All Things New BBALL Practice Facility

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When you are generating close to 8 million a year in net profits from an athletic program it just doesn't make much business sense to not tend to it's needs, long term it just can't be ignored.
 

jovs said:
When you are generating close to 8 million a year in net profits from an athletic program it just doesn't make much business sense to not tend to it's needs, long term it just can't be ignored.
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Who is doing that?
 


I think what happened is Bleed posted something that showed the Gophers were the 7th most profitable team and made 8 million. I'm just guessing this is GW's way of saying he disputes that figure. I agree with jovs it doesn't make any sense to ignore this, but indeed it has been ignored and frankly I don't believe it is going to change anytime soon. As I have posted before, those who control the purse strings feel prominent football and basketball teams conflict with the true mission of the U. of Minnesota. Everyone is in agreement with remaining in the B1G though.
 


jovs said:
When you are generating close to 8 million a year in net profits from an athletic program it just doesn't make much business sense to not tend to it's needs, long term it just can't be ignored.
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The profits generated by football, men's basketball & hockey fund the rest of the athletic program. They do not exist in a vacuum.
 

Ski U Mah Gopher said:
The profits generated by football, men's basketball & hockey fund the rest of the athletic program. They do not exist in a vacuum.
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This is true at the U and the rest of the B1G. The question is who decided our football and basketball programs should have what many have called the worst facilities in the B1G? Why are we not a participant in the B1G arms race?
 

per Sid:

Study to be presented

Gophers executive associate athletic director David Benedict reported that the longtime study to reveal what new or remodeled facilities are needed by Gophers athletics to compete with other Big Ten schools will be presented to the Board of Regents this week.

“I think it’s just going to be an opportunity for us to explain the process that we went through to assess the needs of the athletic department and its facilities,” Benedict said. “I think it all comes down to the priority [of what buildings need to be built], and we’re working with the university to identify what those priorities are and there will be some significant investments.”

He added: “I believe there are people in this community that want to see us be very competitive in the Big Ten, and that will find a way to fund those priorities.”

Among the priorities are a men’s and women’s basketball practice facility. “Certainly that is high on the list,” Benedict said. “I know it has been talked about for a long time, but that is definitely a high priority for us.”

http://www.startribune.com/sports/twins/214558591.html?page=all&prepage=1&c=y#continue

Go Gophers!!
 

Ski U Mah Gopher said:
The profits generated by football, men's basketball & hockey fund the rest of the athletic program. They do not exist in a vacuum.
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they could. There is no rule that states that Men's Basketball profits must be spent on the other sports no one cares about.
 



BleedGopher said:
per Sid:

Study to be presented

Gophers executive associate athletic director David Benedict reported that the longtime study to reveal what new or remodeled facilities are needed by Gophers athletics to compete with other Big Ten schools will be presented to the Board of Regents this week.

“I think it’s just going to be an opportunity for us to explain the process that we went through to assess the needs of the athletic department and its facilities,” Benedict said. “I think it all comes down to the priority [of what buildings need to be built], and we’re working with the university to identify what those priorities are and there will be some significant investments.”

He added: “I believe there are people in this community that want to see us be very competitive in the Big Ten, and that will find a way to fund those priorities.”

Among the priorities are a men’s and women’s basketball practice facility. “Certainly that is high on the list,” Benedict said. “I know it has been talked about for a long time, but that is definitely a high priority for us.”

http://www.startribune.com/sports/twins/214558591.html?page=all&prepage=1&c=y#continue

Go Gophers!!
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That's great news! At least it's a start!
 


AO54 said:
There is no rule that states that Men's Basketball profits must be spent on the other sports no one cares about.
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Actually, there is. It's called Title IX. You can't have men's baskeball without a corresponding number of scholarships available to female athletes in a sport "no one" cares about.
 

AO54 said:
they could. There is no rule that states that Men's Basketball profits must be spent on the other sports no one cares about.
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Not so fast. As dpodoll68 stated, Title IX presents a few challenges.

Some Title IX extremists would argue that no one cares about certain women's sports because colleges and universities aren't investing in them. Chicken and egg. The WNBA disproves this theory pretty easily. Football is its own animal because there doesn't exist a female version of it. It's expenses are the highest of any sport, so it's ok to spend more there.

Since there are mens and womens baskeball teams, the U would never get away with (or should even try) to build a mens-only b-ball facility with mens b-ball profits. nothing preventing them from taking mens b-ball profits and building a co-facility - which is 1000 times more likely. Notice even top-notch facilities like those at UK are "mens and womens".
 




scools12 said:
It's a start but the basketball facility actually opening IMO is at least 7 years away.
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I would guess at least 5, but you may well be correct. IMHO Coach P. will have left due to frustration over the lack of support prior to the facility opening. One of the negatives of having a young coach, much less a Pitino, is he will expect promises to be kept and full support from the U., just like other B1G coaches.
 

dpodoll68 said:
Actually, there is. It's called Title IX. You can't have men's baskeball without a corresponding number of scholarships available to female athletes in a sport "no one" cares about.
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You can pay for the female scholarships with money from the general fund. The athletic department already gets money from the general fund to pay for some of the non-revenue sports, they could just pay for more of it. This would be a more honest/transparent way to fund these other sports than just claiming that the athletic department is losing money therefore the most expensive sports football and basketball should be cut without regard to the profit generated by those teams.

This isn't going to happen as Norwood and the regents obviously believe that money can be raised from private donors to fund the practice facility. Probably easier to ask for donations for Basketball/Football when you can hide the profits from those programs and not disclose that much of the donation is actually supporting the non-revenue sports that would otherwise need more money from the general fund which might require cuts from other academic programs the donator might be fine with.
 

AO54 said:
You can pay for the female scholarships with money from the general fund. The athletic department already gets money from the general fund to pay for some of the non-revenue sports, they could just pay for more of it. This would be a more honest/transparent way to fund these other sports than just claiming that the athletic department is losing money therefore the most expensive sports football and basketball should be cut without regard to the profit generated by those teams.

This isn't going to happen as Norwood and the regents obviously believe that money can be raised from private donors to fund the practice facility. Probably easier to ask for donations for Basketball/Football when you can hide the profits from those programs and not disclose that much of the donation is actually supporting the non-revenue sports that would otherwise need more money from the general fund which might require cuts from other academic programs the donator might be fine with.
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That one wore me out.
 

station19 said:
That one wore me out.
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in summary, The U could pay for women's rowing and men's gymnastics with Basketball/Football profits or by cutting academic programs such as underwater basket weaving.

If you didn't have the basketball profit, you'd have to either cut the basket weaving or the extra sports after meeting the Title IX regulations.
 

If you're going to use the report to come up with your basketball profit number, then you should also use that report for other numbers.

Basketball profit is now up over $11MM... but all men's sports combined, excluding football & basketball, are also showing a profit.

How can this be? Several reasons.

For example, *** more than 50% of the athletic department's expenses are not allocated to any sport *** in the report being referenced.

If you're looking to show a profit in a report, ignoring more than 50% of your expenses is a big help.
 

Gopher Warrior said:
If you're going to use the report to come up with your basketball profit number, then you should also use that report for other numbers.

Basketball profit is now up over $11MM... but all men's sports combined, excluding football & basketball, are also showing a profit.

How can this be? Several reasons.

For example, *** more than 50% of the athletic department's expenses are not allocated to any sport *** in the report being referenced.

If you're looking to show a profit in a report, ignoring more than 50% of your expenses is a big help.
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They do the same thing with the revenue. The Big Ten Network money is clearly earned 99% by Football/Basketball but is not attributed as such.
 

Gopher Warrior said:
If you're going to use the report to come up with your basketball profit number, then you should also use that report for other numbers.

Basketball profit is now up over $11MM... but all men's sports combined, excluding football & basketball, are also showing a profit.

How can this be? Several reasons.

For example, *** more than 50% of the athletic department's expenses are not allocated to any sport *** in the report being referenced.

If you're looking to show a profit in a report, ignoring more than 50% of your expenses is a big help.
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This isn't any different than how most businesses run their accounting. Most of my customers have several divisions and shared expenses are not always allocated to the division for normal reporting, but are at a "holding company" or "parent company" level. It all ties out in the combined reporting, but for purposes of analyzing a divison, or in this case, the basketball program, you need to run apples to apples. (meaning, focus on year over year changes for the basketball program, etc).
 

AO54 said:
They do the same thing with the revenue. The Big Ten Network money is clearly earned 99% by Football/Basketball but is not attributed as such.
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I believe you're just guessing here. Each school can and does do it differently. Often you'll see a split of media contract revenues between football and basketball only. Approximately two-thirds to football and one-third to basketball is often used.

Rouser said:
This isn't any different than how most businesses run their accounting. Most of my customers have several divisions and shared expenses are not always allocated to the division for normal reporting, but are at a "holding company" or "parent company" level. It all ties out in the combined reporting, but for purposes of analyzing a divison, or in this case, the basketball program, you need to run apples to apples. (meaning, focus on year over year changes for the basketball program, etc).
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These reports are not subject to ASC 280, my friend.

The reports being referenced here (i.e., the "$8 million in profit") are often NOT apples to apples - not when you're comparing school vs. school or multiple years for a single school.

Again.. if you're going to use an $8MM profit to argue something, you can't refer to huge losses from other sports... because they don't exist if reported consistently with the $8MM (or $11MM) profit.
 

Gopher Warrior said:
I believe you're just guessing here. Each school can and does do it differently. Often you'll see a split of media contract revenues between football and basketball only. Approximately two-thirds to football and one-third to basketball is often used.



These reports are not subject to ASC 280, my friend.

The reports being referenced here (i.e., the "$8 million in profit") are often NOT apples to apples - not when you're comparing school vs. school or multiple years for a single school.

Again.. if you're going to use an $8MM profit to argue something, you can't refer to huge losses from other sports... because they don't exist if reported consistently with the $8MM (or $11MM) profit.
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Not a lot is subject to ASC 280, including most of my customers reporting. That was created to help investors for public traded companies, so reporting would be consistent with management internal reporting. Not sure why that matters here. Internal management reporting is what I am referring to, its a logical way to account for something on an interim basis (between annual periods). Point being, rarely do you account for operating divisions as sole companies, there is rarely every shared expense, you can try to do it, but its a guess and not helpful. Comparing any school's financials to another schools is meaningless unless you are a beat reporter looking to fill time. You can compare how a program does as a whole but even then, athletic departments differ in how much revenue and expense is augmented, etc from the general fund at the school. Its best to look at simple math in my opinion. Total revenue and controllable expenses, compared year over year.

Anyway, not sure there is a lot of point in getting to in depth in athletic department finances.. its tough to read anything.
 

Gopher Warrior said:
I believe you're just guessing here. Each school can and does do it differently. Often you'll see a split of media contract revenues between football and basketball only. Approximately two-thirds to football and one-third to basketball is often used.
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Sure it's a guess. There's a lot of guessing without having better access to the numbers, so let's go with the numbers we know. In 2012 there was $22.7 Million in unallocated revenue and $8.1 Million in Big Ten Network revenue. Men's Basketball profit was $11.1 Million and Football was $16.2 Million. $57.5 Million in Revenue was allocated to Men's teams versus just $3.5 Million for the Women. Are we supposed to believe that the $22.7 million in unallocated revenue should be considered equal between the Men and Women despite the obvious disparity that exists? Perhaps the $7 Million subsidy from the general fund is included in the unallocated revenues, but that would be an expense for the university attributable to the non-revenue programs, not true revenue. It's pretty reasonable to assume that unallocated revenue is the Big Ten Network money that shows every sport on TV and other corporate sponsorships that advertise on every team but wouldn't be there if not for Football/Basketball. Any other ideas on what it might be?
 


AO54 said:
Sure it's a guess. There's a lot of guessing without having better access to the numbers, so let's go with the numbers we know. In 2012 there was $22.7 Million in unallocated revenue and $8.1 Million in Big Ten Network revenue. Men's Basketball profit was $11.1 Million and Football was $16.2 Million. $57.5 Million in Revenue was allocated to Men's teams versus just $3.5 Million for the Women. Are we supposed to believe that the $22.7 million in unallocated revenue should be considered equal between the Men and Women despite the obvious disparity that exists? Perhaps the $7 Million subsidy from the general fund is included in the unallocated revenues, but that would be an expense for the university attributable to the non-revenue programs, not true revenue. It's pretty reasonable to assume that unallocated revenue is the Big Ten Network money that shows every sport on TV and other corporate sponsorships that advertise on every team but wouldn't be there if not for Football/Basketball. Any other ideas on what it might be?
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Where does the loan payments back to the general fund for buying out coaches contracts fall?
 


<blockquote class="twitter-tweet"><p><a href="https://twitter.com/search?q=%23Gophers&src=hash">#Gophers</a> AD Norwood Teague to hold a news conference tomw to give an update on the department's master facilities plan.</p>— PiPress Gophers Now (@GophersNow) <a href="https://twitter.com/GophersNow/statuses/354627419862351873">July 9, 2013</a></blockquote>
<script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>
 

Man, I hope they announce some lead donor, but I doubt it. That sort of thing tends to leak out early..........
 

Have to think it's going to be positive news, otherwise why hold a press conference?
 

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