Their president says selling the athletic department to outside vendor is an option on the table.....
University of Arizona has $240m shortfall
- Thread starter Duke Humphrey
- Start date
Maybe they aren’t going to keep their head coach after all
No more than what they were making from the PAC-12. Problem is their budget is about the same as ours and they're trying to spread it over 23 sports compared to our 14.
But at least they are going to be able to rack up more frequent flyer miles. So they’ve go that going for them.
No, I think the shortfall is very real on university side. Problem is the university loaned athletics $55m during COVID and its not being repaid "fast enough"
Now can someone please explain to me what the hell these Universities do with these endowments again? Must be tied up in crypto.*
How is selling a real option? Can somebody explain why anyone would support University athletics that aren't tied to the university?
Now can someone please explain to me what the hell these Universities do with these endowments again? Must be tied up in crypto.*
I wondered this as well. I'd guess most of the endowment money is given/tied to specific entities/projects within the university. So like the $17 million Poopopsbaldhead Endowment for Economic and Sexual Research can't be used because the football department is running short.
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They need to hire LT for about 6 months, he'd get them in the black **
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I guess they could drop Men's and Women's Swimming&Diving since only 5 Big12 schools have that as a sport.
Dropping Triathlon for sure sounds like a win. I bet they will be in the black in no time if they drop that!***
But everything else is pretty reasonable and mainstream.
The professor that called for a sale of the Athletics Dept said that if they sell, then a company that knows what its doing could come in and actually manage it properly.
I am guessing he is not on the AD's Christmas card list.
Probably a bunch of restricted investments where they can only touch the interest for operations. But I agree - seems like dire circumstances would allow you to cash some of out .
Call JG Wentworth. They need cash now
Article says the university already loaned the athletic department $55-million that it can't pay back.
You've been Byrned*****
Need to get back into the black, you say? We've got just the man for the job
Kudos to that prof. Maybe they just need to spend around $100 million upgrading baseball and basketball facilities then the money will pour in.
I’m guessing that at some point there were adults in the room that specifically tied up their endowment In certain ways to keep future idiots from squandering it. They probably underestimated how quickly stupidity breeds.
After reading the article, two things come to mind
1) If Arizona's athletic department operates with a $100m annual budget, and they are currently $240m in the hole, I mean... they would've had to overspend by $40m/yr for SIX years to get to this deficit. How in the holy hell is this just not being brought to the table as problem?
2) College athletics has been operating for the last twenty years like it can just spend whatever it needs to spend, and TV revenue/giving will continue to back it up. $100m stadium renovations? Bring 'em on. $10m/yr coach contracts? Why not? And now with NIL, it's just blown the top off the coffers again. I've been thinking for years that if we ever reached the point when AD's could no longer depend on December's income to pay for November's expenses, they'd be in big, big trouble. Also, I'm going to venture to guess that Arizona isn't the only school in this predicament
1) If Arizona's athletic department operates with a $100m annual budget, and they are currently $240m in the hole, I mean... they would've had to overspend by $40m/yr for SIX years to get to this deficit. How in the holy hell is this just not being brought to the table as problem?
2) College athletics has been operating for the last twenty years like it can just spend whatever it needs to spend, and TV revenue/giving will continue to back it up. $100m stadium renovations? Bring 'em on. $10m/yr coach contracts? Why not? And now with NIL, it's just blown the top off the coffers again. I've been thinking for years that if we ever reached the point when AD's could no longer depend on December's income to pay for November's expenses, they'd be in big, big trouble. Also, I'm going to venture to guess that Arizona isn't the only school in this predicament
Its not their athletic dept.... Its the entire university.. In fact, I would be willing to bet the $240m has nothing to do with Athletics as it is more than likely a completely separate budget, other than the $55m the university loaned Athletics
ETA: Your point 2 is perfectly valid and correct though
I'm guessing he meant something more akin to a licensing agreement like we do with some state and national parks. Operators would bid on the operating rights by giving the university a guaranteed income stream. Then they run it to make a profit, subject to some constraints to keep them accessible. Turns a liability into a profit center for the governments. Something similar could be done for sports but there'd be a lot of potential landmines.
Endowments provide income through the interest/increase in value unless there's very special circumstances, and even the interest draw is limited by most bylaws to 4% to 4.5% a year.
Attempting to draw more than that is a huge red flag for banks that hold a university's debt, and to the accrediting body for the school. General endowment money, probably about 3/4 of that endowment, is almost always marked for operational expenses, which include tuition discounts, physical plant, salaries, etc. When states cut funding back around 08, endowment and fundraising was the main way to keep the doors open, as tuition, especially at a state school, doesn't come close to covering the bills (even though tuition has more than doubled on average for public undergrad degrees).
There's no way a board would or could spend a significant chunk of that on athletics, and it sounds like they've already maxed out borrowing and are getting some long looks from the lenders.
I’m sure it’s been mentioned in previous University of Arizona-related posts here but their president is a Mississippian.
This is just another story from the rapidly changing Higher Ed industry, dozens, perhaps low triple digits worth of colleges have closed since 2020 and more will happen in the coming years. I’m amazed it hasn’t happened in Mississippi. Arizona being a flagship will make it but the days of Millsaps, William Carey, Blue Mountain type schools are numbered. Some will survive as others fail and they reap the benefit of students who still desire a small, private education.
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