When most talking heads talk about AD budgets and revenue...

[upstater]

they leave out the fact that all donations and even brand royalties are counted as AD revenue, while the debt incurred by those foundations accrues to the universities. So, for instance, the building of a stadium is not considered a cost of athletics.

I've been saying this for a long time.

Here is the latest example at Texas Tech as the university takes on $150m+ of debt while the AD is going to show income from donations for the very same project.

https://finance.yahoo.com/news/patrick-mahomes-alma-mater-clinches-164743961.html

 

[UConnJim]

they leave out the fact that all donations and even brand royalties are counted as AD revenue, while the debt incurred by those foundations accrues to the universities. So, for instance, the building of a stadium is not considered a cost of athletics.

I've been saying this for a long time.

Here is the latest example at Texas Tech as the university takes on $150m+ of debt while the AD is going to show income from donations for the very same project.

https://finance.yahoo.com/news/patrick-mahomes-alma-mater-clinches-164743961.html

Upstater, some athletic departments include the cost of stadiums and debt in their expenses and balance sheet. Ohio State Athletic Department does.

 

[upstater]

Upstater, some athletic departments include the cost of stadiums and debt in their expenses and balance sheet. Ohio State Athletic Department does.

It's very rare. UMichigan and UTexas do not, for instance.

The main reason I'm pointing this out is for people who think universities should be paying athletes out of the hundreds of millions they make; rarely, if ever, do these people actually look inside the budgets.

So -- if these programs ever went fully professional and STILL retained viewer/fan interest at current levels, it would be a real question whether they could even afford the money for players they shell out now.

 

[Kolumbo]

they leave out the fact that all donations and even brand royalties are counted as AD revenue, while the debt incurred by those foundations accrues to the universities. So, for instance, the building of a stadium is not considered a cost of athletics.

I've been saying this for a long time.

Here is the latest example at Texas Tech as the university takes on $150m+ of debt while the AD is going to show income from donations for the very same project.

https://finance.yahoo.com/news/patrick-mahomes-alma-mater-clinches-164743961.html

I'm sure all of these universities handle things which puts them in the best light and I'm not really interested in this aspect. The public U's especially will find the money. And I'm sure you know about financials too. The capital assets are probably assets of the University and the related debt are all balance sheet items while interest expense is P&L. I don't know if they include those expenses as costs to the athletic departments. Either way, I think those large schools will be able to afford it, or at least afford much more than everyone else.

 

[Fishy]

I'm sure all of these universities handle things which puts them in the best light and I'm not really interested in this aspect. The public U's especially will find the money. And I'm sure you know about financials too. The capital assets are probably assets of the University and the related debt are all balance sheet items while interest expense is P&L. I don't know if they include those expenses as costs to the athletic departments. Either way, I think those large schools will be able to afford it, or at least afford much more than everyone else.

For years, UConn went out of its way to present its athletic department in the worst possible light. Some of our recent reductions in institutional support were “realized” through just presenting the financials in a more favorable light…like every other school in the country.

We had a hand in creating the “UConn’s broke” narrative that has done us no favors.

 

[upstater]

I'm sure all of these universities handle things which puts them in the best light and I'm not really interested in this aspect. The public U's especially will find the money. And I'm sure you know about financials too. The capital assets are probably assets of the University and the related debt are all balance sheet items while interest expense is P&L. I don't know if they include those expenses as costs to the athletic departments. Either way, I think those large schools will be able to afford it, or at least afford much more than everyone else.

I would not say the best light.

I would say they have to hide the huge losses from the parents paying full freight tuition and from the citizens who are highly subsidizing the publics.

I would say they are trying to survive by hiding the facts from people who might [eventually] wonder why they're called upon to shell out the cash.

As for whether they include those expenses at cost, I haven't looked at every budget. I don't know. I can only assume what goes from having looked at Texas, Michigan, Oklahoma St, and a few others. I looked into these 3 precisely because they became embroiled in huge problems regarding their loans on stadiums.

Recently, the same has happened at Texas A&M, West Virginia, Stanford, U. Cal-Berkeley, but I haven't looked into it.

 

[Kolumbo]

I would not say the best light.

I would say they have to hide the huge losses from the parents paying full freight tuition and from the citizens who are highly subsidizing the publics.

I would say they are trying to survive by hiding the facts from people who might [eventually] wonder why they're called upon to shell out the cash.

As for whether they include those expenses at cost, I haven't looked at every budget. I don't know. I can only assume what goes from having looked at Texas, Michigan, Oklahoma St, and a few others. I looked into these 3 precisely because they became embroiled in huge problems regarding their loans on stadiums.

Recently, the same has happened at Texas A&M, West Virginia, Stanford, U. Cal-Berkeley, but I haven't looked into it.

The thing is, most of those large schools are probably not doing too badly, other than places like Rutgers, of course. I was just highlighting that capital investment is different than operating expenses so I don't know if they even have huge losses.

 

[upstater]

The thing is, most of those large schools are probably not doing too badly, other than places like Rutgers, of course. I was just highlighting that capital investment is different than operating expenses so I don't know if they even have huge losses.

When $400m worth of expenditures aren't showing in your budget, what would you call it?

 

[Fishy]

The thing is, most of those large schools are probably not doing too badly, other than places like Rutgers, of course. I was just highlighting that capital investment is different than operating expenses so I don't know if they even have huge losses.

I think you would be surprised to learn that nearly all of them are hurting quite a lot.

 

[Kolumbo]

I think you would be surprised to learn that nearly all of them are hurting quite a lot.

I would be very surprised. I'd feel bad for Texas and Ohio State if they couldn't remain afloat bringing in a quarter of a billion annually. I suppose pain is relative.

 

[upstater]

I would be very surprised. I'd feel bad for Texas and Ohio State if they couldn't remain afloat bringing in a quarter of a billion annually. I suppose pain is relative.

We saw a couple weeks ago that Ohio State was in the hole.

Maybe that's because they show stadium expenses in their budget?

 

[Kolumbo]

We saw a couple weeks ago that Ohio State was in the hole.

Maybe that's because they show stadium expenses in their budget?

38 million deficit? Ohio State will search the couch cushions.

 

[CL82]

For years, UConn went out of its way to present its athletic department in the worst possible light. Some of our recent reductions in institutional support were “realized” through just presenting the financials in a more favorable light…like every other school in the country.

We had a hand in creating the “UConn’s broke” narrative that has done us no favors.

The "UConn is broke narrative" was aimed at maximizing legislative support, but hurts us somewhat in our conference real alignment narrative

 

[upstater]

38 million deficit? Ohio State will search the couch cushions.

$38m is serious money.

At our institution with $1b+ budget, they started shuttering things when they went $2-4m in the hole.

How much of a budget is fungible?

$100m maybe?

The rest is locked in.

 

[Kolumbo]

$38m is serious money.

At our institution with $1b+ budget, they started shuttering things when they went $2-4m in the hole.

How much of a budget is fungible?

$100m maybe?

The rest is locked in.

Let's be serious. $38 mill is a rounding error. I'll bet it's probably due to extraordinary expenses. What happens is if they start running deficits, they can cut costs. Coaching salaries and the like. $38 mill certainly isn't painful. A minor irritation perhaps. None of the P2 are hurting at all.

 

[upstater]

Let's be serious. $38 mill is a rounding error. I'll bet it's probably due to extraordinary expenses. What happens is if they start running deficits, they can cut costs. Coaching salaries and the like. $38 mill certainly isn't painful. A minor irritation perhaps. None of the P2 are hurting at all.

I've seen people and departments get axed for 1/6th of that.

Let's be real here. Do you work inside universities? Anyone who thinks $38m is a rounding error doesn't know how university budgets work.

The entire budget of a Humanities & Liberal Arts college inside a university is around $25m-$50m.

 

[Ha Who]

Let's be serious. $38 mill is a rounding error. I'll bet it's probably due to extraordinary expenses. What happens is if they start running deficits, they can cut costs. Coaching salaries and the like. $38 mill certainly isn't painful. A minor irritation perhaps. None of the P2 are hurting at all.

You’ve made the exact argument as to the reason the cartel will fail

 

[Kolumbo]

I've seen people and departments get axed for 1/6th of that.

Let's be real here. Do you work inside universities? Anyone who thinks $38m is a rounding error doesn't know how university budgets work.

The entire budget of a Humanities & Liberal Arts college inside a university is around $25m-$50m.

You need a refresher course in the concept of "relative"

Ohio has 12 million people
Ohio State has an Endowment of $8 Billion and a Budget of $10 Billion

We can move away from the ledge now and focus on something significant

 

[upstater]

You need a refresher course in the concept of "relative"

Ohio has 12 million people
Ohio State has an Endowment of $8 Billion and a Budget of $10 Billion

We can move away from the ledge now and focus on something significant

Aye-yaye-yaye.

Wexner Medical's budget alone is $3b of that, James Cancer Research is more,

These entities don't get hit because of the AD. In fact, the entire campus system (6 of them) isn't part of this. Columbus is.

The budget is $4b and it's growing at 7% rate with outside tuition increases.

Here is their fungible amount:

"The university is projecting a surplus of $112.6 million before depreciation or capital items. This surplus becomes a loss of $216.7 million after depreciation. University surpluses are not completely fungible as some funds are for restricted purposes. The university surplus is comprised of general funds used for teaching and other unrestricted uses, restricted funds from grants, gifts, or governmental appropriations, and earnings funds such as housing and dining and health sciences clinical operations. University funds are tracked and managed to ensure all restrictions are met. Of the $112.6 million surplus before depreciation or capital items, $62.6 million is from general funds, $8.8 million is from earnings funds, and the remainder is for restricted purposes."

Imagine that, from $10 billion down to $112.6m for operation of fungible elements of the budget.

 

[CTFAN4LIFE]

Let's be serious. $38 mill is a rounding error. I'll bet it's probably due to extraordinary expenses. What happens is if they start running deficits, they can cut costs. Coaching salaries and the like. $38 mill certainly isn't painful. A minor irritation perhaps. None of the P2 are hurting at all.

About 15-20 universities actually make money on athletics. Most lose $10-40m annually. Universities across the country are facing a student apocalypse and are starting to tighten belts. Decisions are being made to cut both athletic and academic programs. Every dollar is going to be scrutinized by school trustees and, in the case of state schools, governors (see UConn's recent budget/funding fights as an example - and that's within a state government that has surpluses and way above average debt/pension debt retirement rates as compared to other states).

It's silly to think that $40m is couch money to any institution. And, with the House settlement looming (and it might be followed by other class lawsuits), everyone is scrambling to find a million here, a million there just to stay competitive. Why do you think even the B1G and SEC are trying to squeeze out additional revenues from the CFP, non-con scheduling, possible PE investments, etc. etc. ???

 

[BigTenFan]

It is true that Ohio State may bring in more revenue than most other institutions...it most likely is not one of the most profitable or efficiently run programs

 

[Kolumbo]

About 15-20 universities actually make money on athletics. Most lose $10-40m annually. Universities across the country are facing a student apocalypse and are starting to tighten belts. Decisions are being made to cut both athletic and academic programs. Every dollar is going to be scrutinized by school trustees and, in the case of state schools, governors (see UConn's recent budget/funding fights as an example - and that's within a state government that has surpluses and way above average debt/pension debt retirement rates as compared to other states).

It's silly to think that $40m is couch money to any institution. And, with the House settlement looming (and it might be followed by other class lawsuits), everyone is scrambling to find a million here, a million there just to stay competitive. Why do you think even the B1G and SEC are trying to squeeze out additional revenues from the CFP, non-con scheduling, possible PE investments, etc. etc. ???

Why? Pure unadulterated greed. What's your number? More. Big schools with big time football are fine and will be fine. I can't believe we are discussing, on a UConn board, the pain this is causing big time programs.

Like you wrote, most schools lose millions annually. It's OK.

 

[CTFAN4LIFE]

Why? Pure unadulterated greed. What's your number? More. Big schools with big time football are fine and will be fine. I can't believe we are discussing, on a UConn board, the pain this is causing big time programs.

Like you wrote, most schools lose millions annually. It's OK.

You call it greed, but you are focused only on the top line while ignoring costs and the bottom line.

 

[Kolumbo]

You call it greed, but you are focused only on the top line while ignoring costs and the bottom line.

Joking right? It is all about greed. All of the decision makers are making bank and they know the states have deep pockets. It's not like college football will go bankrupt and go away. Ohio State just won the national championship and you think they are worried about a deficit. We are too used to dealing with UConn's issues but they are far from UConn. OK, I'm out.

 

[UConnJim]

Ohio St.'s AD deficit was driven by 2 factors: Fewer home football games (resulted in a decline in ticket sales and sponsorships) and severance payments (basketball coach Holtmann). Of course, football coaching salaries also went up. OSU's AD is focused on breaking even or making money each year.

 

[CTFAN4LIFE]

Joking right? It is all about greed. All of the decision makers are making bank and they know the states have deep pockets. It's not like college football will go bankrupt and go away. Ohio State just won the national championship and you think they are worried about a deficit. We are too used to dealing with UConn's issues but they are far from UConn. OK, I'm out.

You've really got yourself convinced... Perhaps also consider the concerns universities and states are under in terms of the current administration's stated goals of reducing federal dollars for general education and research grants. That alone could be tens to hundreds of millions of dollars per school not flowing into university budgets.

That all said, schools will likely continue to look at athletics as advertising/marketing arms in order to dive student applications, donations, etc. and so while unlikely schools won't pull the plug on subsidizing AD losses, every dollar spent will get more and more scrutiny. This will force AD's to raise ticket prices, pound the sand for even more athletic-specific donations, etc.

Gone are the days of free flowing milk and honey.

 

[Kolumbo]

You've really got yourself convinced... Perhaps also consider the concerns universities and states are under in terms of the current administration's stated goals of reducing federal dollars for general education and research grants. That alone could be tens to hundreds of millions of dollars per school not flowing into university budgets.

That all said, schools will likely continue to look at athletics as advertising/marketing arms in order to dive student applications, donations, etc. and so while unlikely schools won't pull the plug on subsidizing AD losses, every dollar spent will get more and more scrutiny. This will force AD's to raise ticket prices, pound the sand for even more athletic-specific donations, etc.

Gone are the days of free flowing milk and honey.

So that was a long way of saying that the Athletic Departments will be fine. Or, what exactly is your point? Are ADs in trouble or not? I don't think so.

 

[CTFAN4LIFE]

So that was a long way of saying that the Athletic Departments will be fine. Or, what exactly is your point? Are ADs in trouble or not? I don't think so.

Nowhere did I say they're fine. Yes, they're in troubled waters. Stop twisting things to fit your narrative.

 

[Kolumbo]

Nowhere did I say they're fine. Yes, they're in troubled waters. Stop twisting things to fit your narrative.

So just say that then. In which case I strongly disagree. No way are the Ohio States of the world in troubled waters. Every year they are getting record revenues. They make money and they spend money. A $38 million deficit is nothing at all to be concerned about. Probably just an accounting ploy to be able to request more funding. Just look at the dollars coming and going.

 

[BigTenFan]

Ohio State and a number of other large Universities get zero state funding