i'm always interested in the financial side of athletics

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tmcats
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i'm always interested in the financial side of athletics

Post by tmcats » June 17th, 2019, 2:40 pm

and, certainly, ku's perks the curiosity genes. anyway, it looks like their expenses continue to escalate with football changes. adidas money, what can we add? and they're starting over with memorial stadium renovation plans. the former a.d. had a stadium plan in place that sort of died when he left.

Kansas Athletics added nearly $8 million to its 2019 fiscal year budget after proposing the change at a board meeting Thursday, with almost all of that money needed to cover football expenses.

KU’s original approved budget for financial year 2019 — that runs July 1, 2018 through June 30, 2019 — was for just more than $99 million. That was bumped to north of $107 million Thursday, with KU Athletics chief financial officer Pat Kaufman saying that a majority of the extra spending was related to one-time football transition costs and also coaching staff additions.

The amended 2019 budget added $5.1 million in “transition” expenditures — money reserved to pay off previous football coaching staff members following last year’s firing of David Beaty and the hiring of Les Miles.

“We worked our way through that, and we were prepared to handle that,” KU athletic director Jeff Long told The Star after the meeting about that $5.1 million figure. “Obviously you have to make that judgment before you make a change in staff, that you have the resources to manage that, and we do.”

One matter that remains unresolved, though, is Beaty’s buyout. The former coach filed suit against KU in March, alleging that the school sought to concoct a reason to fire him for cause to avoid a $3 million payout. That lawsuit is still pending, with KU asking a federal judge to dismiss it two weeks ago.

KU also budgeted $2.5 million more for “salaries and benefits,” raising that number from around $31.1 million to $33.6 million.

Long said the bump there also was related to football.

“That’s the quality of coaches we’ve hired for assistants,” Long said. “We created a larger pool of money for Coach Miles to hire assistants. That was really one of the things he and I talked about in the interview process. From my standpoint, Coach Miles could have sought more for himself, but he was more concerned about making sure he had a pool of salaries to hire a quality staff.”

KU Athletics’ plan to cover the $8 million deficit will be with an increase in contributions. After originally budgeting that number at $20.2 million for 2019, KU’s new budget listed the amount at $28.49 million — an improvement of more than $8 million.

Kaufman said excitement from a recent Final Four run in men’s basketball and an understanding from fans that money was needed for football as reasons for the increase.

Long also said after the meeting some of the added donations total could be attributed to KU’s recent “Break The Cycle” campaign for football. He said, previously, the athletic department had not done specific fund-raising efforts for a single sport.

“We had great success on the front end,” Long said. “A number of donors chose to make those contributions on the front end, and we may spread them out over time.”

Long said that KU had about $12 million raised for its goal of $25 million for the Break The Cycle campaign, with another four years remaining to hit that mark.

KU Athletics also had its preliminary 2020 budget approved — one that will contain quite a few changes from 2019.

For one, expenses in the 2020 budget drop from $107,192,000 to $106,191,000. KU is set to have its $5.1 million in transition costs to come off the books then, yet it also is planning on paying $1.2 million more in coaches’ salaries — partly the result of a full year with the new football staff in place with its higher pay.

KU also will get a windfall with its Adidas contract extension, receiving $11 million in 2020 as compared to $4.3 million in 2019. However, KU is also budgeting for a significant stepback with contributions, planning on $22.7 million in 2020 compared to $28.5 million in 2019 — a decrease of almost $5.8 million.

Long said he didn’t have big-picture concerns about the falloff in contributions in 2020 after KU raised a higher number in 2019 following the football coaching change.

“We planned for that,” Long said. “And again, we’re always very conservative in those fundraising numbers, so we actually expect to exceed those numbers that you see in the budget.”

Long anticipated that a $106 million budget would be about what KU Athletics would need moving forward. Kaufman said during the meeting that the department estimated a 2% to 3% budget increase each year simply based on inflation.

“I think that’s the kind of budget we need to be competitive in this league while we maintain the strength of our basketball program and we build our football program,” Long said. “It’s clear that we have to invest in our football program if we expect to be better than one or two wins a year as we’ve done over the last few years.”

During the meeting, KU chancellor Douglas Girod asked how KU stacked up compared to its Big 12 peers in football resources after earmarking additional funds there this year. Long reported that KU was middle of the pack when it came to football staff size, while still in the lower half in terms of overall football expenses.

“It is a battle to keep pace,” Long said during the meeting. “But I always say we don’t need the most money. We don’t have to be in the top. We’ve got to be in a zone that’s striking the competitive zone.”

Long said afterward that the additional money for football was part of a long-term plan that was needed for the health of the athletic department.

“We have to invest. I know sometimes that’s difficult for our fans, because they feel like they’ve been patient, but really, when you compare us to our competitors, we have to invest in that program to expect different results,” Long said. “We are investing, and that’s going to be a process as well, but we’re going to have the resources for Coach Miles to build this program.

“We’ll see the benefits of that investment in the future. We’ll have a return on that investment.”

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Kansas Athletics to develop a facilities master plan

Long reported to the board that Kansas Athletics will soon meet with four consultant organizations that are vying to be selected to help the department develop a facilities master plan.

The purpose of the master plan is to give the department a guiding reference to construct new facilities and renovate current facilities over the next 15 to 20 years, Long said. It will also help the department with its planned $300 million renovation to David Booth Kansas Memorial Stadium, which is expected to begin in the next few years.

Through the plan, Kansas Athletics will look into what fans want out of the stadium, what they are willing to pay to use those amenities, and how the department is going to raise money to fund those renovations. Long said the plan could also look into finding new ways to use the stadium for more than just football games in the fall.

“I think the most important part is helping us decide what does our stadium need to be looking forward ... and trying to find ways the stadium can be used more than six or seven times a year,” he said. “It needs to be a facility that accommodates many events and many other options. We need to be willing to look outside of the box in ways we are utilizing the stadium when we are not playing football.”

Long said he anticipates developing the plan will take about a year.
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Post by ArKSU » June 18th, 2019, 12:28 pm

WTH are you doing talking about UK feetball?
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Post by ToledoCat#2 » June 18th, 2019, 7:04 pm

Hope it's all $$$ poorly spend and they dwell in the basement forever.

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Post by wazucat » June 18th, 2019, 7:13 pm

I find it curious and always have - that KU has so much greater revenue than KSU. I get the BB programs are much different revenue bases but that does not come close to accounting for the disparity -- especially when one considers that football is the biggest revenue producer and consumer and their football program is a black hole.

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Post by MNwildcat » June 18th, 2019, 9:05 pm

Revenue is one part of cash flow. KU has more revenue than KSU by about $9Mm, but expenses for KU were higher than KSU by $21MM. So, KSU had a larger net cash flow of about $12MM than KU. It’s nice that KU has more revenue, but they don’t manage it very well.

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Post by Kid In the Hall » June 18th, 2019, 9:28 pm

KU (like most universities) continues to receive in funds from its students by way of mandatory student fees, something K-State phased out several years ago.

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Post by tmcats » June 19th, 2019, 5:20 pm

it's hard to make a comparison but ku hoops dwarf both their football and, obviously, our basketball in revenue. that's the big disparity between the two programs. ku is $100 million plus in revenue. k-state is presently approaching that number if all revenue sources are included. the schools account differently. k-state reported $96.9 million in revenue and support last accounting cycle. but yes, what's important is the margin between revenue and expense. ku is presently losing money. while k-state had a positive carryover of ~$4 million. here are some numbers published by the lawrence paper recently.

Men's basketball ticket sales 2017
Kansas: $15.1 million
Kansas State: $3.01 million
Missouri: $3.03 million

Football ticket sales 2017
Kansas: $3.4 million
Kansas State: $11.8 million
Missouri: $11 million
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