UConn athletic department deficit reached $42 million in 2019 with a decline in ticket sales and league revenue

[J187Money]

It makes all of the difference. When an OOS student pays tuition, UCONN gets $. When an IS student pays tuition, UCONN gets $. An athlete pays nothing.

UCONN will generate the same amount of tuition $ from its scholarship athletes whether the mix is 100% OOS students or 100% IS students. So if UCONN's cash position is the same - pretending they "lost" more money because some of the athletes came from OOS just doesn't make any sense.

At the time that the last scholarship is given out in any given year, the cost structure of the university has already been sorted, the state subsidy has already been decided, the P&L is fully baked, and whether the last scholarship is going to an OOS or IS student - doesn't really matter. They both will consume services from the university at the same rate, and bring the same income - $0.

Sure - the school will make some journal entries and possibly even move some money around from one account to another depending on the decision, but that's just cost accounting - which is 100% subject to how senior management wants to look at the numbers. Cost accounting is art, not science.

 

[kibblesnbits]

If you want to perform a real financial analysis then this is an opportunity cost issue. The university is capacity constrained so it is going to take the same number of students regardless of whether they are on scholarship or financial aid/paying. The opportunity cost to the university of having athletic scholarships is the lost revenue from those athletes replacing the paying kind. That would be the average revenue received for tuition, R&B, etc. from such students. If the student body is 2/3 in-state paying $20K after financial aid and 1/3 out of state paying $35K after aid then a reasonable estimate of the opportunity cost for a scholarship is $25K. The total cost for athletics is the total scholarship opportunity cost plus stipends (have those started?), athletic department operating costs, athletic department capital allocations, etc.

 

[Old blue]

Can't help but think this has little to no impact on UCONN basketball or athletics. Kinda like the national deficit, just used when convenient politically, and just big numbers with no real impact on the individual or institution. I attended UConn in the late 80's, and we had state budget issues then too, and I always thought thats why they're stuffing us into dorms 3 or 4 deep into rooms meant for 2 people, thats why we played basketball in a gym that was out of the 50's, and thats why i lifted weights in a backroom that looked like something in my grandfathers old basement in that gym. Then I Went to a uconn game last year for first time in 20 years at Gampbel, and couldn't believe how the place had grown, and the quality of the facilities and dorms. I'm pretty sure the money is flowing into Uconn for anything they need, and its not coming from State coffers, but from parents checkbooks...Just sayin.

 

[Irishfan]

It makes all of the difference. When an OOS student pays tuition, UCONN gets $. When an IS student pays tuition, UCONN gets $. An athlete pays nothing.

UCONN will generate the same amount of tuition $ from its scholarship athletes whether the mix is 100% OOS students or 100% IS students. So if UCONN's cash position is the same - pretending they "lost" more money because some of the athletes came from OOS just doesn't make any sense.

At the time that the last scholarship is given out in any given year, the cost structure of the university has already been sorted, the state subsidy has already been decided, the P&L is fully baked, and whether the last scholarship is going to an OOS or IS student - doesn't really matter. They both will consume services from the university at the same rate, and bring the same income - $0.

Sure - the school will make some journal entries and possibly even move some money around from one account to another depending on the decision, but that's just cost accounting - which is 100% subject to how senior management wants to look at the numbers. Cost accounting is art, not science.

there are obviously many ways that you can calculate the expenses allocated to the various sports programs. I think the more important thing is the revenues generated. None of this matters if the ticket sales,TV money and alumni contributions get to the point where the expenses are covered. I still find it hard to believe that a women’s basketball program can generate 35% more gross revenue than a FBS football program.

 

[Drew]

Says in the article in 2021 it will start getting better, which would make sense since that is when travel savings and increased TV revenue will be realized. I have updated the spreadsheet for the increase in donations and from an earlier critique changed it from an annualized calculation to a NPV analysis. UConn will come out ahead, it just won't be realized overnight.

It's very good reporting by HC and Putterman, but don't get too caught up in the headline.

Always open to comments and critiques on how to improve this.

Do you have a link to this spreadsheet I can post (perhaps protect it first so nobody can edit the data) in an article on The Athletic? A guy is pissing me off and I want to educate him on how wrong he is on UConn‘s football future

 

[Exit 4]

Listening to this podcast. What balloon knots.

 

[Storrs South]

Do you have a link to this spreadsheet I can post (perhaps protect it first so nobody can edit the data) in an article on The Athletic? A guy is pissing me off and I want to educate him on how wrong he is on UConn‘s football future

Could probably write a dissertation about this spreadsheet at this point by my biggest takeaway from this exercise: no one is catching up to the P5 cartel from a monetary standpoint looking at both outcomes. At least UConn has created a path to deficit reduction with upside.