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Living Large

By on February 19th, 2015 in Football 5 Comments »
Budget piece

The Auburn Athletic Department ran a 13.7 million dollar deficit last year.
(Photo by Acid Reign.)

     War Eagle, everybody! A sobering bit of news came out this week from the Plains, amid great stories about new oaks, amazing basketball victories, gymnastics moving up to #8 in the country, and fine Auburn men at the NFL combine. Success comes at a price in big time college athletics, and Tiger supporters are experiencing a bit of sticker shock this week. It was revealed that not only did the athletic department lose $13.7 million last year, but that it was the second year in a row of running a deficit. Auburn’s total athletic debt is a staggering $109.4 million! Auburn paid $10.88 million in interest on that debt just last year.

     A laundry list of reasons for such deficits can be trotted out. It takes big bucks to attract the best coaches, and Auburn appears to be committed to paying for the best as it made defensive coordinator Will Muschamp the highest paid assistant coach in America recently. Auburn has made splashy, expensive coaching hires in the past couple of years, while also paying large buyouts to fired coaches. Gene Chizik, Tony Barbee, John Pawlowski and Ellis Johnson are still on the payroll.

     Facilities expenditures have increased this decade, as a new state of the art basketball arena was built, and several stadium projects were completed. These included new Heisman-winner statues and murals outside the stadium and new items inside, celebrating the 2010 national championship.

     A look across the state at Auburn’s neighbor in Tuscaloosa reveals a different picture. Alabama reported an operating surplus of $33 million. How can this be? Is Alabama really that much better at making a profit? Some will point to more coaching stability, although a potential dismissal of basketball coach Anthony Grant will add to the Tide’s tab. Still, the Tide athletic department did expand Bryant Denny Stadium to a capacity greater than 100,000 in the last decade.

     The real answer is incoming donations and endowments. While Auburn is attempting to compete at the highest levels in the SEC, support hasn’t been anything like what Alabama has received. Call them sidewalk alumni if you want, but Tide supporters give. Alabama received $10.7 million in endowment/investment money, while Auburn received just $1.2 million. Alabama raked in $34.9 million in ticket sales last year, to Auburn’s $28.2 million.

     As big as the above Tide advantages are, where they really clean house is in licensing and royalties. Alabama reported $29.1 million from those areas, to $11.6 million at Auburn. Folks are buying those Tide items, and Alabama can command top dollar on those deals.

     So, should Auburn rein in athletic spending and try to pare down the debt? Sadly, that won’t work. Auburn has to win, to keep revenues flowing in. Field championship teams, and revenues will flow in. This also helps the university at large, as donations to the academic side tend to mirror athletic donations. We’ve seen what support looks like when the Tigers aren’t good on the field. See the picture below.

Lack of Support

Auburn vs. Texas A&M, 2012.
(Photo by Acid Reign.)

     I’ve seen opinions both ways on the subject of college athletics, and what it costs. It can be argued that Auburn’s goal is to win championships, and that striving to do so will bring in the money to keep it all afloat. I can pretty much guarantee that there is more celebrating when Auburn wins SEC or national titles than when the athletic director announces a budget surplus. How many folks remember Jay Jacobs announcing that in 2010 Auburn had a $1.7 million operating surplus? I think even a win over the Mississippi States of the conference generates more enthusiasm. Like it or not, deficit spending is here to stay.

5 Comments

  1. sweetau says:

    Informative piece regarding athletic buget. Not surprised nor unconcerned. I’ve never reasoned that comparing Auburn to Alabama is an apples to apples example. Our AU fan-base model is so different from AL. It is no secret the national presence of the tide. Our footprint is smaller..more regional. Shall I say..family oriented.

    Having lived in various states and large metropolitan areas, I have, on occasion, been asked the difference between AU and AL? I compare AL to Notre Dame. ND has fans.. Catholics, that have never been near South Bend. Just as throngs of Bama fans most likely could not locate the state of AL on a blank national map.

    It would be my desire that we not chase the red elephant nor spend precious resources trying to best them. Our emphasis should be creating a world class institution, that contributes mightily to society and fields competitive athletic teams but is not controlled by them. Don’t misunderstand, I love to win! But….I believe Pat Dye said it best. “Bama fans love Alabama football. Auburn fans love Auburn University!”
    WAR EAGLE!

  2. Tigerstripe Tigerstripe says:

    Yikes…that is troublesome. I really think this has a lot to do with our history. The land grant battles and the fact that the state of Alabama has always politically favored Tuscaloosa, add in the 40+ years we didn’t play bama, plus the success of Bryant and you’ve bred multiple generations of bama fans. Even though they will never fill out a university application or even put their butt in the bleachers, they buy the bama product from WalMart at a staggering pace.

    Money has ruined what’s left of the sport…coaches have way too many bargaining chips at the table to demand their wages and now AU is paying the price for that fact. Too much disparity between the coaches and the players. Watch a Kentucky basketball game and count how many times a player rolls his eyes at his coach… The players know the deal and are no longer willing to be a ‘cog’. Coaches have no other recourse than to treat football as a business rather than a game played by young men – too much money on the line. A business that supports the university’s budgets. There’s nothing ‘amateur’ about it anymore. Basically the university holds the name brand but the coaches, players and boosters have control of marketing the name brand. Everyone is leveraging power away from the university.

    To be successful, universities have been coerced by boosters and fans to dip their colors and go get that problematic athlete with baggage and what do you get? football players who harass female veterans. You can’t ‘keep up with the Joneses’ anymore…too much history against you. I hope we’re not becoming victims of our recent success and being duped into believing that Auburn is something that it is not… Time will tell.

    In the meantime, look for ticket prices to increase so we can watch football players roll their eyes at the coaches on the new jumbo tron. Forgive my curmudgeon attitude; I need more bran in my diet.

  3. neonbets says:

    A $1.7 million surplus after a National Championship year. Being charitable, as is my wont, let’s bump it to a cool $2 mil.

    FIFTY-FIVE CHAMPIONSHIPS…and we are back in the black, baby. That is exactly the kind of long-term thinking I want from our Auburn stewards. Hell, and I’m not even taking into account the interest along the way, so let’s bump ‘dem rings up to SEVENTY-FIVE. Now that’s what I’m talkin’ about. Seventy-five rings later and I’m ready to kick it on to the after-life. Hello Swag. Bring me my Bling.

    One for the thumb? Please. More like One for the distal phalanx…bitch.

  4. ATL_AU_FAN ATL_AU_FAN says:

    Please don’t take this in an incorrect manner but I have to wonder how many AU fans concerned over the deficit contribute more than $10k per year as do I? And, with that said, I’m not the least bit concerned over the final bottom line. Reasons why, you may ask? Sure, I’m okay with that. First, I have zero issues with terminating coaches, i.e. CGC, and continuing to pay those coaches predicated on contract obligations. I also have zero issues with hiring a coach such as CGM and paying that coach what is required. I absolutely have no issues with making Will Muschamp, at least temporarily, the highest paid assistant in college football. Why? Because I simply see all of these as investments that will pay off in due time. (Now, is this doesn’t have an end result of being productive I will probably have a change of opinion.)
    I’m not worried over “keeping up with the Tide” or anyone else.
    Maybe I’m in something of a unique position where, should the call come in, I can afford to simply donate more. But, Auburn University as a whole doesn’t appear to be concerned at this point so neither am I.
    Oh, sure, I had much rather AU be at a surplus but, at the same time, without these deficits we would not have the coaches we have nor would we be looking forward to the coming seasons on the Plains with the same optimism. We certainly would not be hearing of discussions of an expanded video board or other improvements to JHS.
    Now, the CPA among us, and he knows who he is :-), may disagree but sometimes you have to spend money to make money and that’s exactly the manner in which I view this bit of news.
    We, being a part of AU, may show a deficit but AU certainly isn’t broke or on the route to bankruptcy.
    My opinion matters not but it is mine and I feel welcome to share it.
    In the words of a better man than I, “That’s my time; I thank you for yours…”

    War Damn Eagle

    • Acid Reign Acid Reign says:

      …..No offense taken. I’m NOT a big contributor, especially with two college-age kids! I tried to write this piece with more of a neutral, “what do y’all think?” meme, than a one-sided condemnation. I’d like to hear all viewpoints on it.

      …..Myself, I’m crazy-adverse to debt. I pay the credit cards off in full every month, and bought cheap enough cars the past few times that I didn’t have payments. The only exception I’ve made in the last 20 years was when the combustion chamber on our ancient furnace ruptured and half of it fell into the furnace fan and mangled it. We had two toddlers in the house in November at the time. I had the grand total of $400 in my checking account, so out came the Visa for the new furnace. I paid that balance off in a few months, and hated every minute of it hanging over me like Damocle’s Sword!