The Painful Truth-Good Intentions Gone Awry

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Bay Area UMie
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The Painful Truth-Good Intentions Gone Awry

Post by Bay Area UMie » Sat Dec 05, 2020 1:41 am

After nine long years, we have plenty of first-hand experience and an abundance of data to realistically evaluate this FBS experiment/test market/investment trial (pick whatever evaluative classification you desire). There is no better evaluative test than the test of time and we certainly have given this FBS initiative more than enough opportunity to achieve the stated goals and objectives that theoretically provided the rationale to “upgrade” the football program back in 2011 (much more on that questionable decision later).

By any objective performance measurement- wins & losses/competiveness (as indicted by game scores)/attendance/student interest/alumni interest/revenue generation- the upgrade to FBS has undeniably been a colossal failure. Those who baselessly claim that the University generates some abstract benefits like “enhanced brand equity” from competing (I use the term loosely) at the FBS level take a long look at many of the media references/clippings that associate us with failure in various forms. ESPN’s widely read digital platform mocked us as “UMess” on numerous occasions (ESPN digital delivers 26m daily unique visits that translate to millions of advertising/PR impressions-in our case VERY negative impressions). Game summary headlines and other football program news coverage in the traditional press have typically taken a negative tone such as the samples listed below:
• “UMass Can’t Compete“
• “UMass On The Short End Again…”
• “UMass drubbed at Notre Dame 62-27”
• “UMass Leaves MAC after short Unsuccessful Stay”
• “UMass Not Up to the Challenge…”
• ”UMass Football and its Brand Take a Beating…”
• “UMass has little to show after leaping into Big-Time Football,” etc.
A 19% winning percentage (19/81) won’t generate great press clippings. Is anyone willing to argue that these consistently negative press clippings, that are basically huge billboards or loud megaphones, that frame us as nothing more than gridiron also-rans haven’t tarnished the core UMass brand in some form?

More telling, even President Meehan has publicly stated that “Branding is important…obviously there’s a concern about what it (football) means in terms of the brand.” Meehan was rumored to have privately called the upgrade “a dumb idea.” For the record, Meehan’s staff did publicly deny that he made the statement. Don’t like the “UMess” reference, then pick your semantic preference or whatever appropriate metaphor you like to describe the FBS experience, there certainly are many options that are apropos-“train wreck, dumpster fire, root canal, highway-to-nowhere, clusterfuck.”

Let’s scrutinize the financials and the huge toll/opportunity cost impact on the Amherst campus’s operating budget (something the pro FBS supporters on this board are completely averse to acknowledging or perhaps in “Jack’s” case incapable of comprehending). Since the 2012 “upgrade,” the University has “invested” (you could reasonably contend “wasted” is a more appropriate verb) between $100m-$105m on the FBS “upgrade” based on the public records I could find. The details are as follows:
• $5-$6m: annual institutional support including mandatory student fees,
• $37.8m: total bond debt to finance facility improvements and
• $12.2m: total interest payments to service the debt obligations (@ an average annual coupon rate of 3.5%).

According to The Boston Globe, the expenditures detailed above (that I sourced from state gov docs available in the public domain) are actually conservative estimates that understate the true scale of commitment. The Globe claims capital borrowing for facility improvements is actually $48m.The Globe also argues that an FBS ROI analysis should include an incremental $10m for scholarship upgrades necessary to comply with Title 9 equal access regulations necessitated as a result of the FBS move. Add in an extra $350k per for annual interest payments on the additional $10m debt and you have a total of about $23m incremental costs which brings the 9 year aggregated total investment to almost $130m.

At the very least, the $130m creates some quantifiable context to what some campus administrators ambiguously refer to as “a multi-million $ commitment” (also, note The Globe claims facility management fees have increased by $250k per year because of the upgrade, but without documented proof I have omitted what would be another $1.7m from the 9 year cost aggregates). Additionally, The Globe identifies a few other related ancillary charges that for some reason are captured on the Amherst campus p&l/budget but not within the athletic department financials. These costs include $375k per for “Administrative Football Expenses” and about $975k per for “University Relations for Ads/PR/social events”. Absent confirmed data sources for these items over 9 years, I have not included these expenses in the aggregate totals. But, shockingly the possibility exists that these are recurring annual expenses. If accurate, you could conceivably add another $12.2m to the total 9 year expenditures-who the hell knows what the total expenditures are… but the totals are unquestionable pretty large, could be anywhere between $100m-$140m!

This whole mess (tempted to use the ESPN “UMess” descriptor but screw them and their very powerful media influence) can best be summarized as- enormous costs with minimal, if any, benefits. Is there someone in or outside the UMass community that truly believes that UMass’ educational mission and the UMass brand would not be better served if the $130-$140m (or even $100m if the lower number is a more accurate representation of the total investment) was invested in hiring world renowned faculty, used to fund important on campus research that benefited the state economy or science in general, rebuild campus infrastructure, provide much needed scholarship money to deserving students or even increased annual operating budgets for under-funded athletic teams like baseball or tennis?

Regarding the financial subsidies and revenue generation, let’s not forget that the Governing Board approved the upgrade predicated on Pro-Forma Financial projections that called for break-even/self-sufficiency by year 5, ie football generated revenues (gate receipts/media rights & sponsorships/away game guarantees/merchandising/NCAA transfer payments) would cover all program related costs after 5 years. We are 4 years beyond the projected “break-even” threshold and the institutional subsidies remain at $4m-$6m per, nothing but bold red ink on the cash flow statements. Let’s also recall that the other major proposition/stated benefit for approving the upgrade was beyond monetary considerations, ie a less tangible “brand image enhancement” was a stated goal/benefit. What a farce, no need to rehash the indisputable reputational damage done to the school’s Brand Equity. The definition/measurement of “success” in any organization (profit or non-profit) is if and when a strategic or tactical quantifiable goal is achieved. Is anyone willing to feebly attempt to argue that the original two objectives underpinning the FBS upgrade (financial independence & the very abstract, but measurable brand equity enhancements) have been fully achieved or even partially achieved and by extension that the “upgrade” is successful?

Where are we headed? IMO, we are blindly marching to an inexorable fate of perpetual red ink and continued reputational damage unless the UMass Governing Board finally steps in and exerts its fiduciary duty by auditing/reviewing the current state of the program and acknowledging the painful, but obvious truth- that the costs to run this thing far outweigh the benefits. Ultimately, the Board needs to hold the current administration accountable for the huge shortfalls from the original pro-forma projections and other targeted objectives/benefits that haven’t to this point, nor will ever be achieved. The Board should also audit attendance figures to understand if per game attendance legitimately meets the NCAA 15k “paid” average annual/game targets to remain in the FBS subdivision. The UMass community needs to know if the UMass administration is applying some creative accounting or other means including counting complimentary tickets, counting band members and cheerleaders or the athletic department is purchasing tickets outright (see Miami of Ohio, or University of Maryland Athletic Department practices) to inflate attendance data to meet the 15k per game requirements. Not accusing anyone of improprieties or operating outside NCAA guidelines, just need to understand attendance figures, which are a good proxy for pure interest in the program. Yes, Bamford and Subbaswamy are victims of bad decisions from those who came before, but now-fairly or unfairly- they own this mess.

To those who are delusional and suggest that the football program can be invigorated and achieve long term gridiron glory and attractive financial returns, I say “when does “the build” become “built”, and what is the endgame” (to borrow a term from the corporate tech world)? Do we continue to invest recklessly and irresponsibly by spending good money after bad on an indisputable failed initiative with 9 years of overwhelming evidence that this gridiron glory pursuit is nothing more than a fool’s errand? What is a realistic goal- an occasional middling season that cracks the .500 barrier, a 7 and 5 record every 3-4 years resulting in a well-earned visit to the prestigious Fracking Bowl in Montana on December 24th, 10pm game time vs Southwest Georgia State U live streamed on YouTube? Do we add another $50m-$60m in debt obligations to the school’s/state’s balance sheet and pickup the related $1.5m-$2.0m annual interest payments on the debt to fund cheap cosmetic and structural renovations at Mcguirk in an attempt to create better “fan experiences” and to make UMass Athletics more attractive to a FBS conference (for perspective, the cost for UConn’s stadium build in 2020 $’s is $125m, Delaware and Old Dominion recently spent between $60m-$70m before interest payments to renovate existing stadiums)? An invitation to a powerhouse conference and the $30m-$40m annual media rights revenue share “isn’t walking thru that door” to quote a disgraced UMass alum, nor is the UMass version of T Boone Pickens walking thru that door with a $250m gift for athletic facility upgrades.

It’s time to acknowledge a painful reality and move-on from this economic insanity, especially in light of the $330m (and growing) system wide operating budget shortfall. Yes, there are related costs for implementing an exit strategy (honoring coaches’ employment agreements/severance packages for those without contracts/offering full scholarships to student-athletes who stay/breaking contractual scheduling commitments), but even if we are looking at one-time exit related payments in the range of $10m-$15m, that potential cash outlay is a 2-3 year payout that is an attractive ROI in most industries-private or public. Unfortunately, these are the costs associated with what were good, but unrealistic intentions gone awry. If penalties for terminating game commitments are cost prohibitive, then we should drop down to the FCS subdivision and threaten to show up to honor our contractual obligations. You’ll see how fast the Penn State’s, Iowa’s, BC's, Pittsburgh’s and Auburn’s will let us walk from these obligations with minimal associated costs.

The realities of this failed nine year journey are not easy to come to terms with and it was very painful for me to document pertinent details-we all want our beloved UMass to succeed. I fully supported the football upgrade for 8 years, but at a certain point the unvarnished conditions need to be squarely addressed. Importantly, this post is not intended to be a slight to the fine student athletes and dedicated coaches who played, coached or are currently on the football roster. Thank you for your excellent efforts while proudly wearing the Maroon and White. You have performed admirably under extremely difficult circumstances. Your employment contracts and scholarship commitments should be 100% honored by the University. Unfortunately, you were placed in an impossible situation by an incompetent prior athletic administration and the idiotic members of the Governing Board’s football sub-committee members 10 years ago (whose co-chairs were inexplicably a former hockey coach and a dentist) who naively approved a poorly researched and thoughtless strategic and tactical plan based on absurd assumptions.

Good health and happy holidays to all!

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Re: The Painful Truth-Good Intentions Gone Awry

Post by dennisdent » Sat Dec 05, 2020 11:09 am

WARNING! Save yourself reading time: Executive summary: UMass football sucks and it should go away.

I see why you haven't posted in soooooo long, building it up for this one! :lol:

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Re: The Painful Truth-Good Intentions Gone Awry

Post by m626t » Sat Dec 05, 2020 12:51 pm

I believe this post by Bay Area UMie is perhaps the longest and researched opinion piece I have read in months. While I am saddened by it's conclusion, and the obstacles great, I cling to the hope that in 3 to 5 years we will have a football program that is winning more than it loses and is on the path to membership in a viable conference.
All due respect, and I mean that from the bottom of my heart, I'm gonna pass.

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Re: The Painful Truth-Good Intentions Gone Awry

Post by PreecherJenkins » Sat Dec 05, 2020 1:19 pm

BayArea- What a write up. Thanks for bringing real numbers to the table.

how much red ink did the four games this year cost versus not having games?
"You are what your record says you are" Coach Bill P.

JUST SAY NO TO THE MAC

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Re: The Painful Truth-Good Intentions Gone Awry

Post by dennisdent » Sat Dec 05, 2020 2:03 pm

PreecherJenkins wrote: Sat Dec 05, 2020 1:19 pm BayArea- What a write up. Thanks for bringing real numbers to the table.

how much red ink did the four games this year cost versus not having games?
Sorry but those "real numbers" don't say anything. Here are the only "real numbers" that matter:

https://www.umass.edu/senate/sites/defa ... 0Final.pdf

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Re: The Painful Truth-Good Intentions Gone Awry

Post by PreecherJenkins » Sat Dec 05, 2020 4:35 pm

dennisdent wrote: Sat Dec 05, 2020 2:03 pm
PreecherJenkins wrote: Sat Dec 05, 2020 1:19 pm BayArea- What a write up. Thanks for bringing real numbers to the table.

how much red ink did the four games this year cost versus not having games?
Sorry but those "real numbers" don't say anything. Here are the only "real numbers" that matter:

https://www.umass.edu/senate/sites/defa ... 0Final.pdf
Thanks for the link Dennis.

So football, brought in 8.802m spent directly 8.803m. Then because we had Football it cost us another 7.0m. Brilliant.
"You are what your record says you are" Coach Bill P.

JUST SAY NO TO THE MAC

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Re: The Painful Truth-Good Intentions Gone Awry

Post by McKinney » Sat Dec 05, 2020 7:22 pm

Bay Area UMie wrote: Sat Dec 05, 2020 1:41 am To those who are delusional and suggest that the football program can be invigorated and achieve long term gridiron glory and attractive financial returns, I say “when does “the build” become “built”, and what is the endgame” (to borrow a term from the corporate tech world)? Do we continue to invest recklessly and irresponsibly by spending good money after bad on an indisputable failed initiative with 9 years of overwhelming evidence that this gridiron glory pursuit is nothing more than a fool’s errand? What is a realistic goal- an occasional middling season that cracks the .500 barrier, a 7 and 5 record every 3-4 years resulting in a well-earned visit to the prestigious Fracking Bowl in Montana on December 24th, 10pm game time vs Southwest Georgia State U live streamed on YouTube? Do we add another $50m-$60m in debt obligations to the school’s/state’s balance sheet and pickup the related $1.5m-$2.0m annual interest payments on the debt to fund cheap cosmetic and structural renovations at Mcguirk in an attempt to create better “fan experiences” and to make UMass Athletics more attractive to a FBS conference (for perspective, the cost for UConn’s stadium build in 2020 $’s is $125m, Delaware and Old Dominion recently spent between $60m-$70m before interest payments to renovate existing stadiums)? An invitation to a powerhouse conference and the $30m-$40m annual media rights revenue share “isn’t walking thru that door” to quote a disgraced UMass alum, nor is the UMass version of T Boone Pickens walking thru that door with a $250m gift for athletic facility upgrades.
You can mock that definition of success, and perhaps it doesn't warrant the level of investment required to attain it. But yes, I'd say a modest bowl invitation is a realistic goal for UMass... and in general for "G5" level teams as a whole.
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Re: The Painful Truth-Good Intentions Gone Awry

Post by ZooMass84 » Sat Dec 05, 2020 7:35 pm

Excellent write up and I agree with everything BayAreaUmie said, but I can't, as much as I'd like for them to "pull the plug", see the administration dropping football or going back to FCS like Idaho. The reason is Academic Welfare. There are approximately 30 jobs associated with the football team that would go away forever, at the FBS rate, not the FCS rate. No one wants to kill the golden goose and as painful as the past 2 seasons have been, hope springs eternal.

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Re: The Painful Truth-Good Intentions Gone Awry

Post by ZooMass84 » Sat Dec 05, 2020 7:56 pm

PreecherJenkins wrote: Sat Dec 05, 2020 4:35 pm
dennisdent wrote: Sat Dec 05, 2020 2:03 pm
PreecherJenkins wrote: Sat Dec 05, 2020 1:19 pm BayArea- What a write up. Thanks for bringing real numbers to the table.

how much red ink did the four games this year cost versus not having games?
Sorry but those "real numbers" don't say anything. Here are the only "real numbers" that matter:

https://www.umass.edu/senate/sites/defa ... 0Final.pdf
Thanks for the link Dennis.

So football, brought in 8.802m spent directly 8.803m. Then because we had Football it cost us another 7.0m. Brilliant.
"it cost us"........when have you ever heard anyone in Mass. say "UMass football costs too much"? You've got the most bloated state gov't in the US where MassPort and the Courts and Mass State Police making $200-$400k per year. It's not like we personally have to pay for any of this stuff. It's taxpayer funds. The only asshole grousing is Dan Shaunessy of the Globe because his Holy Cross Crusaders play FCS in the Patriot League. He's jealous.

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Re: The Painful Truth-Good Intentions Gone Awry

Post by tom mclaughlin » Sat Dec 05, 2020 9:27 pm

It’s difficult to watch the football team struggle when I remember it being a source of great pride and UMass Football was
known for hard nosed and tough football players. Everything about the program was hard nosed and tough people. We
we’re admired throughout New England and had long standing rivalries. We competed and played hard.
Somewhere along the line things got off track. Awhile back I contacted the athletic department to recommend they look at
Joe Moglia as a head coach. Basically got no where and not even the courtesy of a return call. Now fast forward to today and
that same Joe Moglia has turned Coastal Carolina into a powerhouse and a nationally ranked team. They beat #12 BYU today and
put Coastal Carolina
Joe Moglia and I have been friends since 1965 and we played baseball on our high school team and we hung around together. He went
on to coach at Dartmouth and then make millions on Wall Street and then took TD Ameritrade from millions in sales to several Billion. Everything he touches turns to gold and I knew this and figured he’d be a natural in Amherst. I knew he knew how to build things and he would have built UMass just as he’s done at Coastal Carolina and in the process he would have raised millions to help build a program.
Oh what could have been. So when you see Coastal Carolina on Sports Center it could have been UMass if only the athletic department had returned some phone calls and interviewed Joe Moglia. Joe really wanted the job because he had respect for UMass from his years at Dartmouth. I never told any one about this but when I saw Coastal Carolina upset BYU and being Nationally ranked it brought it all back. I had also contacted Memphis and they also passed on Joe. Oh what could have been for them. Joe has been a winner wherever he’s been and congratulations to Coastal Carolina for everything they’re experiencing and building a great football program in this day and age. Joe Moglia would have been perfect in Amherst but too bad it never worked out.

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Re: The Painful Truth-Good Intentions Gone Awry

Post by dennisdent » Sat Dec 05, 2020 9:44 pm

tom mclaughlin wrote: Sat Dec 05, 2020 9:27 pm It’s difficult to watch the football team struggle when I remember it being a source of great pride and UMass Football was
known for hard nosed and tough football players. Everything about the program was hard nosed and tough people. We
we’re admired throughout New England and had long standing rivalries. We competed and played hard.
Somewhere along the line things got off track. Awhile back I contacted the athletic department to recommend they look at
Joe Moglia as a head coach. Basically got no where and not even the courtesy of a return call. Now fast forward to today and
that same Joe Moglia has turned Coastal Carolina into a powerhouse and a nationally ranked team. They beat #12 BYU today and
put Coastal Carolina
Joe Moglia and I have been friends since 1965 and we played baseball on our high school team and we hung around together. He went
on to coach at Dartmouth and then make millions on Wall Street and then took TD Ameritrade from millions in sales to several Billion. Everything he touches turns to gold and I knew this and figured he’d be a natural in Amherst. I knew he knew how to build things and he would have built UMass just as he’s done at Coastal Carolina and in the process he would have raised millions to help build a program.
Oh what could have been. So when you see Coastal Carolina on Sports Center it could have been UMass if only the athletic department had returned some phone calls and interviewed Joe Moglia. Joe really wanted the job because he had respect for UMass from his years at Dartmouth. I never told any one about this but when I saw Coastal Carolina upset BYU and being Nationally ranked it brought it all back. I had also contacted Memphis and they also passed on Joe. Oh what could have been for them. Joe has been a winner wherever he’s been and congratulations to Coastal Carolina for everything they’re experiencing and building a great football program in this day and age. Joe Moglia would have been perfect in Amherst but too bad it never worked out.
Thanks Tom for trying!!! Watching Coastal's smaller lineman manhandle BYU and the great play designs and execution was something you never see out of UMass football now.

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Re: The Painful Truth-Good Intentions Gone Awry

Post by McKinney » Sun Dec 06, 2020 1:26 am

I think it's possible that the decision was made with starry eyes and a naive projection of cash flows.

But it's also possible the decision was made due to strategic concerns given all the realignment throughout the 2000s into the early 2010s. And that while the potential financial opportunities were a motivator, it was not the justification.

This is the best documentation I could find that sums up the transition: https://www.umass.edu/newsoffice/sites/ ... FAQs_0.doc

Why is UMass leaving FCS and the CAA?
  • UMass has enjoyed great success and prosperity at the FCS level for many decades and has been very competitive since joining the CAA in 2007. However, the landscape of college football continues to evolve with recent conference re-alignments and widespread financial constraints.
  • With the recent changes in the CAA’s membership (adding Georgia State and Old Dominion coupled with the loss of regional and traditional conference opponents Northeastern, Rhode Island and Hofstra), UMass’ team travel costs would increase substantially over the coming years if it remained in the conference.
  • If UMass stayed in the CAA, football support would need to increase by an estimated $600,000 over the next three years. There would be limited to no opportunities for new revenue streams to cover these added costs as an FCS member.
  • Additionally, significant future investments would be necessary in order for UMass to stay competitive in the CAA, which is currently the best FCS conference. Moving to the FBS does generate new costs, but doing so also promises significantly greater revenues to cover these costs.
Why is this move being made?
  • We seek greatness in all that we do at UMass. Participating in FBS football, the highest level in the sport, is consistent with our role as the flagship campus of the Commonwealth. UMass is the largest public research institution in the state and has an expansive alumni base across the country. Playing in the FBS is a more accurate reflection of our presence in Massachusetts and New England.
  • This move also advances our intention to join the upper echelon of national public research institutions, most of which participate in FBS football. All of the Association of American Universities (AAU) flagship institutions play FBS football.
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Re: The Painful Truth-Good Intentions Gone Awry

Post by McKinney » Sun Dec 06, 2020 1:38 am

That said the finances should "make sense". Clearly the on-field performance has been a disaster for most of the FBS era. Surely this has had a negative impact on whatever attendance/interest was anticipated. And certainly, that has had an impact financially.

Bamford's comments to the Globe earlier this fall were interesting:
To the contrary, Bamford said, declaring the UMass football program was making financial progress before the pandemic. Last year, he said, the program received about $4.2 million, or nearly 47 percent, of its $9 million budget from university operating funds and student fees. That’s a marked improvement from the program relying in 2012 on school subsidies for $4.9 million, or 89 percent, of its $5.5 million budget.
https://www.bostonglobe.com/2020/10/06/ ... ce-riches/

So if the budget has grown by $3.5M while the subsidy has only dropped $700k, then it suggests most of the revenue opportunities that FBS has brought have been used to expand the budget rather than offsetting institutional support. This is contrary to what was pitched in the transition (which downplayed growth for subsidy reduction). I can see why this extent of support could be seen as contentious in this climate. I don't see it as indicative of failure though.

This is nominally speaking, assuming you don't apply the time value of money against the subsidy. Per USA Today data: FBS athletic department expenditures have grown ~6.2% per year on average since 2013-14 to 2018-19 and UMass' has grown at ~7.6%. It also is not accounting for the relative size of the subsidy ($4.9M out of $939M in FY12 to $4.2M out of $1282M in FY19).
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Re: The Painful Truth-Good Intentions Gone Awry

Post by Bay Area UMie » Mon Dec 07, 2020 3:02 am

dennisdent wrote: Sat Dec 05, 2020 2:03 pm
PreecherJenkins wrote: Sat Dec 05, 2020 1:19 pm BayArea- What a write up. Thanks for bringing real numbers to the table.

how much red ink did the four games this year cost versus not having games?
Sorry but those "real numbers" don't say anything. Here are the only "real numbers" that matter:

https://www.umass.edu/senate/sites/defa ... 0Final.pdf
Yes, I saw the Faculty Senate “Athletic Council” documentation dated 4/2/20 when conducting my admittedly non-exhaustive, one day research concerning UMass Football expenditures. I did not reference the specific FOOTBALL RELATED numbers listed in the “Statement of Revenue and Expenses” (my label, not UMass’...the top of their spreadsheet is labeled “fy19 athletics budget summary”) presented in the Faculty Senate report because: 1) they were only projected budgetary figures not actual reported expenditures for one year (2020), 2) the 2020 projections do not reflect the realities of the truncated season including the $1.9m lost guarantee from Auburn, lost gate receipts ($426k) and reduced road game travel costs (estimated budget $160k per game), and 3) the rev/exp document did not include aggregated totals over the very relevant nine year FBS period that I needed nor addressed capital expenditures and the debt related costs associated with facility improvements.

As a side, I think it is hilarious that “dennisdent” presents this limited, but arguably relevant budgetary data set presented to the Faculty Senate as “The Real Numbers,” and he/she offers absolutely no numerical references/calculations, accompanying commentary or conclusions and interpretations how "your numbers don't count"-thanks for the good laugh. That said, I am very happy to run some quick “back of the envelope” calculations on this Faculty Senate report/spreadsheet and present some brief conclusions to compare how “The Real Numbers”, stack-up to my original post that by inference “dd” suggests includes inaccurate or misleading data that "don't say anything."

Had “dd” read the Faculty Senate document (perhaps he/she did and the simple addition and subtraction required to complete an “analytical” assessment is beyond his/her quantitative capabilities) here are the obvious conclusions as they apply to the 2020 fiscal health of the football program and nine year period of Institutional support:
Projected 2020 Institutional Support:
(Subsidies/Shortfalls that are 100% captured within the Athletic Department football specific operating budget/p&l/expense&revenue statements as opposed to captured on the UMass, Amherst campus wide operating budget/p&l/expense&revenue statements (much more on this important accounting statement distinction later):
  • $2.4m: Student Fees (mandatory fees from cash strapped students to fund football activities)
    $1.9m Direct Support from the University’s Operating Fund
    $.6m Tuition Waivers (a true economic cost that the Board of Higher Education absorbs)
Grand Total PROJECTED 2020 Subsidy: $4.9m
(once again this is what appears directly as the required 2020 subsidy on the UMass Football budget/p&L/expense&rev statements within the athletic department budget it does not include additional football related expenses allocated/captured on the UMass, Amherst campus wide operating budget/p&l/expense&rev statements-I will explain this nuance in more detail shortly).

So, how does the above $4.9m 2020 subsidy compare to my original nine year projected annual range of $4m-$6m-pretty close.
Importantly, however, the truncated 2020 season necessitates the following adjustments to the projected institutional subsidy for this year:
  • $1.9m: Auburn game cash payment guarantee lost
    $426K: Home game gate receipts lost
    $320k: Reduced costs for team travel (2 road games canceled at the budgeted rate of $160k per game)
Total Adjustment to Institutional Subsidy: +$2m

So, the total 2020 subsidy as it appears on the Athletics Department financials is probably more like $7m ($4.9m+$2m due to one-time 2020 truncated season adjustments)! But, the really frightening point is that the REAL ACCOUNTING/CASH subsidies from the University to support the football program are much higher due to very flexible NCAA accounting reporting rules and standards.

Unlike publicly traded or privately held firms, NCAA member athletic departments do not have to adhere to very strict Generally Accepted Accounting Practices (GAAP) established by The Financial Accounting Standards Board (FASB) or even guidelines for government entities called Governmental Accounting Standards Board (GASB). The financial disclosures made available to the NCAA by most FBS schools are not audited by outside accounting firms.

The NCAA defined guidelines for athletic department accounting practices are called Agreed to Procedures (AUPS) that give member athletic departments’ wide latitude on where, ie what specific cost center, athletic expenses are recognized within a university’s cost accounting system. This is particularly true for capital asset expenditures, advertising, debt payments and many other football ancillary and direct expenses. My brief research indicates that most FBS University accounting systems don’t recognize major football related expenses (stadium upgrades, debt payments, advertising, football camps, alumni football related outings and other items) within the athletic department financial statements/cost centers but are assigned/captured/recognized as expense line items on the University’s total administrative budget-misleading yes, if you are trying to do a traditional economic impact analysis, but well within the NCAA AUPS/accounting rules.

Why is this important? Because it appears that the UMass internal accounting system has adopted these perfectly legal, but not very transparent AUPS practices that allow for many football specific expenses not to appear as spending/expense line items on the athletic operating budget but on the total UMass, Amherst operating budget/cost center. I had mentioned in my first post that the Globe claimed numerous football related expenses were captured not in the UMass Athletic department cost center but on the total UMass, Amherst budget/p&l/expense&revenue statements. Absent hard data from state sources, I opted to be conservative and not include these football “related expenses” allocated to the UMass, Amherst budget in my original analysis-the one exception was annual interest payment for debt services.

Given additional consideration and the fact that the “real-numbers” are theoretically university sanctioned from the Faculty Senate, I now believe these expenses need to be included in the economic analysis to identify accurate annual and the total nine year spending aggregates. The bad news, it really makes the fiscal situation worse than I originally thought.

Here are the football related line item expenses that are not captured on the athletic operating budget/p&l but appear on the total UMass, Amherst operating budget (source: Faculty Senate 4/2/20 Annual Athletic Council Report-see “Related Football Expenses” section on spreadsheet):
  • $525k: Other Football Expenses-summer and winter scholarship aid
    $2,670k: Debt Service on Football Facility (my original numbers assumed $1.3m, an understatement of roughly $1.3m per, or $12m over nine years)
    $1,116k: Annual Football Facility Operating Costs
    $1,175K: Additional Annual Female Scholarships (title ix compliance)
    $372k: Additional Gridiron Club Expenses (nutrition, technology other program enhancements)
    $500k: University Relations Marketing Assistance (advertising, student tailgates, BBQ)

Total 2020 “Related Football Expenses: $6.4m

To summarize, the annual subsidy across all university cost centers to fund 2020 FBS football activities appears to be $13.3m ($6.9m recognized on the Athletic Department operating budget/$6.4m captured on the UMass, Amherst total operating budget). And let’s not forget the impact these “related football expenses” have on the nine year aggregates. I conservatively estimated a range of $100m-$105m for the total investment over nine years of FBS participation, but many of these “Related” line items that I did not originally include appear to be legitimate recurring costs such as title 9 compliance expenses ($10m), facility operating charges ($10m) and I understated the debt service payments by half ($12m) and you could probably assume/include $500k per for advertising ($4.5m total over 9 yrs.), which might be understated because year 1/2/3 were probably higher ).

These reasonable back of the envelope calculations indicate a $135m-$140m investment over nine years. For what?...poor on field performance (much respect to the players and dedicated coaches), negative media exposure, missed budgetary projections and most importantly the lost opportunity to allocate and invest desperately needed funds in academic areas that directly improve the educational experience at UMass. In short, this whole FBS initiative appears to be nothing short of fiscal insanity.

In closing, I am not a practicing accountant so I certainly welcome one of the fine CPA’s or experienced MBA’s at an investment bank or corporate finance department who are part of the UMass community to complete a quick audit of my calculations for accuracy and to determine if I am in the ballpark so to speak. Additionally, I certainly welcome a member of the UMass Athletic department to anonymously add clarity to the financial data in this post and the previous one. And of course, I welcome some expert financial commentary from "dd" pinpointing why the numbers I presented "don't say anything"-I need another good laugh. All I am seeking is transparency, accuracy and truth. The financials look horrific.

Bay Area UMie
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Re: The Painful Truth-Good Intentions Gone Awry

Post by Bay Area UMie » Mon Dec 07, 2020 3:15 am

PreecherJenkins wrote: Sat Dec 05, 2020 1:19 pm BayArea- What a write up. Thanks for bringing real numbers to the table.

how much red ink did the four games this year cost versus not having games?
Excellent question...the only tangible data I located was for the 1st game, $50k appearance guarantee/$100k travel expenses (2020 budget called for $160k average travel expenses per road trip)...my guess, for whatever its worth, probably breakeven or some insignificant losses...can't really fault the athletic admin for playing a few games...especially, since it looks like there were no significant Covid related outbreaks among the team...kudos to the coaching staff, admin and the medical staff for implementing effective protocols that protected the kids.

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