Georgia Athletics to post another $20 million excess

Proposed New Butts-Mehre Accessory

With the global financial markets wildly out of whack and unemployment on the rise, Americans are cutting back across the board. This is most certainly the "rainy day" that our grandparents warned us to save for. Apparently the Athletic Department has one big ass umbrella, as our cash reserves will exceed $60 million at the end of this fiscal year according to the Athens Banner Herald. (Image: A Cool Friday)

That's almost enough cash on hand to go an entire year without selling a single ticket. If you're a Hartman Donor, the above link is a must read.

My Reaction:

• According to the article, the Athletic Department is giving back $2 million per year to the University for academic endeavors. Given the AD's financial position and the struggling financials of the University, that's a no brainer politically and fiscally.
  
  
• How in the world does the Butts-Mehre Expansion cost $40 million? A year ago it was projected to cost $34 million. I thought the price of construction projects had fallen over the past year as vendors became more desperate for work? (Note: That facility will be a big time boost in recruiting. Particularly the rehabilitation areas for injured players. More on that later.)
  
  
• I like that we have enough cash on hand to go a year without selling tickets. In this economy, that beats the pants off the finances of most athletic departments. It means we can invest when everyone else is cutting back. Damon needs to leverage our strength to pull an Old Man Potter:

  "Can't you understand what's happening here? Don't you see what's happening? Potter isn't selling. Potter's buying! And why? Because we're panicky and he's not. That's why. He's picking up some bargains." - George Bailey

  Too bad we can't (legally) use some of that money to buy some kick ass pass rushing defensive ends. Or illicit payola style kickbacks for bloggers.
  
  
• How on earth did our debt ever get to $200 million. Holy crap. I'm glad to see it's back down to $100 million or so. But damn, how did it ever get so far ahead of profit?
  
  
• All of these financial projections are before ESPN/CBS's incremental new $10+ million per year clears in roughly June '10. Once we start getting that additional financial boost, we need to (A) stroke a big ass check for Stegeman renovations (B) work the debt off a lot faster and (C) start giving a lot more than $2 million to academics.

I'm proud of Georgia's financial strength. I certainly prefer our situation where we control our financial destiny vs. Georgia Tech's situation where they can't fire an obviously incompetent basketball coach because his buyout is too large.

HOWEVER, I would not be supportive of price hikes in any sport given the broader economy and our overall financial position. None are planned that I'm aware of. Just saying.

By the way -- compare all of this to our academic giving. The NACUBO giving report for 2008 is out (warning large boring PDF), and UGA Academics continue to show unimpressive endowment growth*. Even counting the Arch Foundation giving, we continue to slip behind our academic peers financially. (ht - Inside the Sprawl)

Your reaction?

See Also:
-- Tech's bang for the buck - Get the Picture

PWD


* He said endowment. Chuckle.