A ‘rona here, a ‘rona there and pretty soon you’re talking about real money.
Patrick Rishe, director of the sports business program at Washington University in St. Louis, believes the upcoming football season will be played — even if it’s during the spring — because of “astronomical financial implications” for athletic departments if it is canceled.
Quite simply, college athletics might not have a financial choice.
Rishe estimates that the 65 Power 5 schools would collectively lose more than $4 billion in football revenues, with at least $1.2 billion of that due to lost ticket revenue. Each Power 5 school would see at least an average loss of $62 million in football revenue, including at least $18.6 million in football ticket sales, he said.
Yeah, I can see where that could be a problem. There’s more to it than just that number, though.
For one thing, while TV is the main revenue driver, what comes from ticket sales isn’t inconsequential.
Public school Power 5 athletic departments on average made nearly half of their total operating revenue from football, with about 14% coming from football ticket sales alone, according to an analysis of 2017-18 financial data provided to ESPN by Syracuse University’s S.I. Newhouse School of Public Communications.
Athletic departments still need those asses in the seats to cover their nut… well, with a couple of exceptions.
About half of the public Power 5 athletic departments were self-sustaining in 2017-18, meaning revenue covered expenses without funding from student fees or university support. Take away football ticket revenue alone and only two schools still make the cut — Georgia and Texas A&M — according to the data from Syracuse University.
So where do you draw the line about attendance? It’s one thing to set up a regimen to test players and staff rigorously, but you can’t do that with your fan base.
Ah, but you say, that’s where the reserve fund comes in. Genius! Cover the shortfall as needed, as that rainy day is finally here. Sounds good, except…
In a multibillion-dollar industry, fewer than half of FBS athletic departments have financial reserves in place that could be used during this type of crisis, according to a recent survey by Lead1 Association, the professional organization that represents athletic directors at 130 FBS schools. In the survey of more than 100 ADs, 41% of Power 5 and 26% of Group of 5 departments confirmed having such a reserve.
But here’s the thing. Even at a place like Georgia that’s managed to save…
A self-sustaining budget coupled with financial reserves places the University of Georgia in a better financial position than most FBS schools should there be a canceled, shortened or delayed football season this fall.
According to the UGA athletic department, it has more than $102 million in reserve funds, which includes 2019-20 reserves, long-term investments and general endowment funds.
“We never thought it would be at this level,” UGA athletic director Greg McGarity said. “With a $153 million budget [for the 2019-20 fiscal year], we tried to stay in that three- to six-month period so we would be able to sustain our program.”
Georgia’s football program accounted for almost half of the athletic department’s $174 million in revenue from ticket sales and contributions alone in the 2018-19 fiscal year, according to its most recent NCAA Membership Financial Report. The Bulldogs generated $34.6 million in football ticket sales and $44.3 million from donations, much of which is attached to those tickets.
“You can run all of the numbers and projections, but if you don’t have that football part, it’s just agonizing,” McGarity said. “If you don’t have football revenue, where does your revenue come from? It’s a huge void that would create some dire situations on the operation of a program.”
… the first instinct isn’t to breathe a sigh of relief and tap those funds. It’s to do everything possible to make a football season happen, regardless. It’s as if the main point of having a reserve fund is not to use it.
Once criticized for not spending enough in the SEC’s seemingly never-ending arms race, the Bulldogs’ reserves will enable them to make things work — at least in the short term — if they can’t play football this fall or face a truncated, conference-only season.
That’s why they playin’. Everywhere.
So… holy shit. Was Greg McGarity the feckless milquetoast empty suit right all these years, and so many of us wrong???
I FEEL LIKE I’M TAKING CRAZY PILLS!!!
Seriously though… need to go reexamine my life a bit.
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Why don’t you wait until the athletic department actually spends some of that reserve fund money before you take a victory lap?
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WTH do you mean, man? A victory lap?
I’ve been one of McGarity’s most vociferous critics anywhere. The level of disdain and loathing I feel for him is usually reserved for how I feel about politicians, not men who have graduated from my beloved university.
I am asking an honest question: Was he right and me and many of us wrong? And if he was right, well: Up is down, black is white, dogs and cats living together, MASS HYSTERIA!
Now, you’re right in that the d-bag still may refuse to dip into the fund. But dude, you completely misread what I was saying.
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It’s not an honest question until the department taps the funds. Until then, it’s just a feel good ledger entry.
BTW, the fund predates McGarity.
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Stockpiling a massive reserve fund and then doing everything possible to not use it was a Dooley principle, right?
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Yes. It’s part of the rich Georgia Way tradition, although Michael Adams weaponized it for his own purpose along the way.
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So – what is the argument here? That McG should take the football season off this year and burn the reserve fund? Not sure what you are saying he should be doing here.
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The argument here is that they’ll risk people’s health putting on a football season before they’ll seriously consider tapping the fund.
I’m not saying what he should be doing, just what he will be doing.
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Sad, more fear mongering. “risk people’s health”….
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Just because you may find the level of risk acceptable doesn’t mean it’s non-existent.
I mean, even you have told me to take care, right? 😉
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I tell most folks that..it’s the Southern thing to do. You could say they are willing to risk “your” health…not everyone feels the same way.
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What horseshit
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I was about the only person here that kept saying that, financially, McGarity was doing the right thing. Everyone kept calling me Mrs. McGarity. This is one instance where it doesn’t feel good to be right. When you go back through history, the probability of shit hitting the fan in each person’s lifetime is much larger than you think.
View this collection on Medium.com
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Planet Earth is waaaay overdue for an Extinction Level Event.
I’m just saying.
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Well, as someone mentioned here once (honestly can’t remember who – take credit if you read this), the reserve fund sort of loses it’s meaning if we and the (stoopid) Aggies are the last ones standing after this. Yay! We saved the program! Oh no, we don’t have anyone out there to play!
So yeah, they will play with or without fans or any variation. They need at least the TV money. And the Mouse needs the ad revenue. And we all need some sports to obsess over.
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I think that’s what makes the ‘reserve fund’ meaningless. If no one else has one and therefore no one else can survive even a 6 month shut down, then what’s the point? As you say, congrats, UGA goes out of business 6 months later than every other school. Or more likely, the other 99% force games to be played and money to flow. Either way the fund is useless.
If the overall health of the finances at one school is totally dependent on the overall financial health of the finances at every other school, what’s the purpose of one school stockpiling reserves?
It’s kind of a reverse mutually assured destruction scenario.
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I’m sure McSuity would tell you it’s about the debt or some other kind of bullshit from his piece-meal approved projects that has us perpetually playing catch-up. Even though most of those have been fully funded by the rest of us.
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Projects are being funded via Magill Society now but 15 and 20 years ago UGAAA’s strategy for construction was through tax free municipal bonds. The amount in the reserve is held back to pay these off in the event that all revenue streams supporting the AA cease to exist so that the AA doesn’t burden the University or the state.
U can hate the plan, but McG is just the 3rd AD in a row that has worked under these same assumptions.
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That’s a good plan assuming there are bonds to service. Thanks for that bit of history. But as you say, now it seems they make it up with the Magill Society so the fund is just a trophy for the AD I guess.
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Exactly Connor. Some reserves are healthy of course, (gotta cover those unforeseen buyouts right?) but a huge war chest is worse than worthless if everyone else doesn’t have the reserves to keep playing.
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Why haven’t they cut anyone’s salary? How about laying off workers? Jesus, every other BUSINESS has done this. And all this talk of playing just shows it’s a business that doesn’t pay it’s revenue generators, the students.
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Amen. McGarity made $575,075.04 in salary in the fiscal year ending June 30, 2019. The UGA AA contributed $75,000.00 to supplement that total, making his iincome for that fiscal year $650,075.04. There is a target for cutting some fat.
Tom Crean has had 2 underwhelming years. The University paid him $399,999.96 in salary in the fiscal year ending June 30, 2019, while the UGA AA supplemented him with $2,799,998.98. So Crean got $3,199,998.94 for 2 conference wins.
Kirby Smart. The University paid him $500,000.04 in salary in the fiscal year ending June 30, 2019, while the UGA AA supplemented him with $6,425,000.00. . So Crean got $6,925.04. Those are two more targets to approach for deferring salary payments.
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Next to last sentence should be “So Smart got $6,925.04.” Sorry
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The Senator can tell you about contract law.
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they already have. This applies to all the staff, coaches included, as they are state employees (though some of the $$ coaches receive is not paid by the State of Georgia).
https://www.ajc.com/news/state–regional-govt–politics/georgia-colleges-plan-furloughs-lawmakers-get-bad-news-economy/41jjgWi4H0pAJs11GbrTPK/
You can find how much base salary subject to the above rules are here:
http://www.open.georgia.gov/openga/salaryTravel/index/salaryTravelForm
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Thanks, Mike, for that link
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There is no way, NO WAY Butts Mehre is going to lay off the Meshad relative of Coach Dooley whose job it is to decide where to put the bone stickers on the football helmets, even if it would save the UGAAA $100,000. https://georgiadogs.com/news/2011/11/21/Behind_the_Scenes_John_Meshad_Equipment_Manager.aspx
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Contract Law permits McGarity to reduce his own salary. Contract law permits McGarity to approach Crean and Smart and ask them if they will voluntarily defer present income. Contract law permits Crean and Smart to say “yes” or to say “no.”
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The Reserve Fund has not won a national championship since 1980.
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Is this the Georgia Way’s moment in the sun ?
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Maybe they’ll frame a copy of a financial statement and hang it under a plaque that reads “2020 pandemic financial national champions”.
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If they ain’t playin’ they need to be layin’ off coaches and savin’ all that money.
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The schools with no reserve fund will have to play….meaning UGA will have to as well regardless of the reserve fund. This would be a good time for conference commissioners to mandate reserve funds to cover specified timeframes like six to twelve months.
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Keep enough female sports to offset football and men’s basketball and cut the rest.
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