Tech (AA) projecting $2.4M deficit, but expecting recovery

[awbuzz]

Link
New basketball coach Josh Pastner and his staff, repairs to Bobby Dodd Stadium and slow ticket sales are expected to drop Georgia Tech’s athletic department into a $2.4 million deficit for the coming fiscal year.

 

[GTFLETCH]

Well if football doesn't win this year they may not recover!

 

[Jerry the Jacket]

Just like anything in life, having success leads to success. I hope the scoreboard situation is covered under some sort of warranty or guarantee. That's a lot of money for something that is not performing properly.

Go Jackets!

 

[AE 87]

I wonder if the "plenty of money" voices will admit misjudgment.

 

[dressedcheeseside]

This at a school that boasts 1 in 6.

 

[33jacket]

I wonder if the "plenty of money" voices will admit misjudgment.

AE no, because its how the AA does accounting. For instance; they try to break even every year purposely. This year had an extra expense or two special (coach and scoreboard plus maintenance that popped up) Hence why they have a multi million dollar slush fund

Let me give you an example of my point. 8 years ago the AA budget was 60% of what it is today. Now, inflation alone doesn't even come close to this right? So why did the numbers go up? Revenue went up, spending went up, costs to buy out people where there. Here is the point...operating costs didn't go up 40% in 8 years. The AA choices on how to fund and spend the money did in proportion with revenue. They didn't have too. If you just raised our expenses from 8 years ago on inflation alone, plus some coaching raises...we still have a multi million dollar surplus. But we purposely try to spend every dime....The AA doesn't ever WANT to make money (of course they will say they do, but the reality is at our budget level the goal is to put every dime back into the programs)

just like this year. They already established the fiscal budget year start, add in a few pop ups and you have your 2 million dollar deficit...WHICH IS NOT debt. Two totally different things. We are totally in debt just by the definition of outstanding loans....to cash...of course we are....but that doesn't mean we are unhealthy. Like if you have a 500k mortgage but only 100k in liquid. You are in debt, but doesn't mean unhealthy.

The AA has a yearly cash flow restriction in operating expenses. Which they publish and purposely break even. There is a ton behind the scenes they can afford and don't show.

Let me ask you. In all you years following GT, have we ever made money? Nope...never...either a million high or a million low. Don't believe the propaganda. If they AA came out and said we are healthy as hell and have record revenues (true) and have a 6 million dollar slush fund (true), restructured our loans for quicker payoff (true) and we are ok...do you think people feel compelled to donate?

Listen you can argue with me alot on the merits of football etc...I was the president of a AA board for 2 years under radakovich in the AA. I know what is going on and how they manage. Its a simple equation....tied to revenue, to use it all up and break even, add in slush funds and extra fund raisers...the AA is healthy. What Rad tried to do is stop operating expenses in anticipation of more revenue...which happened...just not on his tenure. Bob came in with more revenue and rightfully added back operating expenses to continue to push the boundary and break even.

The big schools make so much money...they can't spend it. Tech doesn't and proportions everything 1 dollar to 1 dollar. But again, doesn't mean we are in bad shape or don't have money

Any unhealthy AA doesn't do a bball practice facility, mccamish renovation, indoor football facility, softball new field all in the past 8 years without good finances and credit. Some of that was donor money, but donor money is not pure cashflow and certainly wasn't even 50% of the capital needed for all this....again...its propaganda to a degree. Which is why in fact we have plenty of money. Go look at truly unhealthy AA's...they don't do what we do...and have done...We have awesome fund access and a healthy capital campaign. Money is always an issue, but not AN ISSUE.

Even Bob was like yeah we have a small deficit this year, but we are ok and in the years coming ok...he knows it...

 

[awbuzz]

@33jacket
Thank you for the insight.

 

[redmule]

Reminds me of the old saying that a farmer buys retail, sells wholesale, pays the freight in both directions, and goes broke every year, but somehow keeps on farming every year.

 

[AE 87]

No worries @33jacket

We have a different understanding of "plenty." Of course, having funds to draw from means that 1 or 2 years of deficit spending can be dealt with. It's also possible that we budget a surplus so that a deficit doesn't add to debt.

It's also true that the significance of a deficit depends on its proportion to income so that georgie and bama could handle more than GT.

So, my post was not really speaking to whether further deficit spending could be afforded as much as to the idea that there's no good reason against adding an additional 300k of deficit spending to the annual operating budget because of having plenty of money.