Courant: UConn athletics deficit grows to $43.5 million

[UCDaveD]

UConn athletics deficit grows to $43.5 million despite increase in pre-pandemic ticket sales

UConn’s athletic department ran a $43.5 million budget deficit for the 2020 fiscal year, according to a financial statement reported to the NCAA, up slightly from 2019 and again larger than m…

www.courant.com

Not great, but I’d assume most schools lost more money (or made less) in 2020. Still though.

 

[Palatine]

Unless you know exactly how they arrived at that number it's meaningless.

 

[Chin Diesel]

Unless you know exactly how they arrived at that number it's meaningless.

Even when you do have a path towards the final number, it's meaningless. From the article. It's a backwards looking number. Tells you where you were, not where you are, or where you are going.

According to an athletic department spokesperson, last year’s payment toward UConn’s $17 million AAC exit fee is not reflected in the financial statement, which accounts for the period between July 2019 and June 2020, nor are pandemic-related losses from this fall and winter. The financial statement also does not include $26.4 million in donations and pledges the athletic department secured in the 2020 fiscal year, the second-highest amount raised in athletics history.

 

[UconnU]

Not great, but I’d assume most schools lost more money (or made less) in 2020. Still though.

Most schools lose money on athletics in a normal year. In 2018-2019 there were only like 15 profitable athletic departments, and that was with ideal economic conditions. Even most SEC schools lose money. I think the entire pac-12 operates in the red.

With that said $44 million is a gigantic number. That’s not a number that is justifiable in any way.

 

[XLCenterFan]

It shouldn’t be considered a loss. It should just be a cost. Public universities should provide those that attend the ability to play sports. Is what the school spends on research considered a loss? Is what they spend on the debate team or mock trial a loss? Is what they spend on music or arts a loss?

 

[gtcam]

It shouldn’t be considered a loss. It should just be a cost. Public universities should provide those that attend the ability to play sports. Is what the school spends on research considered a loss? Is what they spend on the debate team or mock trial a loss? Is what they spend on music or arts a loss?

Agreed to a certain extent but none of those throw a number close to $44million loss into the bottom line. It's relative yes but it's typical of a public entity; spend out of your arse, show losses and hope the government comes to the rescue. If any private or publicly traded business were run the way the US/state/local entities do very few of us would be employed. It's disgusting.

 

[ScottVib]

Here is the full document.

 

[upstater]

Unless you know exactly how they arrived at that number it's meaningless.

I assure it is not meaningless. Anyone who thinks these AD numbers do anything other than hide the extent of the losses is fooling themselves. Admins are not worried about hiding the "profits" from the athletes. They are worried about hiding the extent of the losses from their biggest customers: parents.

Looking at the budget document, they are spending $33m for coaches and the AD staff. Oooof. Another $13m for recruiting, travel and games.

 

[CL82]

@ScottVib Thanks for the link. I'd love to go through the detail when I have more time.

The school pays about $36M in support of athletics (not counting student fees.) Then the AD pays about half that back to the school for tuition/room and board. So is it fair that to say that the school actually pay @$18M in support of athletics?

Here is one of the biggest takeaways:

If UConn is a part of a P5 conference deal they are making at least the the $36M (which is really $18M net) that they are pumping into supporting the AD.

 

[UConnJim]

Here is the biggest problem with the reporting.

UConn does not allocate $16.8 million in revenues to an individual sport even though the vast majority of these revenues come from football and basketball. Thus, the size of the "deficits" reported for individual sports are due to accounting, not reality.

Judge for yourself as these revenues are not allocated to any sport:

1) NCAA Distribution: $2.2 million

2) Conference distribution: $2.34 million

3) Royalties, licensing, advertising, sponsorships: $12.26 million

The women's basketball media rights with SNY ($1.15 million) is a separate line item so it is allocated to women's basketball. Men's basketball and football have no media rights revenues allocated to the sports.

Oh, and the report doesn't include $26.4 million of donations and pledges made to the athletic department in FY2020.

In addition there are transfer pricing issues (expenses) that you typically see in companies that can lead to bad decision making.

Look, the athletic department has financial issues, but don't use this report exclusively (and the Courant article) to evaluate the situation.

 

[imno1]

We should have spend some of that on a penetrating point guard

 

[CL82]

Looking at the budget document, they are spending $33m for coaches and the AD staff.

Of that number $10M is not allocated to any specific teams, i.e., it is AD office staff. That is in the upper half of P5 schools. That would seem to be a place for reductions.

 

[don356]

I assure it is not meaningless. Anyone who thinks these AD numbers do anything other than hide the extent of the losses is fooling themselves. Admins are not worried about hiding the "profits" from the athletes. They are worried about hiding the extent of the losses from their biggest customers: parents.

Looking at the budget document, they are spending $33m for coaches and the AD staff. Oooof. Another $13m for recruiting, travel and games.

I smell the football program getting toasted. LOL

 

[John]

I smell the football program getting toasted. LOL

your own university's football program is a laughing matter to you?

 

[CL82]

I smell the football program getting toasted. LOL

I don’t know about that, but I am worried about their getting annihilated.

 

[the Q]

Most schools lose money on athletics in a normal year. In 2018-2019 there were only like 15 profitable athletic departments, and that was with ideal economic conditions. Even most SEC schools lose money. I think the entire pac-12 operates in the red.

With that said $44 million is a gigantic number. That’s not a number that is justifiable in any way.

I assure it is not meaningless. Anyone who thinks these AD numbers do anything other than hide the extent of the losses is fooling themselves. Admins are not worried about hiding the "profits" from the athletes. They are worried about hiding the extent of the losses from their biggest customers: parents.

Looking at the budget document, they are spending $33m for coaches and the AD staff. Oooof. Another $13m for recruiting, travel and games.

One of the biggest, if not the biggest reason so many athletics departments have losses has nothing to do with the administration.

 

[Bongo Fury]

Agreed to a certain extent but none of those throw a number close to $44million loss into the bottom line. It's relative yes but it's typical of a public entity; spend out of your arse, show losses and hope the government comes to the rescue. If any private or publicly traded business were run the way the US/state/local entities do very few of us would be employed. It's disgusting.

Private companies don’t run on a deficit? I believe many do and many take years to achieve profit if ever.

 

[Get a Job]

Private companies don’t run on a deficit? I believe many do and many take years to achieve profit if ever.

Don't bother with facts with gtcam. Fox News told him public = evil, private = good, and he's not inclined to let any nuanced truth get in the way of that.

 

[don356]

your own university's football program is a laughing matter to you?

No, but unfortunately I do not think the football program is long for this world. aka "toast" Hope i'm wrong, but a lot of warning signs.

 

[bobbyinaz]

Spending time trying to dissect the numbers on the BY is a waste of time for everyone here.

The bigger concern is the millions of CT residents who don't know the facts but see a headline like this and immediately start saying "something needs to be done about this waste of TAX PAYER dollars".

When they start to make their voices heard which IMHO will be soon based on the budget mess in CT we will likely see more sports shutdown

 

[upstater]

Here is the biggest problem with the reporting.

UConn does not allocate $16.8 million in revenues to an individual sport even though the vast majority of these revenues come from football and basketball. Thus, the size of the "deficits" reported for individual sports are due to accounting, not reality.

Judge for yourself as these revenues are not allocated to any sport:

1) NCAA Distribution: $2.2 million

2) Conference distribution: $2.34 million

3) Royalties, licensing, advertising, sponsorships: $12.26 million

The women's basketball media rights with SNY ($1.15 million) is a separate line item so it is allocated to women's basketball. Men's basketball and football have no media rights revenues allocated to the sports.

Oh, and the report doesn't include $26.4 million of donations and pledges made to the athletic department in FY2020.

In addition there are transfer pricing issues (expenses) that you typically see in companies that can lead to bad decision making.

Look, the athletic department has financial issues, but don't use this report exclusively (and the Courant article) to evaluate the situation.

It did report donations.

 

[the Q]

Spending time trying to dissect the numbers on the BY is a waste of time for everyone here.

The bigger concern is the millions of CT residents who don't know the facts but see a headline like this and immediately start saying "something needs to be done about this waste of TAX PAYER dollars".

When they start to make their voices heard which IMHO will be soon based on the budget mess in CT we will likely see more sports shutdown

The reason they have too many sports is for reasons that have nothing to do with the administration

 

[CL82]

Don't bother with facts with gtcam. Fox News told him public = evil, private = good, and he's not inclined to let any nuanced truth get in the way of that.

Take it to the McHugh.

 

[mrl2016]

Don't bother with facts with gtcam. Fox News told him public = evil, private = good, and he's not inclined to let any nuanced truth get in the way of that.

Private companies can run a deficit and be successful because they are growing market share or show tremendous promise in their future prospects of lowering costs and turning a profit

Doesn’t take a genius to realize this isn’t the case with UConn athletics

 

[huskymedic]

It did report donations.

It included less than $1m in contributions but...

“The financial statement also does not include $26.4 million in donations and pledges the athletic department secured in the 2020 fiscal year, the second-highest amount raised in athletics history.”

 

[Bongo Fury]

Spending time trying to dissect the numbers on the BY is a waste of time for everyone here.

The bigger concern is the millions of CT residents who don't know the facts but see a headline like this and immediately start saying "something needs to be done about this waste of TAX PAYER dollars".

When they start to make their voices heard which IMHO will be soon based on the budget mess in CT we will likely see more sports shutdown

Yep, News likes to exaggerate headlines

 

[huskymedic]

Alternate access read here<<

 

[Greathusky]

I propose that all UCONN athletes go commando saving money on clothing and laundry expenses.

 

[Caronimo]

Need to fill the rent again

 

[upstater]

It included less than $1m in contributions but...

“The financial statement also does not include $26.4 million in donations and pledges the athletic department secured in the 2020 fiscal year, the second-highest amount raised in athletics history.”

Like I said earlier though, the game is never to hide the $$ from the athletes but from the parents.

So this plays out in so many different ways.

For example, branding. Colleges pile all the money from branding/royalties into athletics revenue. In many places, it is probably deserved. But, if you've been on Yale's campus or let's say NYU or Boston U. (non-athletic type schools) you will see kids wearing branded sweatshirts etc. For state schools where you have non-students wearing sweatshirts, hats, etc., it makes more sense to count that as athletic revenue. But is it 100% due to athletics? Or 95%? 75%?

Then there's donations. Without a breakdown it's hard to know what's being counted in this UConn number. Is this the donation for a hockey rink? Baseball field? Soccer field?

A lot of schools will use the donations as athletics department revenue. That's well and good since it was donated for athletics purposes. BUT then the school builds the facility with its own money (or bonds it out and ends up servicing the loan from the academic side). Which means: the donations to the facility were counted as athletic revenue. But the cost of building the facility was borne by the academic side.

U. Michigan did this a decade ago when it expanded the big house and remade basketball/hockey arenas, built new training facilities etc. The donations counted as AD revenue. The academic side bonded out the facilities, and now maintains the loans at a cost of over $20m a year ($450m in loans). Until 2 years ago, the AD did not reimburse the academic side for the cost, but now it does.

Infamously, there's the Oklahoma St. case from 2008. T. Boone Pickens gave the school $175m to build on their football stadium. The school counted that money as pending revenue. But the costs to build were provided by the academic side. So they bonded it out and started building. Then the 2008-2009 meltdown happened, Pickens lost a ton of money, temporarily reneged on his commitment to the school. The upshot was horrible for Oklahoma State, as faculty there had won some big gov't research contracts that required the school to build out new facilities for the research. But because of the stadium and the disaster on their finance sheet, they couldn't secure the bonds to build. They were way over their skis. They not only ended up not building the research facilities, but they also lost over $100m in grants, when the time expired for the research to start. Several years later, Pickens made god on his promise and gave the school $175m for athletic facilities. It was all counted as revenue by the ADs office.