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Much Ado About Nothing


I realize it is the offseason and sportswriters are looking for anything to write about, but this $16 million loan has just about played its course. Yet, we get another article from Tim Griffin today expressing angst about the financial situation of the athletic department. The article is so ripe with errors and half truths it hardly deserves being mentioned.

Star-divide

First off Tim, the $16 million loan from the university is NOT an interest bearing loan. The AD is going to pay $1.6 million per year for ten years to pay it off. In laymens terms we either need to find a $1.6 million increase in revenue or cut $1.6 million from the budget to find that money.

This is not very hard to do in a $70 million budget. If the A&M football team qualifies for a bowl game the increased revenue from the game will cover that. If two Big 12 schools qualify for BCS bowl games the increased revenue share from the conference will likely cover it. If A&M were to advance to the Sweet 16 in basketball the increased revenue share from the tv contract with the NCAA would likely cover it. It is really not that hard to find $1.6 million.

The school is not trying to whittle down the $16 million loan by $4.5 million in the first year. If you had read ANY of the articles on the subject, you would know that the $4.5 million figure came from a request by the univesity to lower the athletic BUDGET. It had nothing to do with the loan. I know many in the media are trying to connect the two, but the $4.5 million reduction in spending was due to the fact that everyone at A&M had been requested to tighten their budgets so the AD was informed to tighten their's in the name of fairness.

The biggest problem I have with all these articles is that the vast MAJORITY of athletic departments across the nation operate every year in the red. Most athletic departments lose money every year. A&M and tu are two of the 5-6 athletic departments who finish with a profit every year. It may surprise you to learn that even when Michigan was going to the final four with the Fab Five and to the Rose Bowl in football, the athletic department was in the red. This whole myth that athletic departments are making millions of dollars off the poor student athletes backs is simply that, a myth. The athletic departments take in millions of dollars in revenue, but spend millions of dollars on scholarships, coaches salaries, travel, recruiting, promotion, and various other areas. If A&M has to join the 95 percent of all the athletic departments in the country that lose money on an annual basis for a year or two, so be it. Sometimes large corporations lose money. You reassess and reorganize, and come back leaner and stronger. I expect A& to be back in the black next year, but if they are not it is not like a year or two in the red is going to kill us.  

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…is that it may not be as easy to cover $1.6 million in one year as you think. I think all bowl revenue is pooled and shared evenly among the 12 conference teams. On top of that, you have to consider travel expenses to and from the bowl game. Most teams going to lower-end bowls lose money on their bowl trips, so unless you guys are going to a really good bowl this year, like Alamo or Holiday good, I wouldn’t plan on a big bounce from that.

Your distribution from the conference was $9.22 million last year, and that was with two teams in BCS bowls. Going to the Sweet 16 in basketball would get you three units from the NCAA, but after travel expenses, that’s not going to add up to $1.6M. I suppose all these sources together might get you there, but I’m not sure I’d bet on it, either.

We'll carry the banner high!
Bring On The Cats

by TB on Jul 8, 2009 2:10 PM CDT reply actions   0 recs

actually

I think the $4 million payout from the Arkansas game will help cover the loan payment this year.

After expenses, that is $1.5 million in profit more than we make on a home game.

Of course, the way Byrne spends money like water, who knows?

by Beergut on Jul 8, 2009 3:00 PM CDT reply actions   0 recs

to be fair
Whether the school and team get together remains a salient point as the Aggies try to cut into a $16 million deficit that will have to be paid off without interest over the next four years.

Griffin does say it is a non-interest bearing loan.

by Beergut on Jul 8, 2009 3:04 PM CDT reply actions   0 recs

I thought the Sweet 16 was worth more than that. Anyhow, the bottom line is that we should not have too much of a problem finding the money. If our football team is decent (or our opponents seasons are decent), we will be scheduled in more tv games as the season wears on which will lead to more revenue. We are paying Fran more not to coach than we owe on this loan.

by miketag on Jul 8, 2009 4:59 PM CDT reply actions   0 recs

should have said, owe per year on this loan.

by miketag on Jul 8, 2009 5:00 PM CDT reply actions   0 recs

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