The first big take on the report covering the period from July 1, 2018 through June 30, 2019 is that, while in some aspects the Georgia Way abides…
The Georgia Athletic Association remains one of the most profitable enterprises in the Southeastern Conference, netting nearly $31 million over expenses in Fiscal Year 2019, according to UGA’s latest NCAA financial report. That report was obtained by The Atlanta Journal-Constitution Monday through an open-records request.
Georgia’s surplus is tops among the SEC athletic programs that have shared their balance sheets publicly so far.
… as does McGarity’s “hey, don’t call it profits” take…
Georgia Athletic Director Greg McGarity attributed the Bulldogs’ strong bottom line to “football success, keeping down expenses and being fiscally responsible.”
While that number is considered profit, McGarity points out that almost all of it of that money already was spent in “capital projects” and predetermined outlays. The athletic association donated $5 million back to the university in 2019 and allocated $23.1 million to ongoing or recently completed facility improvements.
The remaining $2.7 million was turned over to the UGA Foundation for future athletic enhancements, according to Stephanie Ransom, deputy athletic director for finance.
(By the way, just because you choose to spend the money doesn’t mean it’s not a profit, Greg. But I digress.)
… there is one thing in there worth focusing on as a potential canary in the coal mine.
Nearly a third of UGA Athletics’ revenue last year came from contributions — $52.5 million in 2019, 84 percent of which (or $44.3 million) was earmarked for the football program. But overall giving was down significantly from the previous year, 22.5 percent overall and 28.9 percent for football. Georgia reported $67.7 million in donations in Fiscal Year 2018, likely due to the Bulldogs run to the National Championship Game the previous season. [Emphasis added.]
Broadcast money from the conference increased, as did money from ticket sales, but that’s an awfully sharp dip in contributions. Towers attributes that to the national title run from the previous season, but I suspect that the change in the tax laws and the way the athletic department has moved Magill Society contributors to the front of the line has at least as much to do with the decline.
It’s only one year, so it’s not worth drawing any major conclusions yet, but if the decline continues, it sure will be interesting to see if Butts-Mehre takes any steps to arrest the trend, or if it simply embraces the new reality. My guess is that with the new TV contract on the horizon, they’ll be all in on the latter.
Get The Picture 
I attribute the dip in giving to the Tax Law change. The prior reporting period included the final 6 months in which givers could taken a tax write off for Hartman or Magill.
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I also believe the UGAA announced the season ticket 2-tier price increase in early 2018 after many of the donations were already made. The 2018-19 reporting period may reflect some fans deciding to end or cutback on their contributions for this reason in addition to the tax law change.
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I think the tax law is a game changer. I’m sure Matt Borman or someone from the Georgia Bulldog Club will correct me on this. I’m betting people who were giving more than their minimum contribution for their seats to be able to move their seats someday have geared their contributions back since they know the Magill people are getting priority for seat moves and road game tickets and that the additional contribution doesn’t bring any tax benefit (that’s what I did). The minimum contribution is purely a PSL now with the loss of the tax benefit. It’s the price you pay for the right to buy a renewable season ticket and be in the running for WLOCP tickets. Others have decided they will buy tickets to the games on the secondary market that are appealing and available and move to Section HD for the rest. As the loyal die out or decide the hassle isn’t worth the price, it’s going to be difficult to replace that cash.
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I did the same thing – have scaled back to the minimum; however, there is some argument that the excess over the minimum may still be tax deductible – it all depends on how aggressive you want to be and how many other skeletons you might have if you get audited… It will certainly be interesting to see what the trend looks like a year from now!
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I wouldn’t want to sit across from an IRS auditor in a bad mood and needs to make his/her numbers trying to defend that position (even with a great tax accountant or attorney). 😉
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You must know me since you described my thoughts. I had been contributing more than the minimum in order to increase my Hartman Fund score at a faster pace than my peers then I realized in 2017 I could no longer get SEC CG tickets (with my lower Hartman scores I could get SEC CG tickets every previous year we were in the game) I qualified to order fewer away games and my WLOCP seats became worse. I was an idiot. Every dollar over the renewable season ticket threshold got me nothing. I vowed to not even put an extra penny on the Hartman Fund contribution.
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Butts Mehre thinks they can keep raising prices, bouncing kickoff times around for TV, create parking hassles, ignore concession, restroom and concert hassles, and create things like the Magill Society because the peon donors are a captive audience that just has to take it. But, the market is a funny thing.
UGA is not instilling the same athletic loyalty in studentsat the same time its alienating long time fans. The short term cash grab may be coming at the expense of long term stability. Good luck with that, Greg.
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That’s the point Dr. Cobb was making in the article the Senator linked to last week.
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I may join magill society just to piss y’all off.
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Anonymous commenter makes unverifiable promise. Yeah, I’m quivering with rage over that one.
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LOL. I look forward to showing off my insider practice videos and speeches from Kirby where I’ve earned the right to be asked for even more money
To date my donations are directed toward the University directly as opposed to the athletics programs as I feel they have a more direct impact on actually helping students. Hartman gets the minimum
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Watch what happens to donations and season ticket demand over the next 5 years. The home schedules are horrible.
Get ready to see a significant decline.
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I made my contribution for my 50th year today, only for my own satisfaction and to remember my original group, RFRQ.
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Well, AD Greg McGoofy told me he would just raise donation requirements and ticket prices to make up these shortfalls. After all the loyal sheep He meant brethren will follow me over a cliff for my reserve fund. And you can get an extra parking pass for Florida!
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Now I hope y’all know my first comment was facetious. Interesting that this came out today. My wife and I are meeting with school of ag officials today about “what we can do for our school”. Needless to say we give the minimum to keep our seats, but we have told university people that since the athletic department “donates” ($5 million this year) to the general fund, we consider that part of OUR donation to the general fund. Thus, we give less directly as donation requirements for tickets go up. I’m thinking Morehead will figure this out one day and stop the “rob Peter to pay Paul”. My thoughts……
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“we have told university people that since the athletic department “donates” to the general fund, we consider that part of OUR donation to the general fund”
What a terrible take. You pay to be entertained. Good for you. Your entertainment is provided by “students” affiliated with a University. Revenues exceeding expenses can either be (1) spent on facilities (2) spent on salaries (3) put in a reserve (4) transferred to the organization that makes all of the above possible.
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As a fundraiser in higher ed I wouldn’t want to sit in on that meeting and explain why goals and expectations were not met. It’s all about the metrics these days.
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The balloon will burst one day (for all of college football) – possibly sooner than expected.
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yes. And thankfully we have a reserve fund to soften the blow when it does
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Yes, gotta account for the sweet severance packages the administrative staff at BM will get. The country club takes care of its own.
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The reserve fund matches dollar for dollar the bonds that were issued in the Dooley/Damon era to finance construction projects.
But carry on
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McGarity has said on more than one occasion that one of the functions of the precious reserve fund is to account for possible future player compensation needs. So you’re clashing with that when you attempt to explain it away by saying it just matches old construction bonds dollar for dollar. Then again, this kind of confusion happens (by design) when it’s really a shell game and the AD has actually flung multiple bullshit excuses out there over the years.
But I do like the style of the excuse you’ve decided to go with. Pretending that future revenue could be insufficient to cover the leftovers from a cheapskate era that is already a decade in the rear view mirror is amusing. So you have my permission to carry on.
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McGarity’s argument is specious, at best – with the Reserve Fund, maybe we will be able to outgun/outcompensate Alabama for 2 or 3 years, but once the Reserve Fund money is spent, we’ll be in the same boat as everyone else. Is anyone really gonna get the warm-and-fuzzies because we were (maybe) the champs during the first 2 or 3 years after the player compensation waterfall, just because we could pay guys more (for a bit) because of the Reserve Fund?
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Cheapskate era? We have over 100 million in debt that is required to be paid back (see pages 9, 22 and 23 below). I guess UGA should’ve asked for that money from donors but the way everyone bitches about prices and Magill, I’d say it was not likely to have been successful 15-20 years ago.
I’ve never heard possible future player comp as a reason but maybe just never ran across that. I did see this article where it references litigation and unforeseen expenses. Half the money they reference as “reserved” is actually endowed scholarships so inaccessible anyway.
https://www.dawgnation.com/football/uga-amasses-77-million-reserve-funds-prepared
https://www.dacbond.com/dacContent/doc.jsp?id=0900bbc7802134a0
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“$52.5 million (football donations) in 2019…$67.7 million in donations in Fiscal Year 2018….”
Assuming Fiscal Year 2018 is the same as calendar year 2018, this comparison is doubly surprising to me. I’d’a thunk that lots of fans might’ve stepped up their donations in 2019 because of the home schedule, just to get extra tickets for ND and Tex A&M.
I’d bet the 2020 number will be less than 2019’s.
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Does Fiscal year 2018 run from July 2017- July 2018? (Forgive me, I am not in the business realm) If so, the high jumps may be that the Hartman Fund sent out lots of emails encouraging it’s members to donate extra prior to the end of 2017 so we could still get the maximum write off. I know it went toward the 2018 season tickets, but I can’t remember if they allowed you to pay for even more future years because that was definitely out of my budget.
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FYI, most state and local governmental entities have a July 1-June 30 fiscal year, so Fiscal Year 2018 was July 1, 2017-June 30, 2018.
You are no doubt correct that the “donations” line item will continue to go down. Couple it with high dollar boomers dying off, the initial “pop” from the initial McGill Society donations, tax law changes and general declining interest/declining financial ability from the young, the decline will be precipitous IMO…
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Hired guns like Borman will recruit new dollars like Kirby does players, searching far and wide. As long as Kirby keeps Georgia a national brand he has a chance to succeed. Another year out of the playoffs and they’ll be back to begging we peons for that extra 10%, or perhaps 20%. There will be a new Magill type gimmick coming too.
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It’s only a matter of time before they start a “3 points for every dollar donated” promotion.
Which, of course, will inflate point totals even more.
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I wonder if McGoo or any of the brain trust in BM have thought for a minute that relegating long term donors/ticket buyers to second class status with the Magill Society scheme may not have been the best idea after all? Somehow, I doubt it.
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As others have mentioned, the tax law basically made tax benefits via a deduction for the “contribution” a non-factor. It already was limited to 80% (which negated a chunk of the tax benefit anyway, now even if it was deductible in any way the higher standard deduction removes any value for many people.
The next shoe to fall I believe will actually be an INCREASE in required donations for the more desirable seats. To get more Magill donors and $’s, McGarity needs to force me and others who just paid the $3,800 minimum ($475 each) to allow renewal of my 8 seats will go by the wayside. I suspect the top 25-30 rows in the current “green” $475 sections will be re-designated (maybe add permanent chair backs and arm rests to justify) and the per seat rate increased to $1,000. There is a backlog of existing and future McGill donors demanding more for their money, and he needs to offer a plum to get those $’s. There is a limit on what he can can offer someone in the Club Level, but otherwise he has some portion of ~9,000 prime seats where long-time donors can be priced out of the market. This will be his way to get those seats.
Already saw a preview of this type action for basketball tickets this year.
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Stop giving him ideas Chuck, but that’s likely to happen. At that point I likely surrender to the next lower level.
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Alabama is already doing this. The best seats are being recalled for upgrades for larger donors.
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