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Tenneessee in deep debt.

Discussion in 'Colorado Football Message Board' started by NashBuff, Aug 28, 2012.

  1. NashBuff

    NashBuff CSU Knob-Slobberer

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    http://sportsillustrated.cnn.com/20...ic-budget-deficit.ap/index.html?sct=cf_t2_a11

    That school is $200 million in debt from construction related activities. Plus like CU, they get a lot of athletes from out of state so they pay one of the highest scholarship bills to the school.

    Could this explain why our AD and adminstration seems to be too careful these days?
     
  2. BuffNut99

    BuffNut99 Club Member Club Member

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    They spend 4x+ more than we do on recruiting.
     
  3. Buffenuf

    Buffenuf massive tool

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    THEY NEED TO !!! Would you live in Knoxville and attend a third-rate university otherwise?
     
  4. SuperD

    SuperD Club Member Club Member

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    What is ridiculous is they are still running that deficit despite the fact that they have over $100 million in AD revenues. Sorry but that is straight up bad management. If you can't compete with more than $100 million in revenues I don't know what to say to you.
     
  5. skibum

    skibum Peed in your Cheerios. Club Member

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    :yeahthat:
    That is the one thing that Bohn has done rather well is manage the finances of it. I also suspect that may be part of unwillingness to take on debt - we are currently at an advantage with a lot of our PAC-12 peers in that we don't get much in subsidy from the rest of the campus (even then, if I remember right, there's a bit of a quid-pro-quo going on: the AD gets some subsidies, and the students get better seating at both FB & BB than they otherwise would). Which means that as PAC-12 revenue distributions go up, a lot of our conference rivals aren't going to be increasing the overall AD budget: they're going to be reducing the subsidies they get from the rest of campus.

    The CU AD, on the other hand, once it gets clear of the temporary debt overhang (D2 Buyout & reduced B12 payouts), is actually going to have its budget increased by those revenues. Given the peer group, and looking around at other conferences, I am betting that carrying really low debt levels going forward looks very attractive to the administration at the moment...
     
  6. GoBeers

    GoBeers Club Member Club Member

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    I don't think it's as bad as it sounds, but they definitely shouldn't be running deficits with a $100+ million on the revenue side. That said, it takes planning to meet any target as costs are mostly fixed and revenues are variable, especially donations/ ticket sales. the question is whether this was one bad year, or many in a row.

    As for the $200 million in debt, I would guess that any athletic department doing upgrades would issue a bond for the amount and pay it off from future revenue. Not sure when UT would of done the bonds but right now it something like $11-12 million per year over 30 years for a $200 million bond at the current ridiculously low interest rates. That is nothing a school with a $100 million budget can't handle or plan for.

    When it comes to CU being careful, the main question I hope they are looking at is whether the current level of TV revenue and Playoff/bowl revenue can be sustained after the current TV contract and does a 30 year bond make sense or should it be 10-15 years or whatever. UW and Cal have already issued $200+ million in bonds each I believe, and lots of BCS schools are doing smaller $60-100 million upgrades with new TV money.

    One downside to going out 30 years (Cal actually did a 40 year bond) is who knows if football will even be popular, or if liability issues will cause major problems for the NFL and also cause high schools and universities to have problems getting insurance. The model of cable TV could also be gone as people are cutting the cord left and right to avoid $100+/month cable bills.
     
    Last edited: Aug 28, 2012

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