If you will recall, earlier this year we were treated to the news that Georgia was sitting on a reserve fund of almost $35 million. Why so much? Well, chalk it up to you never know:
Another board member complimented UGA’s fiduciary policy, and then Jere Morehead spoke up to make another point.
“We’re depending on our donors to pay for that project, or else our position changes dramatically,” Morehead said. “We need that project to be funded by our donor base so then we can move on to other projects.”
Nesbit said it would be “ill-advised” to go beyond the $10 million set aside for the west end zone project.
Another board member asked what “unforeseen” events would be that would necessitate keeping the funds. Morehead pointed to the SEC revenue, and whether it will be that much 10 years from now.
This, of course, followed on the heels of a series of rationalizations as to why the athletic department needs to maintain such a sizeable reserve — the gist of which boils down to “donors, pay no attention to why we need to raise more money from you” — topped by my favorite McGarity Moment ever:
McGarity pointed to unforeseen expenses that have already occurred: Paying off previous head coach Mark Richt and his staff. That amounted to about $7 million. As for the future, there are still NCAA lawsuits in the system, McGarity pointed out, related to student-athlete pay and concussions. He also pointed to the NCAA in the last couple years allowing schools to pay athletes for cost-of-attendance and for increased meals.
“There are a lot of assumptions that people are making, that this revenue stream is going to be there forever,” McGarity said. “If we end up having to pay student-athletes down the road, where is that money going to come from? … There are a lot of unknowns, and what this allows us to do, and the right way, is to have a buffer there that allows us to cover the unexpected.”
So what’s going on now? If you predicted the future weather looks even rainier, give your bad self a big cookie.
The athletic association had about $48 million in reserves, money not designated for a particular use, as the fiscal year ended, Nesbit said. [Emphasis added.]
That’s one helluva bump there. The underlying math, as you can imagine, is a little bit fuzzy.
Operating expenses were $119.1 million, leaving the association with an “operating income” of $11.4 million, according to financial documents Nesbit shared with the board. As UGA vice president for finance and administration, Nesbit is also the athletic association’s treasurer
Notable expenses included athletic scholarships ($13.2 million), “general and administrative” ($18.4 million), plant operations and maintenance ($10.9 million), women’s basketball ($2.9 million), men’s basketball ($5.6 million) and football ($28.7 million, down from $31.3 million in fiscal year 2016).
The athletic association also had net nonoperating revenues of $18.9 million, including millions donated for projects such as the ongoing $63 million reconstruction of the west end of Sanford Stadium, where UGA’s football team plays its home games, minus deductions such as $4.5 million turned over to the university for discretionary academic-related spending.
The scholarship spending isn’t really an outlay as much as it is a paper transfer from one department to another, but in any event, the real story is that the UGAAA is rolling in money. It’s McGarity’s job to sell raincoat futures, though, so expect stories of college football’s hypothetical apocalypse to keep flowing. They’re good for business. Not to mention they help take donors’ minds off the department’s current mediocrity.