GTAA Debt and Finances

[BeeRBee]

There has been a lot of discussion in various threads about GTAA finances, and in particular the outstanding debt and the payments due in the near future. Some of this is based on outdated data, and rather than try to respond in multiple places I thought I'd start a new thread specifically on that topic to update this information. I have some additional thoughts which will have to wait on a deeper dive.

There was an article from From the Rumble Seat linked which included the following table:

The article was from May 2020, and this table is from the FY 2019 Financial Statements, which was the most current at the time. (To be fair, it appears to still be the most current available on the GT Finance web site.) However, in October 2019 there was a new bond series issued (technically 2) which refinanced the two bullet payments due in 2020 and 2023 which largely drove the $30 million plus principal amounts and also refinanced additional portions of the existing debt. This issue also provided $10 million new financing for maintenance construction at Bobby Dodd, and $10 million for renovation of Russ Chandler.

The equivalent table from the 2021 Financial Statements, reflecting June 30, 2021 conditions is as follows:

In addition, a $52 million bond series was issued in February 2022, which refunded additional amounts of the bonds issued in 2012, and refinanced some bank loans used to construct the golf practice facility and the ACC network facilities, as well as a small note due to the Alumni Association for construction of the Wardlaw building and Student Success center. There is only $1 million of new financing from this series which will be used for updates at the Coliseum Annex, which is the locker rooms and training facilities.

I'm not sure what the net affect of this refinancing will be on the short term cash flow requirements, but my thinking is that the required principal payments at least will be somewhat lower in the next 5 years.

I do have some thoughts gleaned from the notes to the financial statements about the overall effect of the debt, but as I said above that will wait on a deeper dive.

 

[roadkill]

There has been a lot of discussion in various threads about GTAA finances, and in particular the outstanding debt and the payments due in the near future. Some of this is based on outdated data, and rather than try to respond in multiple places I thought I'd start a new thread specifically on that topic to update this information. I have some additional thoughts which will have to wait on a deeper dive.

There was an article from From the Rumble Seat linked which included the following table:

View attachment 13136​

The article was from May 2020, and this table is from the FY 2019 Financial Statements, which was the most current at the time. (To be fair, it appears to still be the most current available on the GT Finance web site.) However, in October 2019 there was a new bond series issued (technically 2) which refinanced the two bullet payments due in 2020 and 2023 which largely drove the $30 million plus principal amounts and also refinanced additional portions of the existing debt. This issue also provided $10 million new financing for maintenance construction at Bobby Dodd, and $10 million for renovation of Russ Chandler.

The equivalent table from the 2021 Financial Statements, reflecting June 30, 2021 conditions is as follows:

View attachment 13137​

In addition, a $52 million bond series was issued in February 2022, which refunded additional amounts of the bonds issued in 2012, and refinanced some bank loans used to construct the golf practice facility and the ACC network facilities, as well as a small note due to the Alumni Association for construction of the Wardlaw building and Student Success center. There is only $1 million of new financing from this series which will be used for updates at the Coliseum Annex, which is the locker rooms and training facilities.

I'm not sure what the net affect of this refinancing will be on the short term cash flow requirements, but my thinking is that the required principal payments at least will be somewhat lower in the next 5 years.

I do have some thoughts gleaned from the notes to the financial statements about the overall effect of the debt, but as I said above that will wait on a deeper dive.

Thanks for this information. There was a sentiment expressed in other threads that we were only making interest payments on our debt, however, this does not appear to be the case. Of course, on long-term notes it's expected that interest will dominate early on.

 

[iceeater1969]

Debt free in 50.

I see the payment schedule.
Do we have revenue STREAMS showing we have positive cash flow to make these payments?

 

[GT33]

Debt free in 50.

I see the payment schedule.
Do we have revenue STREAMS showing we have positive cash flow to make these payments?

I'm not why but in 2019 timeframe financial information in the way I was accustomed to seeing it every year started becoming impossible to find. No this isn't Collins fault, I just have not met or talked to anyone that could explain why that was.

 

[tsrich]

This looks worse than it did in the mid 2000s when we initially incurred the debt.

 

[BuzzDraft]

Money people at tech are the boosters, most famously Gregg Garrett, is the one trying to make everything happen quickly in terms of a buyout and firing of Collins. Gregg wanted to fire Collins at the end of last year but not everyone was on board. Zelnak and Garrett hold the most power in the coaching search currently, that’s because Stansbury won’t be an apart of this coaching search.

Oh please, tell me the current AD won't be a part of the search because he is being relieved.

As for the FUD being spread about losing the current AD's alleged fundraising prowess, let me remind that donations for capital improvements are much easier to secure over operational costs (coaches' salaries and buyouts) since it results in something tangible and permanent, where names can get etched on buildings. Any AD worth oxygen can raise the same amount in a capital campaign, especially if they've been provided with such an attractive project to sell to donors. I don't see any exceptionalism in the current AD, and he didn't conceptualize it, or design it. The donors aren't giving because the AD is some gifted or inspirational salesman (he's Alfred E. Neuman without the sense of humor), they're giving because the project is so attractive and has long term value for Tech, unlike funding the black hole vacuum for the current AD's really poor decisions and lack of leadership..

 

[GT33]

Everyone should be aware that late last year when the interest rates were down, we were supposedly refinancing a large portion of our debt to take advantage of the lower rates. I have no confirmation this got executed, but they were in the home stretch and it should have gotten inked.

 

[Lavoisier]

The “surrounding him with million dollar coordinators” thing really underestimates the market. We’re paying Chip Long $1.65/2 years. South Carolina pays their DC, a guy named Clayton White, $1.1million. Michigan State pays their TE coach $900k. A million bucks gets you adequate coordinators these days, maybe. The model really only works if you are able to shoot for the $1.5-$2 range these days which we don’t have. We’re in this mess because of how broke we are.

 

[iceeater1969]

Kinght Data for NCAA athletic $
DEBT
2010 Clem 31$m , Gt 123$m, ncst 37$m, Vt 67$m.

2014 Clem23$m, Gt 228$m, ncst 41$m, Vt 53$m

2021 Clem 125$m, Gt 269$m, ncst 30$m, Vt 99m.

In past i have done this in for overall revenue and for DONATIONS+ Ticket Sales .

GT. Donations and Ticket sales are bottom and flat as others show increase and great inceease.

OTHER REVENUE from acc ( etc) hide the falling behind.

That's not the coaches.
It's also above the day to day responsibility of the AD. The guys with the furniture and carpet are totally responsible

 

[Jerry the Jacket]

The continuous poor-mouthing by our fanbase is not a good look. I think Georgia Tech is fully capable of handling its finances.

 

[RonJohn]

Bringing us up to par with our peers in assistants' salaries would require just a small fraction of the money donated to these funds to be donated instead toward them. Just a small fraction:

Georgia Tech

It would be much better to raise money for assistant coaches' salaries. The AT Fund letter that we received this week appears to be asking for that.

Diverting specifically donated money wouldn't be ethical, and it might not be legal. If someone donated money expressly for volleyball and that money was instead used to pay for football assistant coaches, the donors would rightly be very upset. I think AI2020 was successful because it highlighted exactly what the funds would be used for. You might help football out right now, but would greatly hurt the chances of having another successful drive like AI2020 was.

 

[GT33]

Found some info on slide 9. Wow, we’re spending about $15M more a year than 2018. Also, our debt service is down about $750k so we must have refinanced.

https://www.budgets.gatech.edu/File?F=MSFAC%2F23MSFAC%20AthleticAssoc-Presentation%28FY23%29.pdf

 

[bobongo]

It would be much better to raise money for assistant coaches' salaries. The AT Fund letter that we received this week appears to be asking for that.

Diverting specifically donated money wouldn't be ethical, and it might not be legal. If someone donated money expressly for volleyball and that money was instead used to pay for football assistant coaches, the donors would rightly be very upset. I think AI2020 was successful because it highlighted exactly what the funds would be used for. You might help football out right now, but would greatly hurt the chances of having another successful drive like AI2020 was.

I'm not saying funds should be diverted. Yes, it would be detrimental to future fund raising as well as unethical. I'm saying there should be a little more focus of both the AD and the donors on a fund devoted to coaches' salaries (and recruiting budgets). Yes, TStan is doing that now. He should have been doing it all along.

The money is there, if it were just directed toward the right place.

 

[SOWEGA Jacket]

The continuous poor-mouthing by our fanbase is not a good look. I think Georgia Tech is fully capable of handling its finances.

A good look? To whom? No one outside of about 100 diehard fans give one flip about any of this. We can ”poor mouth” all we want because no one is listening or reading. And you really think GT is capable of handling finances? I believe the exact opposite. I have seen nothing in years that indicates GT is financially savvy at all.

 

[Lavoisier]

I agree we should have a ton of money for assistants, NIL, facilities, support staff etc. But we can’t make it happen, we really have never shown we can. Even now we seem to be arguing about affordability of a buyout. The McGee/Arkansas/Clemson model is wishful thinking in the current state of GT athletics.

 

[iceeater1969]

The continuous poor-mouthing by our fanbase is not a good look. I think Georgia Tech is fully capable of handling its finances.

Sorry the sad truth is we haven't.
Numbers dont lie.

 

[Augusta_Jacket]

Yes, TStan is doing that now. He should have been doing it all along.

To this point, there was some money earmarked in AI 2020 for GTAA operations, of which a sizable portion is likely to go to football. $37 million was pledged to Football operations, and some of the money was in an Athletic Directors initiative, which will give the AD some discretionary funds to help handle situations as they arise. This was put into place in 2018/2019 when the planning began, so in effect, he was doing it all along. What was not foreseen in 2018 when we kicked this off was A) CPJ retiring so soon, and B) the replacement needing to replaced so soon. As pledged funds are finalized we should be in better position moving forward, but this is almost a perfect storm of bad timing for us.

 

[bobongo]

To this point, there was some money earmarked in AI 2020 for GTAA operations, of which a sizable portion is likely to go to football. $37 million was pledged to Football operations, and some of the money was in an Athletic Directors initiative, which will give the AD some discretionary funds to help handle situations as they arise. This was put into place in 2018/2019 when the planning began, so in effect, he was doing it all along. What was not foreseen in 2018 when we kicked this off was A) CPJ retiring so soon, and B) the replacement needing to replaced so soon. As pledged funds are finalized we should be in better position moving forward, but this is almost a perfect storm of bad timing for us.

Good to know he was trying to look ahead. Too bad he got caught by circumstances (well, largely of his own doing by his HC hire). I was just trying to wrap my head around how Tech is spending $70 million for a new Edge Center but can't afford coaches' salaries in line with our peers/adversaries. Priorities seem a little out of kilter.

 

[Augusta_Jacket]

Good to know he was trying to look ahead. Too bad he got caught by circumstances (well, largely of his own doing by his HC hire). I was just trying to wrap my head around how Tech is spending $70 million for a new Edge Center but can't afford coaches' salaries in line with our peers/adversaries. Priorities seem a little out of kilter.

It's a good question. Arguably, our current spending does seem out of line with needs, but remember, this was all planned and organized in 2017-2018 when the landscape of college football was vastly different. At the time, facilities was a primary driver for recruiting, and our were woefully out of date. When the fundraising got going, we were still operating under that paradigm. No one really foresaw the drastic change that would come almost overnight when the NIL and transfer portal changes were implemented. Ironically for us, these changes occurred right as we were wrapping up a major fundraising push mostly centered around facilities.

It's hard to blame TStan for the finances. He's been doing his level best in that arena since he got here. We can all agree, hindsight being 20/20, that CGC has not worked out so far and is likely not going to be here much longer, and that IS on TStan. We can differ in opinion on the contract, but I can at least understand why that term was offered. The real issue for me is how we move forward. That's what I am most focused on right now.

 

[00Burdell]

It's hard to blame TStan for the finances. He's been doing his level best in that arena since he got here. We can all agree, hindsight being 20/20, that CGC has not worked out so far and is likely not going to be here much longer, and that IS on TStan. We can differ in opinion on the contract, but I can at least understand why that term was offered. The real issue for me is how we move forward. That's what I am most focused on right now.

We are not in agreement on this point. Collins was not a proven comoddity when we hired him and he deserved no such financial security as Todd agreed to with the absurd buyout table.

Stan caved to Collins agent and allowed his confidence that Collins was a can’t miss hire to overlook the insane buyout terms Collins agent pushed down Stansbury’s throat.

And its time we all acknowledge that Stansbury isn’t the one who picked Collins in the first place but he’s the one who will be burned at the stake for this crime while the actual perpetrators hide in the shadows.