Tennessee Battles Red Ink

[Lehigh Football Nation]

If Tennessee is hitting up against massive debt and depending on SEC TV money to survive, what does that say about other FBS schools?

http://www.sportsbusinessdaily.com/Journal/Issues/2013/01/28/Colleges/Tennessee.aspx


From the window in Dave Hart’s corner office, the University of Tennessee athletic director can see Neyland Stadium above all else, a fortress along the Tennessee River that instantly identifies the Volunteers as a member of college football’s elite.

Its enormity is a testament to the sport’s incredible growth during the past two decades and the power of the Tennessee brand. It also effectively conceals an athletic department that built enormous debt while trying to maintain its place among the richest and most powerful football programs in the Southeastern Conference.

Now, after staggering to losing football seasons in four of the last five years and seeing attendance drop to levels last seen in the 1970s, the Vols find themselves mired in more than $200 million of debt, the most in the SEC, with reserves of just $1.95 million, the least in the conference.

“The bottom line is that, for SEC schools with extraordinary revenues, the profit margin is still very thin,” said Bill Carr, a former AD at Florida who now consults with athletic departments on strategy and searches. “Whether it’s Tennessee or any other school, if you’re not selling tickets at full bore and getting contributions to go with them, and that revenue tapers, it becomes very hard to put away the dollars you need. And then you have some undesired expenses like buyouts, and you can wind up in a negative position. The margin is razor thin for most schools.”

We're going to be hearing a LOT about debt in education over the next year or so, and if there are a lot more Tennessee's out there it could be ugly for a whole lot of FBS programs.

[DFW HOYA]

"Now, after staggering to losing football seasons in four of the last five years and seeing attendance drop to levels last seen in the 1970s..."

Temmessee's 2012 average attendance was 89,965 per game.

(Maybe improving a home non-conference schedule of Georgia State, Akron, and Troy would be a start.)

[BluBengal07]

The "too big to fail" mindset is going to catch(or have been catching) the big schools off guard, from how it looks. it seems like it's easier to work up than work down in college football. We will see more programs hitting the media fan soon on their football's check and balances.

[chattownmocs]

Maybe the administration should stop stealing money from the Athletic program. Tennessee was drawing in the top 5 nationally in football, basketball, and women's basketball until literally last year. These facilities are expensive but they aren't the only ones building them.

[walliver]

Where does the money go? The players play for free. 89,000+ attendance brings in a lot of money. Even paying the coach a few million a year doesn't run up a $200,000,000 debt.

[chattownmocs]

Where does the money go? The players play for free. 89,000+ attendance brings in a lot of money. Even paying the coach a few million a year doesn't run up a $200,000,000 debt.

A lot of it went to the academic side, which they are supposedly going to pay back. More went to building top notch facilities and stadium upgrades in nearly every sport. Dwindling booster support because of poor results don't help.

[Skjellyfetti]

Where does the money go? The players play for free. 89,000+ attendance brings in a lot of money. Even paying the coach a few million a year doesn't run up a $200,000,000 debt.


- transfer of athletic department money to university - $21,000,000
- buyouts of coaches and administrators in last 3 years - $11,000,000
- above doesn't include Dooley and his assistant's buyouts - $5,000,000, $2,000,000
- renovations to Neyland Stadium (reducing capacity, adding premium seats) - $130,000,000

(these renovations were started in 2004... when Tennessee was one of the most stable programs in college football. they did not know the football program and attendance was going to implode in the near future).

All that and add in their lowest football attendance since 1979... and you get ~ $200,000,000 in debt.

A few good years of football, on the field and in the stands, and they'll be back.

[dgtw]

I guess they should drop down to FCS since they are going broke in the big leagues. Maybe they'll join the Socon.

[citdog]

I guess they should drop down to FCS since they are going broke in the big leagues. Maybe they'll join the Socon.


Actually Tennessee would be REjoining the Southern Conference.

[Lehigh Football Nation]

- transfer of athletic department money to university - $21,000,000
- buyouts of coaches and administrators in last 3 years - $11,000,000
- above doesn't include Dooley and his assistant's buyouts - $5,000,000, $2,000,000
- renovations to Neyland Stadium (reducing capacity, adding premium seats) - $130,000,000

(these renovations were started in 2004... when Tennessee was one of the most stable programs in college football. they did not know the football program and attendance was going to implode in the near future).

All that and add in their lowest football attendance since 1979... and you get ~ $200,000,000 in debt.

A few good years of football, on the field and in the stands, and they'll be back.

The margin between "moderate success" and "crisis" is shockingly thin. All it took for disaster to strike was a few bad head coaching decisions and poor on-field performance.

[BlackNGoldR3v0lut10n]

The margin between "moderate success" and "crisis" is shockingly thin. All it took for disaster to strike was a few bad head coaching decisions and poor on-field performance.

Not to mention mismanagement on the part of the previous AD. Dave Hart inherited a mess at UT which will take some time to clean up.

[DFW HOYA]

Not to mention mismanagement on the part of the previous AD. Dave Hart inherited a mess at UT which will take some time to clean up.

Winning is a great disinfectant.

[BluBengal07]

since we're talking about UTenn, has UT football ever recovered since Manning left?

[CID1990]

If Tennessee is hitting up against massive debt and depending on SEC TV money to survive, what does that say about other FBS schools?

http://www.sportsbusinessdaily.com/Journal/Issues/2013/01/28/Colleges/Tennessee.aspx



We're going to be hearing a LOT about debt in education over the next year or so, and if there are a lot more Tennessee's out there it could be ugly for a whole lot of FBS programs.

The football tail has been wagging the dog at big universities for years. The pigeons will come home to roost and that's just fine by me. Colleges are for education. Athletics are secondary.

[Go Green]

since we're talking about UTenn, has UT football ever recovered since Manning left?

They did ok the year after he left. :)

[chattownmocs]

Seems like a bit of overestimated this issue. I don't think Tennessee is about to go out of business. This is just Dave Hart making excuses.

[Skjellyfetti]

The margin between "moderate success" and "crisis" is shockingly thin. All it took for disaster to strike was a few bad head coaching decisions and poor on-field performance.

And the margin between "crisis" and "moderate success" is also shockingly thin.