You know, when I posted something about what the latest USA Today athletics fiscal report disclosed about Georgia’s healthy net, I was tempted to conclude with a snarky comment about how that would probably mean Georgia’s athletic director would run to DawgNation’s Mike Griffith to get his take on the numbers out there.
Welp, lather, rinse, repeat for the win.
Georgia ranked sixth in the nation in total revenue ($176,699,893) while reflecting $133,941,585 in “total expenses.”
However, quick math — and some misleading terminology — could lead to a misperception UGA stowed away more than $40 million in surplus.
Bulldogs athletic director Greg McGarity explained how the category the USA Today refers to as “total expenses” does not include money paid out for construction on the Sanford Stadium West End Zone project along with other sports facilities upgrades.
McGarity revealed that $67 million of the more than $176 million in revenue came from contributions while sharing insight into other numbers.
“This report illustrates that we are doing a good job fundraising, which allows us to pay for the facilities we are building,” McGarity told DawgNation.
“As for what we’re doing with the net number that’s reflected, which is about $44 million, approximately 95 percent is going to pay the contractors and architects — the money is reinvested into our facilities for projects that are in motion.”
McGarity said the USA Today chart also does not include the $4.5 million donation the athletic department gave back to the University of Georgia.
That is akin to saying if you made $100000 last year, spent $5000 on a vacation and another $45000 on a car, you really only made half of what you earned. Maybe I should try that argument on the IRS next year.
Meanwhile, this hasn’t changed.
Georgia finished 21st in the Directors’ Cup standings, which ranks schools by how they did in every NCAA sport, from big to small. Last year Georgia finished eighth in the same standings. The previous year it was 13th. The last time Georgia finished this low in the rankings was 1997.
I guess Griffith was too busy taking dictation to ask about that.
Get The Picture 
Griffith has to be the absolute worst beat writer ever employed to cover Georgia football. He gets some air time on 960 in the mornings and it’s just dreadful. Beyond his grating accent, his opinions are tone-deaf and “click-baity.” He has a long way to go to be like Seth or Hale.
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I have met him. He does not strike me as very smart.
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Brandon Adams may not qualify as a “beat writer” but for me he is the absolute worst.
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Yeah he’s got a decent radio voice but his schtick gets old fast. The moment Jeff Sentell leaves will be the day dawgnation will officially have nothing worthwhile to contribute to the coverage of Georgia athletics.
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Amen. Sentell is the only thing keeping that place going although I don’t mind listening to Adams podcast sometimes.
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I’m old enough to remember the days when UGA excelled in the director’s cup with mediocre football and basketball teams.
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And everybody bitched about how UGA brags about winning NC in sports that nobody cares about.
Now that Kirby is winning and we are spending loads of money, It’s refreshing to see that the whiners have updated the list of grievances.
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“approximately 95 percent is going to pay the contractors and architects”
Rest assured, if OSHA could allow us to use volunteer labor, we would.
#YETANOTHERBULLDOGPOINTOFPRIDE
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Senator, as a finance guy your analogy is pretty much spot on. Also the transfer to the university as an “expense” is so absurd I’m insulted that mcgarity thinks we’re really that stupid. That’s akin to me saying I made no income last year because I transferred it all to my wife and my joint checking account.
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How do you know when Greg McGarity is lying?
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When he’s asleep? No…pretty sure he hangs upside down from the ceiling.
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Neither Griffith nor McGarity mentioned the $66.7 million they have in unallocated reserves. Marc Weiszer included that in his recent Magill Society article.
They have all this money flowing in and are hoarding an enormous pile of cash but they can’t be bothered to spend more on stuff that would benefit their average customer. And whenever a media member works up the nerve to ask them about it, they get uptight, defensive, and start flinging bullshit excuses left and right. Then they wonder why public perception is that they don’t give a rip about the average fan.
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That ‘reserve’ is an IOU from the university that will never be paid.
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Greg either lied Tim the article or he ied on the financial statements. As long as he keeps the money flowing Craven Morehead will keep renewing his contract.
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I don’t understand. If all are reporting based on the same metrics, why is he defending the metrics? It’s not like UGA is the only program spending huge amounts of cash… or is he trying to say that UGA spends significantly more cash on it’s investments, as opposed to other programs which use leverage to make their investments?
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In his defense, he didn’t start playing catchup until Pruitt shamed him and Kirby basically confirmed that the shame was warranted. I feel like we’ve done 15yrs worth of capex in about 4.
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We have some accountants/finance guys post on here from time to time, but none of them have stepped up to the plate yet, so I guess i will…
Accounting and tax rules generally do not allow businesses, non-profits or governmental entities to “expense” capital expenditures in a single year. They are required to be capitalized and depreciated over time.
However, in the “real” world, the cost of contractors, architects, etc. have to be paid for as they are incurred, in cash.
Looking at an income statement – which these reports are – in isolation and without reference to balance sheets and cash flow statements, can give you a really distorted picture of an entity’s financial performance. Many of the financial scandals of the past 20 years or so are the result of fraudsters putting out good income statements, and investors not looking at cash flow statements or balance sheets more carefully and raising questions about how they didn’t add up.
I hate to defend McG, and he does a crappy job of explaining it, but looking at a single part of the financial statements for a single year, in isolation, can give you a very warped sense of an entity’s actual financial performance….
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You make good points. There is no way to look at the income statement in isolation from the balance sheet and have it make any sense.
I wonder how Mcgarity could justify thinking of contributions as anything but revenue.
As a recovering CPA I will say most of the time architect contractor cost and other construction costs are capitalized as part of the asset cost as well even though they are paid in cash. There can be some differences between tax and Generally Accepted Accounting Principles(GAAP) and there is even some flexibility under GAAP,. nobody should be interested in that stuff, but in ol Greg’s case The tales of Peter Rabbit must be challenging
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He’s saying a large portion of the “revenue” is restricted donations to the new ongoing projects and consequently a story about how UGA has a huge windfall from the net of revenue less expenses is incomplete.
This is being spun up by malcontents looking for a new way to bitch
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For me CPA means “Couldn’t Pass Again,” but to the point, I totally agree with you. To look at the operation of the AA, I would probably suggest the cash flow statement is whole lot more insightful statement on the financial health over a period of time in combination with the balance sheet.
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Mcgarity thinks assets (West end zone, sports facilities upgrades) are expenses
Dumb as a brick.
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No, McGarity is saying that assets are a capital expenditure and not an operational expense. The Senator is the one you should accuse of being “dumb as a brick”. You should really just accuse him of having McGarity Derangement Syndrome. Ever since the end of the 2016 season, the Senator has been incapable of holding an objective opinion about McGarity and his statements.
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LOL
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It is funny because it is true.
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You and I both know that isn’t the source of my amusement, but if you need a lengthier explanation, here you go:
— My terrible analogy makes a lot more sense if you read the sentence that immediately precedes it first. Give that a try.
— No one is denying that capital expenditures aren’t operational expenses. It’s just that’s irrelevant to the data McGarity seeks to challenge, both from USA Today and EADA, in the sense that presumably all schools are being measured in the same way. The reason capital expenditures are excluded from the data, as others have pointed out here, is that the school winds up with an asset on its books, unlike an expense.
— McGarity’s point is that he isn’t simply squirreling away money (although, again as someone noted, Weiszer’s article shows that he is), but that doesn’t change what this data shows, namely that the athletic department is raising significantly more revenue than the majority of its conference peers, while incurring significantly less expense than those peers.
— All of this is set against McGarity’s own measure of how his tenure should be judged. I notice you have nothing to say about that.
I don’t know why defending McGarity is the hill you’ve chosen to die on, but I do know why you repeatedly question my motives when I point out how his performance is lacking. There’s nothing personal in anything I write about him — I’ve never even called for his firing — and believe me, if I wanted to get personal about that, it wouldn’t be hard.
McGarity has been successful at one part of his job. Georgia’s athletics department is more profitable than ever. He has also done well increasing its net worth. That being said, his PR skills are abysmal. He has routinely flopped in his dealings with the NCAA. The athletic department’s on-field performance certainly hasn’t matched the resources it’s had available and most of that can be attributed to his mediocre hiring/firing record and his inability until late (at least in football, anyway) to provide meaningful support to the programs he is responsible for managing. Those are all things I have documented at the blog.
GTP is a fan blog about Georgia football. The idea that expressing frustration about McGarity’s poor management skills, on steady display for a decade now, is deranged, is, well, amusing. But don’t let me stop you; just don’t expect me to waste any more time rebutting you.
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Just win…errr…donate baby!
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That is a terrible analogy. He isn’t claiming that the money spent on capital projects isn’t income. He is claiming that it is a capital investment instead of an operating expense. He is absolutely correct. I appreciate 79Dawg doing the write-up so that I didn’t have to do it.
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