Spring Break
Athletics profit as Univ. faces cuts
Budgets stay separate
GREG WILSON
Issue date: 10/8/08 Section: News
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Athletics are a big business - the Association expects to rake in between $76 million and $80 million this year, said Frank Crumley, executive associate athletic director for finance and business.
The Athletic Association has grown quickly in recent years - between financial years 2003 and 2009 the association's budget grew three times as fast the University's. The University's budget grew by 23.8 percent, while the association's grew by 62.4 percent.
The University and athletic budgets are separate, with the association able to spend as much as it earns. Despite University-wide budget trimming, the athletic department is not actively cutting its budget, Crumley said.
"If you ask anyone in the Athletic Association, we are always mindful of spending. We have not asked them to cut their budget, but we are mindful of what the University and state is going through," Crumley said.
Athletic Director Damon Evans implemented many fiscally responsible steps since he came on board as an assistant athletic director in 1998, including zero-base budgeting. In zero-base budgeting, each team and unit must justify their costs for the following budget years, Crumley said.
Though the University does not receive any of the profits from the Association, the Athletic Association does support the University.
"The athletic director always wants to support the University," Crumley said. "Since Damon Evans, in his first year he committed $2 million to professorships, $500,000 each year over a four year period."
The Athletic Association also contributed $1 million last year to the president's venture fund to be used at the direction of University President Michael Adams.
In September, Adams allocated $200,000 from the venture funds to pay for faculty travel. These travel funds are allocated by Provost Arnett Mace.
The Athletic Association also stands to earn a significant amount of money from the new television deal between CBS and the Southeastern Conference, which gives CBS first choice on broadcast rights to SEC football games and broadcast rights to other SEC sports for the next 15 years. Adams said the terms will be discussed at the October SEC presidents' meeting.
"They [the Athletic Association] have been very cooperative with the University as a whole," Adams said. "I think we will see a good proposal there."
Though the University has 21 men's and women's sports, only a few are profitable.
Football is the most profitable sport by far, with $16.35 million in ticket sales expected this year and $25 million in contributions for ticket points through the William C. Hartman Jr. fund.
The second most profitable sport is men's basketball which is expected to earn $750,000 in ticket sales and another $400,000 through the Georgia basketball enhancement fund.
The financial success of the football team allows the Association to support other teams that lose money. Men's tennis earned a national championship this year but lost hundreds of thousands of dollars. In 2007, men's tennis earned $23,819 and spent $393,989 - a loss of $370,170.
Revenue stems from ticket sales, contributions, royalties and conference distributions.
"Ticket sales on average [for football bowl subdivision teams, formally known as Division 1-A] account for 28 percent of revenue and contributions account for 31 percent," said Daniel Fulks, a professor at Transylvania University and research consultant for the NCAA.
One key to the University's continued financial success is support from its more than 250,000 living alumni.
"Georgia has a long history of booster support," Fulks said. "Except for Tech, you don't have any other large institutions in the state."
Athletics can be a money losing venture at most schools, but not at the University.
"Only 19 programs in the Football Bowls Subdivision show a profit," Fulks said. "That is 17 percent of the teams. The average profit is $4.3 million."
Average loss is $8.9 million.
The past few years, the University's association has been able to put a significant sum into a reserve fund. The Association has about $50 million and Crumley estimates that 75 percent of that was put in since Evans took over.
The Association will spend $24.36 million in direct support for teams at the University. These cover expenses such as coaches' salaries, travel, meals and recruiting expenses.
Nearly half that sum - 47 percent - is spent to support the football team. Men's and women's basketball come in a far second and third place with 13 and 9 percent, respectively.
Athletes also receive support in other areas such as academics - $1.8 million is spent to tutor athletes and keep them academically eligible. Scholarships account for a large portion of indirect support for athletics as $8.3 million will be spent on scholarships.
On average, FBS schools spent $65,800 per athlete in 2006, according to a NCAA Revenues and Expenses report. The latest year data is not yet available. In 2006, the University spent $115,000 per athlete, according to an Equity in Athletics Disclosure report.
"The amount of money we put toward student athletes is important to success in the classroom and on the playing field," Crumley said. "I'm not sure there is a correlation to dollars, but the money is there to support them. We supply the things that student athletes need to succeed."
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