gene taylor talks about virus impact ...

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Re: gene taylor talks about virus impact ...

Post by tmcats » April 2nd, 2020, 2:53 pm

i can read a financial statement. i spent a lifetime running businesses bigger than k-state athletics. and i've already commented on my view about the department's financials. $53 million of k-state's assets are cash or cash equivalents, i'm not talking stadiums or ball bats; ku's stands at $21 million. department salaries are $36 million; ku's $46 million.
Last edited by tmcats on April 2nd, 2020, 3:15 pm, edited 1 time in total.
Why is there something rather than nothing?

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Post by Hypeman » April 2nd, 2020, 3:15 pm

tmcats wrote:
April 2nd, 2020, 2:53 pm
i can read a financial statement. i spent a lifetime running businesses bigger than k-state athletics. I've already commented on my view of the department's financials. $53 million of k-state's assets are cash or cash equivalents.
So that $53 million minus the current obligations is working capital and that will have to cover about $100 million of expenses. Sounds like shit crick if we don’t have a mountain of donations to cover multi-million dollar salaries etc. If not, the campus will have to cover it, or perhaps you can write a personal check?

One other thought, is discussing the net assets relatively meaningless and misleading when most of the assets are stadium expansions and long-term? Would you agree? I don’t know how those things pay the bills?

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Post by tmcats » April 2nd, 2020, 3:17 pm

do you not understand the term 'cash'?

by the way, working capital is $27 million.
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Post by Hypeman » April 2nd, 2020, 9:13 pm

tmcats wrote:
April 2nd, 2020, 3:17 pm
do you not understand the term 'cash'?

by the way, working capital is $27 million.
Ok TM, let me spell out my concern more clearly.

You note that we have 255 mil in net assets. That’s essentially $27 million in working capital and $225ish mil in property improvements. You don’t pay the bills with improvements. Improvements are also valued on the financial statements at cost, which is why no one uses book value (or net assets on a non-profit statement) for decision making and it’s particularly misleading when most of the net assets are stadium improvements. Many a business go bankrupt with net assets, particularly if they are not producing income and can’t be liquidated.

We had approx 100 mil income last year and 90 mil expenses. If you have no football you lose nearly all of that income as it includes the TV deals, ticket sales and about 20 mil in annual donations used to keep operations afloat. So, how many of those 90 ‘million in expenses can be eliminated? You only have $27 million of working capital to pay them.

Surely maintenance costs will be saved, but are we going to can all the coaches and AD? Will their contracts allow them all to be furloughed next year? You noted that about $40 mil. is salary. That’s huge. Are we going to stop paying expenses for the athletes? No more scholarships? No housing? No meals? No stipends? There’s a lot of things that need to be cut to get expenses down to working capital of $27 million if no revenue is coming in.

Let me put it in more simple terms. Assume you buy a million dollar home but only have earnings to afford to make the payments on a 100K home. Your net assets might look the same, but you can’t make the house payment. It’s a house of cards.

Did you say you ran a large business and taught business classes?

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Post by Hypeman » April 2nd, 2020, 9:21 pm

Let me add one more thing. Taylor likely reacted in the media because he’s smart enough to know it’s a house of cards and is pissed someone pointed it out.

Someone’s going to have to bail athletics out if they have to play by the same rules as the rest of the world.. It’s either going to be the taxpayers or donors. I know where my charitable contributions are going ... to the Red Cross or Salvation Army or something worthy. Not to pay someone’s multimillion dollar salary.

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Post by tmcats » April 3rd, 2020, 9:37 am

tmcats wrote:
April 2nd, 2020, 2:36 pm
the athletics department is no different, it seems to me, than any other commercial enterprise. if there's no revenue from tickets, donations, tv contracts, royalties and the like, then it will have to shutter for a time. coaches and others will have to be furloughed. it all depends on football, for sure.

presently, or at least as of june 2019, k-state has $44 million in cash as a buffer. ku reports less than half that in the bank. i imagine other schools are similar - few stronger than k-state, most weaker financially. but that's about all we know from financial statements.

yes, no football means a very rough landing for the department but not as bad as most other schools, i'd guess, and certainly no different than other sports-related commercial activities like the nba and nfl.
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Post by Hypeman » April 3rd, 2020, 6:30 pm

tmcats wrote:
April 3rd, 2020, 9:37 am
tmcats wrote:
April 2nd, 2020, 2:36 pm
the athletics department is no different, it seems to me, than any other commercial enterprise. if there's no revenue from tickets, donations, tv contracts, royalties and the like, then it will have to shutter for a time. coaches and others will have to be furloughed. it all depends on football, for sure.

presently, or at least as of june 2019, k-state has $44 million in cash as a buffer. ku reports less than half that in the bank. i imagine other schools are similar - few stronger than k-state, most weaker financially. but that's about all we know from financial statements.

yes, no football means a very rough landing for the department but not as bad as most other schools, i'd guess, and certainly no different than other sports-related commercial activities like the nba and nfl.
No response, no surprise.

Now that I’ve explained the intricacies of “net assets”, let me explain how you have painted a very misleading picture of KSU’s financial position relative to KU’s. I took a quick look at KU’s financials and KU has about $100 million in working capital vs. $27 million at KSU. They indeed have larger expenses, particularly with more sports, but they are clearly more liquid and have a stronger balance sheet since all the net assets aren’t wrapped up in fixed assets. They are available for use.

We may be in better shape than some schools, I don’t really know, but not KU, unless we can sell the stadium and I don’t think that’s possible.

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Post by tmcats » April 3rd, 2020, 8:21 pm

hypeman, you've explained nothing except how to reword what others have already written. additionally, you clearly don't understand basic balance sheet concepts as shown by this statement:

You note that we have 255 mil in net assets. That’s essentially $27 million in working capital and $225ish mil in property improvements.

no, it's not. the elements below copied from the k-state athletics department balance sheet are not fixed property improvements. furthermore, working capital has nothing whatsoever to do with the calculation of net assets.

Current Assets
Cash $ 44,761 ,619
Tickets receivable 6,694
Accounts receivable 20,670
Pledges receivable, net of allowance 4,510,257
Investments held by KSU Foundation \ 3,329,358
Prepaid expenses 10,457
Total Current Assets 52,639,055

now, why don't go talk recruiting or something where facts don't matter? you might find more success there.
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Post by Hypeman » April 3rd, 2020, 11:24 pm

tmcats wrote:
April 3rd, 2020, 8:21 pm
hypeman, you've explained nothing except how to reword what others have already written. additionally, you clearly don't understand basic balance sheet concepts as shown by this statement:

You note that we have 255 mil in net assets. That’s essentially $27 million in working capital and $225ish mil in property improvements.

no, it's not. the elements below copied from the k-state athletics department balance sheet are not fixed property improvements. furthermore, working capital has nothing whatsoever to do with the calculation of net assets.

Current Assets
Cash $ 44,761 ,619
Tickets receivable 6,694
Accounts receivable 20,670
Pledges receivable, net of allowance 4,510,257
Investments held by KSU Foundation \ 3,329,358
Prepaid expenses 10,457
Total Current Assets 52,639,055

now, why don't go talk recruiting or something where facts don't matter? you might find more success there.
You note that we have 255 mil in net assets. That’s essentially $27 million in working capital and $225ish mil in property improvements.

no, it's not”

Uh ... yes it is.

“ furthermore, working capital has nothing whatsoever to do with the calculation of net assets.”

Uh ... yes it does.

Your comments are making you look foolish so I’d stop while you’re ahead. There’s not enough space here for me to give you a lesson on finance, but I hope you take a class on how to read a financial statement yourself before you teach any more business classes at KSU and I hope I don’t have to hire any KSU business grads if you’re teaching them accounting and finance.

Now, you asked earlier if I didn’t understand what cash is? Do you not understand what current liabilities are? $25,299,899. That’s taken directly from the financial statement you are referencing.

You forget to deduct those current liabilities from current assets to get a picture of working capital and solvency. Unless you are already assuming we are broke and those liabilities won’t get paid? To my knowledge KSU athletics hasn’t filed for bankruptcy protection.

As such, they have $27 million in working capital to work with (you said so yourself several posts back), which might be good for an athletic department, I have no idea, but it pales in comparison to the pile of capital they have down the road. In fact they have nearly 4 times more working capital available.

now, why don't go try to mislead everyone about recruiting or something where facts don't matter? you might find a little more success there.

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Post by Hypeman » April 4th, 2020, 7:54 am

Here’s a nice short course on how to read a balance sheet.

https://courses.lumenlearning.com/bound ... nce-sheet/

Here is a nice article that will help you learn why net assets is not a good measure for evaluating financial health and/or worth.

https://www.google.com/amp/s/blog.mint. ... 92010/amp/

It’s understandable that one wouldn’t understand the nuances of financial data as it can be a little complicated, but chiding those that disagree with the misleading financial assessment being sold here is not cool.

It also shocks me that our business school has faculty that don’t know the basics of reading financial information.

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