[fullmetal]

Now, after staggering to losing football seasons in four of the last five years and seeing attendance drop to levels last seen in the 1970s, the Vols find themselves mired in more than $200 million of debt, the most in the SEC, with reserves of just $1.95 million, the least in the conference.

Interesting breakdown of where this debt came from and the issues surrounding (and complicating) it.

http://www.sportsbusinessdaily.com/Journ...essee.aspx

[fullmetal]

Now, after staggering to losing football seasons in four of the last five years and seeing attendance drop to levels last seen in the 1970s, the Vols find themselves mired in more than $200 million of debt, the most in the SEC, with reserves of just $1.95 million, the least in the conference.

Interesting breakdown of where this debt came from and the issues surrounding (and complicating) it.

http://www.sportsbusinessdaily.com/Journ...essee.aspx

[Nan3cy]

Wow. Average attendance has plummeted to nearly 90,000.

[Nan3cy]

Wow. Average attendance has plummeted to nearly 90,000.

[fullmetal]

That gets at me--even in 2011, Tenn was still ranked 6th nationally in attendance with 'only' ~95k in average attendance.  Don't tell me 6th in the nation isn't good enough.  Of course, when the difference between 6th and, say, 3rd is roughly ~15k per home game (let's call it 7 home games?), I suppose an additional 105k seats' worth of revenue would be nice.  Even if you could sell all those seats for $50 a pop, that's only about $5 million more to play with, compared to the $200+ mil debt.  I guess what Tenn needs is football success so that boosters will step up to cover all that debt.  Or maybe they need some serious bowl game revenue.

[fullmetal]

That gets at me--even in 2011, Tenn was still ranked 6th nationally in attendance with 'only' ~95k in average attendance.  Don't tell me 6th in the nation isn't good enough.  Of course, when the difference between 6th and, say, 3rd is roughly ~15k per home game (let's call it 7 home games?), I suppose an additional 105k seats' worth of revenue would be nice.  Even if you could sell all those seats for $50 a pop, that's only about $5 million more to play with, compared to the $200+ mil debt.  I guess what Tenn needs is football success so that boosters will step up to cover all that debt.  Or maybe they need some serious bowl game revenue.

[82 Card]

It looks like they have been trying to bleed their fans by jacking up ticket prices. Ticket revenues are up. It sounds like they were using the kinds of projection used by MBA's to sell real estate deals to the home office, figuring they would be in new jobs by the time the chickens come home to roost.

[82 Card]

It looks like they have been trying to bleed their fans by jacking up ticket prices. Ticket revenues are up. It sounds like they were using the kinds of projection used by MBA's to sell real estate deals to the home office, figuring they would be in new jobs by the time the chickens come home to roost.

[Redrum]

a)" It looks like they have been trying to bleed their fans by jacking up ticket prices. Ticket revenues are up. "

b)  "It sounds like they were using the kinds of projection used by MBA's to sell real estate deals to the home office, figuring they would be in new jobs by the time the chickens come home to roost."

a)  You are correct, sir.

b)  No, it's not a scam.  They were/are simply delusional.  They believed that because it was the SEC and because they regularly drew 80,000+  they would continue to draw 100,000+ simply because, hey, they were Tennessee of the SEC.  Put dreck on the field and crowds actually drop off?  In the words of  Vizzini from The Princess Bride..."Inconceivable!!"
I have a friend from work--Tenn. grad from big Tenn fan family-- who regularly drove the 3-4 hrs. from N. Alabama to Knoxville for most home games.  He gave up his tickets and doesn't do that no mo'.  Very put off by the whole price gouging while the team puked all over itself in public.  Doubt he'll be back once they right the ship.

[Redrum]

a)" It looks like they have been trying to bleed their fans by jacking up ticket prices. Ticket revenues are up. "

b)  "It sounds like they were using the kinds of projection used by MBA's to sell real estate deals to the home office, figuring they would be in new jobs by the time the chickens come home to roost."

a)  You are correct, sir.

b)  No, it's not a scam.  They were/are simply delusional.  They believed that because it was the SEC and because they regularly drew 80,000+  they would continue to draw 100,000+ simply because, hey, they were Tennessee of the SEC.  Put dreck on the field and crowds actually drop off?  In the words of  Vizzini from The Princess Bride..."Inconceivable!!"
I have a friend from work--Tenn. grad from big Tenn fan family-- who regularly drove the 3-4 hrs. from N. Alabama to Knoxville for most home games.  He gave up his tickets and doesn't do that no mo'.  Very put off by the whole price gouging while the team puked all over itself in public.  Doubt he'll be back once they right the ship.

[Farm93]

Their "problems" are not that bad.

They at least had a goose laying golden eggs, and honestly I think the goose will fuel this AD engine again soon.  There are many programs out there that borrow a bunch to build major projects when they have no real reason to believe the future gift giving or ticket sales will every come close to paying for the projects.

Seems as though they took on some major projects and debt for those projects should have been covered by incremental revenue.  The revenue is not quite there yet because of relatively bad economic times and a very weak football team.  No reason to panic.  Despite the ticket revenue struggles all would still be OK if the conference could get their new TV revenue stream now, the program could avoid unique taxes and/or the program could avoid paying $7 million to the university each year.

Nothing to see here really.  A picture of health compared to a school nearby that runs big annual deficits, funded a major project on the dream of non-binding long-term mortgages, and has a history of alumni apathy unmatched in the BCS conferences.

Compare that to UCB. 

[Farm93]

Their "problems" are not that bad.

They at least had a goose laying golden eggs, and honestly I think the goose will fuel this AD engine again soon.  There are many programs out there that borrow a bunch to build major projects when they have no real reason to believe the future gift giving or ticket sales will every come close to paying for the projects.

Seems as though they took on some major projects and debt for those projects should have been covered by incremental revenue.  The revenue is not quite there yet because of relatively bad economic times and a very weak football team.  No reason to panic.  Despite the ticket revenue struggles all would still be OK if the conference could get their new TV revenue stream now, the program could avoid unique taxes and/or the program could avoid paying $7 million to the university each year.

Nothing to see here really.  A picture of health compared to a school nearby that runs big annual deficits, funded a major project on the dream of non-binding long-term mortgages, and has a history of alumni apathy unmatched in the BCS conferences.

Compare that to UCB. 

[fullmetal]

In addition, outstanding debt and debt service for athletic departments can fluctuate greatly from year to year. Just a year ago, Alabama and LSU carried more debt on their books than Tennessee. According to Alabama’s 2010-11 NCAA financial disclosure, it had outstanding debt of $207 million. LSU came in right behind at $202 million. Tennessee was third in the conference at $188 million. For the 2010-11 fiscal year, Tennessee was fifth when it came to annual debt service payments, behind Alabama, LSU, Georgia and Auburn.

Apparently this is normal for the $EC...

http://espn.go.com/blog/playbook/dollars...-not-alone

[fullmetal]

In addition, outstanding debt and debt service for athletic departments can fluctuate greatly from year to year. Just a year ago, Alabama and LSU carried more debt on their books than Tennessee. According to Alabama’s 2010-11 NCAA financial disclosure, it had outstanding debt of $207 million. LSU came in right behind at $202 million. Tennessee was third in the conference at $188 million. For the 2010-11 fiscal year, Tennessee was fifth when it came to annual debt service payments, behind Alabama, LSU, Georgia and Auburn.

Apparently this is normal for the $EC...

http://espn.go.com/blog/playbook/dollars...-not-alone

[M T]

Could this be behind the outstanding (debt) Tenn athletic department?

Tennessee athletic director Dave Hart has asked Chancellor Jimmy Cheek for help.

“I asked him, would he consider when we’re done renegotiating the SEC [television] contract, could all the money stay in athletics, and he said, ‘Yes,’”

It wouldn't be the first time I've seen a group manipulate their debt load & cash flow to look really strapped to better their negotiating position to get a bigger piece of a new pie.  (Do note that it is the athletic director that is getting this commitment on record with the press.)

Maybe next they'll threaten to drop football unless the alums come up with some really big bucks.

[M T]

Could this be behind the outstanding (debt) Tenn athletic department?

Tennessee athletic director Dave Hart has asked Chancellor Jimmy Cheek for help.

“I asked him, would he consider when we’re done renegotiating the SEC [television] contract, could all the money stay in athletics, and he said, ‘Yes,’”

It wouldn't be the first time I've seen a group manipulate their debt load & cash flow to look really strapped to better their negotiating position to get a bigger piece of a new pie.  (Do note that it is the athletic director that is getting this commitment on record with the press.)

Maybe next they'll threaten to drop football unless the alums come up with some really big bucks.

[Kathy]

What is your objection to athletic revenue going to fund athletic expenditures?

I live in an SEC community, and the money coming in from SEC television contracts and bowl game revenue will stay in the athletic department here, too. The new construction for athletic facilities upgrades at Mizzou will be funded by athletic department funds (which includes SEC revenue and booster donations). Indeed, the most compelling reason for MU jumping ship from the Big 12 to the SEC was the much more favorable revenue stream (all 14 members share equally in a much bigger money pie). Unlike the weenies' situation in California, MU's position as a public university means the athletic department must be self-supporting -- payback of construction debt must come from athletics-generated funds rather than public funds.

[Kathy]

What is your objection to athletic revenue going to fund athletic expenditures?

I live in an SEC community, and the money coming in from SEC television contracts and bowl game revenue will stay in the athletic department here, too. The new construction for athletic facilities upgrades at Mizzou will be funded by athletic department funds (which includes SEC revenue and booster donations). Indeed, the most compelling reason for MU jumping ship from the Big 12 to the SEC was the much more favorable revenue stream (all 14 members share equally in a much bigger money pie). Unlike the weenies' situation in California, MU's position as a public university means the athletic department must be self-supporting -- payback of construction debt must come from athletics-generated funds rather than public funds.

[Roberton3]

What is your objection to athletic revenue going to fund athletic expenditures?

I don't think it's unreasonable to ask that the athletic department provide some support for the university's educational mission.  But more importantly, "athletic revenue" often includes revenues that aren't really generated by athletics.  For example, the University of Texas counts all trademark licensing revenue (the cut they get any time someone buys anything with the Texas name or logo on it) as athletic revenue.  Much of the licensing revenue is genuinely athletics-related (a lot of people who buy UT shirts think of them as representing a football team, not a school), but certainly not all of it.  And that's just one of many ways in which the accounting is manipulated to make athletic revenues look higher and athletic expenses look lower. 

I've never taught at Tennessee, so I don't know that university as well.  But if they're using similarly deceptive accounting -- and I suspect they are -- then using "athletic revenue" only to cover "athletic expenses" really means that the rest of the university is subsidizing athletics.


(Edited to correct a typo.)

[Roberton3]

What is your objection to athletic revenue going to fund athletic expenditures?

I don't think it's unreasonable to ask that the athletic department provide some support for the university's educational mission.  But more importantly, "athletic revenue" often includes revenues that aren't really generated by athletics.  For example, the University of Texas counts all trademark licensing revenue (the cut they get any time someone buys anything with the Texas name or logo on it) as athletic revenue.  Much of the licensing revenue is genuinely athletics-related (a lot of people who buy UT shirts think of them as representing a football team, not a school), but certainly not all of it.  And that's just one of many ways in which the accounting is manipulated to make athletic revenues look higher and athletic expenses look lower. 

I've never taught at Tennessee, so I don't know that university as well.  But if they're using similarly deceptive accounting -- and I suspect they are -- then using "athletic revenue" only to cover "athletic expenses" really means that the rest of the university is subsidizing athletics.


(Edited to correct a typo.)

[M T]

I thought the guy that found & fed the goose with the golden eggs got some benefit from them.  If all the gold is fed back to the goose to make it fatter & heavier, plus feeding it all the raw resources the guy can find & buy, then there's little benefit in the whole purpose.    Of course, if he believes that having a big, fat goose will get him the attention of King Midas and he doesn't mind spending a lot of his time cleaning up the goose droppings instead of doing his regular work, then that's his choice.  He may even win the occasional prize at goose shows.

On the other hand, if the goose is sharing with the guy, allowing him to eat well & to build a better house versus a bigger goose pen, then I see a purpose to the enterprise.  I believe there are some such fortunate goose owners.

[M T]

I thought the guy that found & fed the goose with the golden eggs got some benefit from them.  If all the gold is fed back to the goose to make it fatter & heavier, plus feeding it all the raw resources the guy can find & buy, then there's little benefit in the whole purpose.    Of course, if he believes that having a big, fat goose will get him the attention of King Midas and he doesn't mind spending a lot of his time cleaning up the goose droppings instead of doing his regular work, then that's his choice.  He may even win the occasional prize at goose shows.

On the other hand, if the goose is sharing with the guy, allowing him to eat well & to build a better house versus a bigger goose pen, then I see a purpose to the enterprise.  I believe there are some such fortunate goose owners.

[jayasena]

[quote author=Kathy link=topic=7475.msg58269#msg58269 date=1359734314]
What is your objection to athletic revenue going to fund athletic expenditures?

I don't think it's unreasonable to ask that the athletic department provide some support for the university's educational mission.  But more importantly, "athletic revenue" often includes revenues that aren't really generated by athletics.  For example, the University of Texas counts all trademark licensing revenue (the cut they get any time someone buys anything with the Texas name or logo on it) as athletic revenue.  Much of the licensing revenue is genuinely athletics-related (a lot of people who buy UT shirts think of them as representing a football team, not a school), but certainly not all of it.  And that's just one of many ways in which the accounting is manipulated to make athletic revenues look higher and athletic expenses look lower. 

I've never taught at Tennessee, so I don't know that university as well.  But they're using similarly deceptive accounting -- and I suspect they are -- then using "athletic revenue" only to cover "athletic expenses" really means that the rest of the university is subsidizing athletics.
[/quote]

I'm definitely among those who buy logo apparel to represent the university and not just its athletic teams. I also agree that the athletics tail wags far too much of the university at many schools.

Having said that, isn't there also a flip side in this particular case though? For example, universities get quite a bit of publicity and exposure through athletics. I would think that's "free" in the sense that the AD doesn't charge the rest of the university any explicit fees for that. Athletics events are also likely a good way to build loyalty and keep alumni engaged which probably increases donations, including those that are not directed specifically to the AD. There are probably less direct benefits as well, like athletics events that benefit local businesses and build good will towards the university etc.

[jayasena]

[quote author=Kathy link=topic=7475.msg58269#msg58269 date=1359734314]
What is your objection to athletic revenue going to fund athletic expenditures?

I don't think it's unreasonable to ask that the athletic department provide some support for the university's educational mission.  But more importantly, "athletic revenue" often includes revenues that aren't really generated by athletics.  For example, the University of Texas counts all trademark licensing revenue (the cut they get any time someone buys anything with the Texas name or logo on it) as athletic revenue.  Much of the licensing revenue is genuinely athletics-related (a lot of people who buy UT shirts think of them as representing a football team, not a school), but certainly not all of it.  And that's just one of many ways in which the accounting is manipulated to make athletic revenues look higher and athletic expenses look lower. 

I've never taught at Tennessee, so I don't know that university as well.  But they're using similarly deceptive accounting -- and I suspect they are -- then using "athletic revenue" only to cover "athletic expenses" really means that the rest of the university is subsidizing athletics.
[/quote]

I'm definitely among those who buy logo apparel to represent the university and not just its athletic teams. I also agree that the athletics tail wags far too much of the university at many schools.

Having said that, isn't there also a flip side in this particular case though? For example, universities get quite a bit of publicity and exposure through athletics. I would think that's "free" in the sense that the AD doesn't charge the rest of the university any explicit fees for that. Athletics events are also likely a good way to build loyalty and keep alumni engaged which probably increases donations, including those that are not directed specifically to the AD. There are probably less direct benefits as well, like athletics events that benefit local businesses and build good will towards the university etc.

[82lsju]

It looks like they have been trying to bleed their fans by jacking up ticket prices. Ticket revenues are up.

you have to like their strategy of raising prices in years with 8 home games then holding that price the next year for 7 home games......

[82lsju]

It looks like they have been trying to bleed their fans by jacking up ticket prices. Ticket revenues are up.

you have to like their strategy of raising prices in years with 8 home games then holding that price the next year for 7 home games......

[CowboyIndian]

I thought the guy that found & fed the goose with the golden eggs got some benefit from them.  If all the gold is fed back to the goose to make it fatter & heavier, plus feeding it all the raw resources the guy can find & buy, then there's little benefit in the whole purpose.    Of course, if he believes that having a big, fat goose will get him the attention of King Midas and he doesn't mind spending a lot of his time cleaning up the goose droppings instead of doing his regular work, then that's his choice.  He may even win the occasional prize at goose shows.

On the other hand, if the goose is sharing with the guy, allowing him to eat well & to build a better house versus a bigger goose pen, then I see a purpose to the enterprise.  I believe there are some such fortunate goose owners.

Well, you beat the livin' bejeezus out of THAT metaphor!

[CowboyIndian]

I thought the guy that found & fed the goose with the golden eggs got some benefit from them.  If all the gold is fed back to the goose to make it fatter & heavier, plus feeding it all the raw resources the guy can find & buy, then there's little benefit in the whole purpose.    Of course, if he believes that having a big, fat goose will get him the attention of King Midas and he doesn't mind spending a lot of his time cleaning up the goose droppings instead of doing his regular work, then that's his choice.  He may even win the occasional prize at goose shows.

On the other hand, if the goose is sharing with the guy, allowing him to eat well & to build a better house versus a bigger goose pen, then I see a purpose to the enterprise.  I believe there are some such fortunate goose owners.

Well, you beat the livin' bejeezus out of THAT metaphor!

[yvonne]

I thought the guy that found & fed the goose with the golden eggs got some benefit from them.  If all the gold is fed back to the goose to make it fatter & heavier, plus feeding it all the raw resources the guy can find & buy, then there's little benefit in the whole purpose.

Well, how else are you going to get gold fois gras?

[yvonne]

I thought the guy that found & fed the goose with the golden eggs got some benefit from them.  If all the gold is fed back to the goose to make it fatter & heavier, plus feeding it all the raw resources the guy can find & buy, then there's little benefit in the whole purpose.

Well, how else are you going to get gold fois gras?

[terry]

Have you ever been to a park where geese congregate? Watch where you step . . .

[terry]

Have you ever been to a park where geese congregate? Watch where you step . . .

[fullmetal]

If you've been rowing for any significant amount of time, you'll know what annoyances ducks/geese leave on the docks for you in the mornings.

[fullmetal]

If you've been rowing for any significant amount of time, you'll know what annoyances ducks/geese leave on the docks for you in the mornings.