Katelyn Ohashi, whose perfect floor exercise has been viewed by almost 44 million viewers on YouTube. Why, Skinner asks, shouldn’t she be allowed to monetize her athletic success in the way that other YouTube personalities, with far fewer views, have found ways to do?

Why, indeed.

As for the concern about abuse of the rules by boosters, University of San Diego School of Law adjunct law professor Len Simon, who had a role in crafting the bill, maintains that the NCAA would not be precluded from regulation of that problem.

Asked about the possibility that alumni groups or wealthy university supporters could form sham sponsorships, and thereby unleash a bidding war for athletes far beyond what legitimate business sponsors truly intent on gaining athlete endorsers would be willing to pay, Simon told The Athletic that the NCAA still would be within its rights to police such activity, by requiring that NIL agreements with athletes satisfy a legitimate commercial test. Further, the NCAA could insist that NIL payments not be used to steer an athlete to a particular school – a limitation which the NCAA also would have to enforce.

That might not be as hard as you think.  For one thing, players would have different incentives under the new regime that would undercut such behavior.

Simon adds that one virtue of an unrestricted, but legitimate NIL market is that it could “dry up” the under-the-table payments from certain companies to athletes that have been at the heart of the recent college basketball scandal. He asks: “If nationally recruited high school basketball players knew that legitimate payments were around the corner, why would they risk their college eligibility by taking secret payments?”

That’s similar to arguing that additional revenue flowing to student-athletes might also serve to keep more of them in school longer, rather than leaving early trying to take a questionable jump to the NFL and NBA.  I’m not sure how that’s a bad thing for college athletics.

Food for thought, anyway.

Steele on Georgia, 2019 edition

Okay, time to dig into my initial impressions on Phil Steele’s take on this year’s model of Georgia football.  I hinted at some of it yesterday — overall, it’s quite positive (third in his power ratings; fourth in his rankings once scheduling is factored in), but a little lackluster in comparison to Alabama and Clemson.

To illustrate, here’s how the three shape up in his unit position rankings:

QUARTERBACKS

• Clemson 1st
• Alabama 2nd
• Georgia 9th

RUNNING BACKS

• Georgia 2nd
• Clemson 3rd
• Alabama 4th

RECEIVERS

• Alabama 1st
• Clemson 2nd
• Georgia 25th (and that’s counting Holloman)

OFFENSIVE LINE

• Georgia 2nd
• Clemson 3rd
• Alabama 6th

DEFENSIVE LINE

• Alabama 3rd
• Clemson 5th
• Georgia 17th

LINEBACKERS

• Alabama 1st
• Georgia 6th
• Clemson 14th

DEFENSIVE BACKS

• Alabama 3rd
• Clemson 7th
• Georgia 16th

SPECIAL TEAMS

• Alabama 18th
• Georgia 20th
• Clemson outside top 57

In areas where Georgia is best, the other two are generally close behind.  But there are significant gaps at several positions where the Dawgs lag behind the other two.

All of this, it should be said, is extremely relative.  Georgia is ranked in his top twenty-five at every unit position, which is nothing to sneer at.  In fact, it reinforces a point I made a while back when I was debating Allen Kenney and Ian Boyd about Lincoln Riley’s comment about Georgia, namely that Kirby’s built his team to excel by making sure that there are no true weak links.

This is nicely illustrated with Steele’s SEC unit comparison chart.

The Dawgs may not be the best in the conference at everything, but they’re no worse than above-average in any category.  There is no other team on that chart, including Alabama, that can make the same claim.  (Don’t miss his coach rankings for Georgia and Florida, by the way.  But I digress.)

Coming from someone who watched Mark Richt fail to manage to field consistent units from year to year, that’s not damning with faint praise, either.  In fact, it’s hard to do.  Even Alabama during its current run has had seasons fall short because of poor special teams play.

The problem is that in the context of the 2019 season, Georgia’s high level of consistency may not be enough.  For one thing, it appears that Saban’s team can make the same claim, except at an even higher level.

None of this is etched in stone, of course.  But I don’t think it’s unfair to state at this point in the preseason that Georgia has some work to do in order to catch Alabama and Clemson by the time the postseason rolls around.