The numbers cited are only part of the story. The headline grabbing amounts of $229million and $13.3 million looks like GT is drowning in debt, but the reality is GT is no where near defaulting on debt payments.
The total owed on the facilities and other projects is $229 million, and the annual debt obligations on the total is $13.3 million (according to the article). What they leave out is the fact that facilities like our indoor practice facility and other projects are financed for the most part by commitments from generous donors like the Brocks (
http://patch.com/georgia/midtown/techs-new-football-facility-nears-completion). Also keep in mind, GT is also paid by TV/media contracts, which alone pay for the annual debt service. That's all not including ticket sales, merchandise, marketing agreements, etc. GT has been very good about allocating funds to cover future debt and contract commitments.
I get the gist of the article that schools feel the need to extend themselves to compete with each. The fact is, the athletic department is a business, as are other schools athletic departments. Like businesses from any other sector, everyone needs to invest in infrastructure, staff, and research to compete in their respective sectors.
I was going to make this point in my OG post. But when I looked at the stats that I was going to use to make my argument look legit, well, I realized it was 45 pages of financial analysis and I didn't care enough to dive into the rabbit hole. However, browsing the future outlook and numbers, I have concerns about GT's AA. I'm not even going to touch the debt payments for capital assets. See page 33 of the link in my OG post. It seems like those donations have essentially been used to pay off old debt, which is subsequently turned into new, larger debt, which in turn pays for the new facilities. I mean, that's American economics 101. I don't have the time or knowledge to say it won't work. It seems like GT knows what it's doing with it's debt service too. I trust them.
The larger problem, it seems, is that we are dependent on the fruit of this space race, i.e. our financial livelihood depends on the Clemsons since our entire future budget is projected on the assumption that TV revenue will continue to exponentially increase. Also, we assume that Students/Alumni will continue pitching in what $18 million a year + tickets (actually, the report hints that we need that number to go way up). Correction: this isn't a space race. In a space race, we'd actually invest the money into discovery, knowledge, things of future use. Lazy rivers and laser tag investments are prob better classified as a bubble/waste.
I love GT football and sports. I think it can and does create goodwill for the institute. I'm thankful for the players, coaches, and memories. But i can't deny that these numbers give me a sense that somewhere in this system we've built, someone's get paid major paper w/o providing their due return. That isn't only unjust, it's bad business.
2014-2015 Operating Revenue
Businesses Sources
$27 Million from ACC (TV)
$7 Million from advertisers (although it appears IMG gave GT the "Park Atlanta" deal)
$12 Million from customers (ticket sales)
Alumni & Student Donations/fees
$7 Million from Donors
$9 Million for "Contributions" (I think this means the money paid by club members?)
$5 Million from students (fees)
2014 - 2015 Operating Expenses
$24 Million in Salaries
$7 Million in Administrative expenses
$7 Million for Travel & Recruiting
$9 Million for player scholarships
$3 Million for other Events
600k for Equipment (PLEASE GOD DO NOT TELL ME WE PAY RUSSEL
ANY MONEY).
