Discussion in 'Conference Realignment Board' started by don356, Jan 11, 2017.
The Unravelling of College Football Starts With All These Empty Stadiums
On a linked page:
Cal may never get that paid back. California tax payers won't want to help, that's for sure.
Well...sure FAU has a hard time drawing fans...lose 19 games the last two seasons and fans yawn....but I'll bet you that you will see a real upswing in attendance the next two years (Kiffin as coach)
Kansas? Football? LOL..They have lost 31 football games the last three seasons...yep, their audience has reasons for not buying tickets.
Football attendance is expensive at football schools, tickets and mandatory booster fees, mandatory two night stays at local lodging who double their fee on game weekends...vs a high def TV that now gives you a decent experience, if not atmosphere. So there will be some decline in stadium attendance.
More big name programs are moving to make more money from fewer folks...adding attractive events around the game weekend....adding exclusive club seats (such as the new 3000 seat Champion's Club at FSU). You'll be out about $6,000 for a couple of seats the first year and $4000 a year after (not including mandatory booster fees)..and these expensive seats used to be the end zone cheap seats which they ripped out. Fewer seats but lots more money.
Re Debt...as one AD put it...You amortize the monies you take in yearly to improve facilities. It is only a problem when a program has to go into operating expenses to pay debt. When your athletic department takes in 100 million a year, paying for facility improvement is like making a car payment.
It is becoming more difficult for programs bringing in 40-60 million a year to compete in facilities with the guys who bring in near twice that.
So...Clemson builds a player palace with a barbershop, laser tag, theater, slide, nap room, etc, while Temple is sweating costs...and cutting athletics.
I've said for years bigger is not better
Those debt numbers are understated. I know Michigan and Texas are over $300m. And this is why I always say the annual budgets reported and discussed are not the entire picture. Donations meant to fund new facilities are plowed into revenues, and instead facilities are funded with debt. That's just one problem. There are many more.
Michigan's current budgeted debt service is 6,480,000. I'm not sure that can be translated to a $300m balance without a very low interest rate, but I'm too tired to do the math.
I also have little faith in how funny money debt financing works between a university and its athletic department.
Edit: That's funny, my edit above was actually made before seeing Upstater's comment below.
That is the athletic department's budgeted debt service. The academic side picks up the rest. After all, the academic side is the one responsible for the bonds. This goes back to Chrisler and the Football Stadium outlays about 6 years ago. At the time, the program had debt of about $70m, but the two of those sent it over $300m. Total debt service is around $17m.
Non public financing of facilities and payment of coaches' salaries is pretty much the rule for the large public Florida universities...(example although Jimbo is paid over $5 million a year, his state paid salary is $240,000)
"But Florida State University is a public university and is funded by state dollars. So, technically every dollar the university gets belongs to you, the taxpayer. So, why is the athletic department separate?
Officials say it's through ticket revenue, licensed product revenue and Seminole Booster funds that pay athletic salaries. In a sense they fund themselves."
The mandate is to stay in the black.
FSU can not rely on public money for stadium construction /renovation....the Seminole Boosters have been responsible for the building and recent $85 million dollar renovation of the stadium (the second largest continuous brick structure in the world, after the Great wall of China).
The University does sell the bonds but debt service is assumed by the Boosters as a Direct Service Organization.
The larger programs, Michigan, Ohio State, Alabama, Texas, etc. have access to larger private revenue streams and have large booster bases that give them an advantage in fund raising over some other P5 programs.
This is as phony as phony gets.
Just not true.
Texas has huge liabilities paid for by the academic side. They don't show up on the athletic accounting. AND, how in the world are you arguing that branding and ticket revenue or booster donations is somehow not part of the salary he is making from a public entity? After al, the money belongs properly to the school, not the coach. It's just shifting money from one place to another. Just like Texas gives 100% of its branding to athletics. That is school money anyway you cut it. If the distinction is then that the source of the money is what counts, taxpayer outlay versus other sources, you better look at a university budget. Many of these schools have very low taxpayer support. A school like Penn State for instance is under 10% taxpayer and approaching 5%. The big bulk of it comes from the endowment (private) and research grants (mostly private). The other chunk is tuition.
It's crazy to make this argument. The only reason people cut things up like this in the first place is optics. But everyone readily acknowledges that the coach's real salary (as quoted in the media) is that which he derives from all sources. In other word, no one is fooled by this.
Do the bond holders know that? To get a decent rate, the school is either legally on the hook or the fans are just being stupid-fanatical.
There is more and it's not just financial. Set aside the whole concussion issue and think about how the college game is diverging from the pro game. Colleges are increasingly moving to spread offenses. They teach to run it and they teach to defend it. More and more QB's are playing read option or single read from the shotgun. There are QBs coming into the NFL that aren't familiar with taking a snap under center. Blocking schemes are different,l etc. On the defensive side coaches have to scheme to defend read option and spread offenses rather than pro style offenses. On top of all that there is so much money in college football these days that the NFL is having difficulty prying away college coaches, whether assistants or positional, to feed the pro ranks. In the past college coaches across the board were paid far less than their pro counterparts so the NFL pool is stagnating. It will be interesting to see where all of this leads. Many scoffed at the idea of a college football bubble that would be similar to the real estate bubble but it may be closer han any of us thought.
Seminole Boosters is a private non profit DSO organization and it's donations, money raising, etc are in no way public monies generated from taxes (general revenue tax) in Florida.
When they develop a property for instance (from donated land) and use it to produce revenue to support athletics, it is completely separate from the public university and it's academic funding.
See College Town...a Seminole Boosters development.
Welcome to FSU College Town - the Entertainment District in Tallahassee, Florida: Home: FSU College Town at Madison Street
Florida statute authorizes private non profit organizations to be a direct support organization for a university...
and Re Facilities...
(6) FACILITIES.—Each direct-support organization is authorized to enter into agreements to finance, design and construct, lease, lease-purchase, purchase, or operate facilities necessary and desirable to serve the needs and purposes of the university, as determined by the systemwide strategic plan adopted by the Board of Governors. Such agreements are subject to the provisions of ss. 1010.62 and 1013.171.
But I can see where some of you are coming from, considering how public tax money was spent for the UConn stadium ...not all are financed that way.
Texas just brought in $188 million in AD revenue and.....
Texas AD Mike Perrin oversaw an athletic department with $188 million in revenue, $181.5 million in expenses and transferred $10 million back to academics
According to the audited totals, UT’s football program alone brought in $127.9 million and spent only $28.7 million — leaving $99.2 million to fund the school’s other 19 varsity sports. That should be music to coach Tom Herman’s ears. He has strong ideas about expanding the football staff and renovating the Moncrief-Neuhaus Athletic Center.
I don't know which part of my previous post you didn't understand.
If boosters donate money to an athletic department, that money is reported as donations. It is revenue for the athletic department. The outlay, however, for something like facilities, goes through the universities. Those are bonds. Booster organizations don't take out bonds on behalf of universities. I know in theory in Florida they are allowed to, but Goldman Sachs isn't loaning your local booster club $250m for stadium improvements. Ain't happening.
As for Texas, the revenue includes all branding, but the debt is sky high, and NOT paid for by private entities, but by the university itself.
I don't know what part you do not understand...boosters at FSU they do not donate to the athletic department...they donate to a private non profit organization...who is authorized to support certain activities...it is not "public money", it is not tax derived money....
Sure..the University lets the bonds...but they do not make payments...the private non profit does...and in Florida..they are intertwined..
The DSO plans, constructs, and pays for the facilities....the Seminole Boosters does operate with a high debt burden...but that is the result of the recent $85 million upgrades in the stadium, the new indoor practice facility, the new basketball locker room, the multiple facilities constructd at College Town..etc.
Give us a link for all your claims.
And you keep beating this drum about my saying donations are public money. I never said that. I said the money from boosters is counted as revenue from donations.
It is counted...only after the Seminole Boosters donate it to the AD....The University does take in direct donations, although those support the academic side, funded chairs, etc.
The Florida State University Athletics program is completely self-sufficient and does not receive funding from the State of Florida or Florida State University. Funding for the entire athletics budget is comprised of revenues generated from Atlantic Coast Conference distributions, sponsorship agreements (via Seminole IMG Sports), ticket revenue and generous contributions from over 18,000 Seminole Booster members. In Fiscal Year 2013-14, Seminole Boosters supplemented the athletics operating budget by transferring $24M to help cover the cost of scholarships, maintain and upgrade some of the best collegiate facilities in the nation and provide our student-athletes with academic and medical services that give them the winning edge in the classroom and in competition.
Sigh. Transferring money over to the academic side for athletic scholarships is NOT supporting the academic side. It is supporting athletes with academic scholarships. Same goes for athlete academic tutoring and medical services.
The link you gave me basically reinforces what I wrote. The donations are counted as revenue by the athletic department. Meanwhile, the school carries the debt and the debt service.
Then there's this: USA TODAY Sports
In 2015, FSU had students kick in $8.3m for athletics.
Double sigh...The student activity fee (which is what the subsidy is). pays for a large range of intramural sport activities, and for students to get free tickets to football and basketball games. At some institutions students must purchase tickets, at FSU they are included in the activity fee.
You and I will just disagree....the school does not construct or improve the sports facilities, has the athletic debts paid by the DSO, and the athletic department is self sufficient...it is the way it is.
$8m for intramurals.
And now the school isn't the one bonding out the construction of facilities. Preposterous.
You are ridiculous...I said that the University lets the bonds...but the DSO (Seminole Boosters, Inc) designs, constructs, and pays the debt..as a body authorized by the legislature and the Board of Governors to act on FSU's behalf.
And...16,000 student tickets are allotted that are paid for from the activity fee...16,000 tickets X 7 home games equals over 100,000 individual game tickets. Plus basketball.
"Certain categories of students, such as students enrolled at the Panama City campus, Sarasota campus or though Distance Learning, do not pay the full athletics fee and therefore are not eligible for student tickets on a game-by-game basis through this process. However, students that fall into these categories have the option to purchase a discounted student season ticket if they would like to attend games. "
If you haven't toured a major university's intramural facilities...you won't get a feel for the the cost of the building and maintenance swimming pools, volleyball courts, gyms/basketball courts, soccer, rugby,and softball fields..and the Seminole Golf course.
Seminole Golf Course |
You cut and pasted something that showed the DSO gives money to Florida Athletics, which is then counted as athletic department revenue! That means you are counting those donations as revenue, which all schools do, so that's fine. But now you're going against what you even pasted here!
As for intramurals, 8m a year is well beyond the actual costs of running these spaces. Well beyond. Take it from someone who actually sits on committees of a large AAU school overseeing budgets.
40,000 students pay a $225 activity fee...and have access to an FSU golf course ( pretty damn nice University owned club, gyms, pools, intramural fields, courts,...and, on a first come basis system , receive over 100,000 football tickets free and basketball tickets.
Oh great...you sat on an AAU school committee...and I once lobbied FSU budgets and provided legal/policy support to the BOR...so what?
This is done and we have bored a lot of folks.....You want (must) believe that which you must believe for whatever reasons.
FSU's AD receives zero monies from taxpayers, from the university..and is self sustaining. That is a fact, jack.
Yes, 40,000 + students pay a $225 activity fee which is counted as a subsidy on a report....and yes, this fee includes free student tickets to 113,000 student/games on a first come basis, basketball tickets, and a panoply of sports/recreation activities.
If you really think that $8m is for intramurals, I will say it again. You are nuts, and that is way off.
But more to the point, you still haven't given us a link to show how the donations are NOT counted as revenue by the athletic department, but instead are funneled directly to the bondholders.
In fact, the only thing you pasted about FSU's boosters is that the money they give IS counted as revenue by the AD. Which is what I have been saying all along.
Separate names with a comma.