Athletic department lost almost $4 million in 2011-12

University of Tennesee Chancellor Jimmy Cheek, left, introduces Dave Hart as the university's new vice chancellor of athletics and athletic director in a press conference at Neyland Stadium on Monday, September 5, 2011. Hart replaces Mike Hamilton who resigned in June. 
  
 (Saul Young/News Sentinel)

Photo by Saul Young, copyright © 2011

University of Tennesee Chancellor Jimmy Cheek, left, introduces Dave Hart as the university's new vice chancellor of athletics and athletic director in a press conference at Neyland Stadium on Monday, September 5, 2011. Hart replaces Mike Hamilton who resigned in June. (Saul Young/News Sentinel)

REVENUES

Tickets $37,753,467

Donations $23,652,836

Marketing/IMG $9,737,410

SEC $20,208,777

Concessions/Souvenirs $3,024,782

Licensing $2,800,000

Endowment Interest $1,385,533

Student Fees from Campus $1,000,000

All Others $5,450,972

Camp Revenues $1,471,599

Total $106,485,376

EXPENSES

Salaries & Benefits $37,285,629

Scholarships $9,529,062

Operations $38,970,147

Debt Services $10,523,881

Sales Tax $3,044,448

City/County Tax $1,552,922

Arena Deficit $1,720,322

University Support $6,392,000

Camp Expenses $1,448,241

Total $110,466,652

Revenue:$106,485,376 Expenses: $110,466,652 Net Deficit: $3,981,276

UTAD TRANSFERS TO UNIVERSITY

Transfers To Knoxville Campus

Volunteer Scholarships $1,000,000

Graduate Fellowships $800,000

Student Success Center $200,000

Band Scholarships $75,000

Discretionary Funds $1,875,000

Total $3,950,000

Student Fee Income: $1,000,000

(As voted by the student body)

Net $2,950,000

UTAD Transfers To UT Entities

UT Plane Support $160,000

Agriculture Campus Professorship $107,000

Discretionary Funds

— Chattanooga $175,000

— Martin $175,000

— Health Sciences $455,000

— Agriculture $245,000

Net $1,317,000

UTAD TRANSFERS FOR PARKING GARAGE debt

11th Street Garage $400,000

G10 Garage — First Phase $285,000

G10 Garage — Second Phase $240,000

Lake Ave. Garage $100,000

White Ave. Garage $100,000

Net $1,125,000

Total Transfers To UT: $6,392,000

Net Transfers To UT: $5,392,000

UTAD Debt Service payments

Thompson-Boling Arena $1,558,825

$457,889 for original project in 1987 and $1,130,936 for renovations in 2007.

Lindsey Nelson Stadium $26,129

Fleming/Siler Properties $215,012

Includes the land on which the soccer and softball stadiums are constructed.

North End Zone Expansion (1996) 1,126,588

Thornton Center Building $168,752

Neyland Stadium Skyboxes (2000) 2,002,323

Regal Soccer Stadium $348,716

Allan Jones Aquatic Center $943,894

Neyland Stadium (2005-10) $3,902,730

Sherri Parker Lee Softball Stadium $200,941

Total $10,523,881

Source: University of Tennessee

The University of Tennessee athletic department saw its already strained financial reserve shrink under $2 million following the 2011-12 fiscal year, the university announced Monday.

The department reported revenues totaling $106,485,376 against expenses of $110,466,652, creating a deficit of 3.98 million. The shortfall, which the department said in a release was "anticipated," shrank a reserve nest egg of approximately $5.5 million that athletic director Dave Hart has voiced concern over throughout his first year at UT.

"We didn't know the degree it would be, but we knew all year that we were probably going to have some deficit this year," said UT Chancellor Jimmy Cheek at a two-day board of trustees workshop in Nashville. "We have reorganized the athletics department, we have downsized the department, so those all had some cost savings with them.

"We will continue to look at all operations and see where we can reduce expenditures this year. We're also going to work as hard as we can to increase revenue this year, and that's from ticket sales, athletic competitions and donors. At same time need to make critical investments to make sure our programs are moving in a positive direction."

In April, Hart told the News Sentinel, "I look at the people we are competing against to build a championship-level program, and those people have reserves of $50 to $100 million. We need to focus and prioritize long term."

UT's release Monday stated that "multiple components related to the historical budget model for athletics at UT that are contributing factors to the current financial situation and the lack of a reserve."

Among those components are an annual minimum gift of $6 million to from the athletic department to the university system, a total of $21 million paid from the department to the university for everything from scholarships to event parking passes, $200 million in outstanding debt related to facilities, significant contract buyouts to former athletic personnel such as Bruce Pearl and Mike Hamilton, among others; fixed costs such as scholarships and utilities, and tax rates that UT claims create a "significant burden."

"We had said we'd look at some of those transfers in the future, and see if any modifications can be made," said Cheek, speaking about the athletic department covering various costs.

Regarding the taxes, the athletic department reports that a tax rate of 14.25 percent on ticket sales, including a 9.25 percent state sales tax, a 4.5 percent city tax, and a 0.5 percent county tax amounted to a $4.6 million bill. The UT release said this "heavy rate of taxation" is uncommon and that "peer institutions" pay "significantly less or nothing in this category."

According to the release, UT's turbulent financial state is being addressed by the now-completed merger of the men's and women's athletic department and the "restructuring of the department and elimination of positions … made as part of an overall strategy to streamline athletics operations."

Other avenues being used to bolster the department's financial footing include reevaluating "a variety of non-athletic scholarships" funded by athletics, allocating a larger portion of licensing revenues to the department and "adopting a better model for the transfer of money from athletics to the campus," and allocating all new SEC revenue only to athletics.

"We're also going to work as hard as we can to increase revenue this year, and that's from ticket sales, athletic competitions and donors," said Cheek. "At the same time, we need to make critical investments to make sure our programs are moving in a positive direction. I think Chancellor Hart has talked a great deal about making athletics healthy, and in particular making football healthy because it is a significant revenue generator in the budget. "

According to UT athletic director for communications Jimmy Stanton, following the completion of the most recent SEC television contract in August of 2008, the department pledged $1 million a year for 15 years to university academics, with $800,000 going to graduate fellowships and $200,000 to UT's Student Success Center, which operates to benefit non-student-athletes.

In a study of revenues and expenses from 2006 to 2011 at NCAA Division public schools compiled by USA Today, Tennessee ranked eighth nationally in total revenue ($104, 368, 992) and eighth in expenses ($97,580,406).

Brendan F. Quinn covers Tennessee men's basketball. Follow him at http://twitter.com/BFQuinn

Megan Boehnke contributed to this story.

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Comments » 89

WetumpkaThumpa writes:

There hasn't really been any reason to attend UT sporting events the last few years. Most of the games are on television and the product isn't really special anymore. Mike Hamilton pretty much ruined things for me. Glad to see someone else running the Athletic Department.

DeltaCharlie3 writes:

My man Z's, the Paul Ryan on our ticket, is going to knock this one out the park!

And yes, that makes me Romney.

Ichabod writes:

Congratulations Hammy - you succeeded in totally ruining a once proud program. It will take a decade to recover......

Millisa writes:

All Hamilton and Dooley's fault. Fire Dooley ASAP.

GerryOP writes:

Hamilton knew "numbers." Not sure Hart is all that good with "numbers." Hammy would have made the numbers work ... somehow.

UTByrd writes:

I think that last year only 12 Div. I athletic programs made a profit and UT was in that group. Not bad considering the world was on the brink of another Great Depression a few short years ago. I believe Hart has us going in the right direction.
Go VOLS!!!!!

BIVOLAR_BEARE writes:

Man, that look on Hart's face reminds me of Andy Garcia in Ocean's 11 when he realized he had been robbed..Heads will definitely roll if the FB attendance continues to fall.

creekroad writes:

It is simply about a product, and I'm not just speaking of wins & losses....it includes seats that are comfortable, parking that is convenient and treating the fans like customers...this has been coming for a long time....we had a great franchise and we gave it away.....we booted the alumni in favor of the Big Orange Club and box seats and now we have no loyalty...cutting expenses instead of improving the product will only continue to demenish the franchise. So sad to watch.

civilianvol_formerly_marinevol writes:

in response to DeltaCharlie3:

My man Z's, the Paul Ryan on our ticket, is going to knock this one out the park!

And yes, that makes me Romney.

I wondered why your likability rating was so low.

Prostar writes:

Buyouts are part of the problem, and who but Mike Hamilton created the biggest buyout of them all when he extended Fulmer's contract and then fired him some months later. Pearl's buyout not too much of a concern which is why I don't look for anything to happen to Coach Dooley after this year which could be a good thing and add some stability to the program. Don't get me wrong, I support Dooley and this staff. I supported he who shall remain nameless also. I think Coach Dooley and staff are recruiting quite well. Consider this, Fulmer's last recruiting class was ranked something like 42nd nationally and even with all out turmoil we've never done that bad since.

tomoleigho#364236 writes:

No, Really. $106M is not enough to run the athletics department.

Really.

BIVOLAR_BEARE writes:

in response to BodeaneVol:

(This comment was removed by the site staff.)

zz, I've got to admit that was funny..

volistic writes:

in response to BodeaneVol:

(This comment was removed by the site staff.)

I'm not sure who that message is from, but at least we know it's not from Osama bin laden, don't we?

volistic writes:

in response to BIVOLAR_BEARE:

zz, I've got to admit that was funny..

Yeah, I'm sure al qaeda thinks it's funny too. Whatever happened to them?

BIVOLAR_BEARE writes:

in response to volistic:

Yeah, I'm sure al qaeda thinks it's funny too. Whatever happened to them?

Aren't they those winged insects that hatch every 25 years or so??

Huttdawg100 writes:

This shows the need for a combined Athletic Department. There's no sense in paying two people for a job one person can do.

Hamilton ran this thing in the ground!

civilianvol_formerly_marinevol writes:

in response to BIVOLAR_BEARE:

Aren't they those winged insects that hatch every 25 years or so??

Nothing to joke about, man. Actually, al qaeda is almost nonexistent now thanks to the sacrafices of some brave young Democrat, Republican and Independent (like me) American warriors. Now come on guys, leave politics off this site. Let's all be American Vols fans, and leave that BS for another forum.

mocsandvolsfan writes:

Give me $106 mill.! I'd know what to do with it.

BIVOLAR_BEARE writes:

in response to civilianvol_formerly_marinevol:

Nothing to joke about, man. Actually, al qaeda is almost nonexistent now thanks to the sacrafices of some brave young Democrat, Republican and Independent (like me) American warriors. Now come on guys, leave politics off this site. Let's all be American Vols fans, and leave that BS for another forum.

I walked some of the same dirt as you in Desert Storm..Retired 1st Sgt. USA..HOOAH!

civilianvol_formerly_marinevol writes:

in response to BIVOLAR_BEARE:

I walked some of the same dirt as you in Desert Storm..Retired 1st Sgt. USA..HOOAH!

Way to go, sir. I knew we were on the same team in more ways than one. Go Vols!

mtthw741 writes:

This is not good news for the fans who want Dooley gone. There's now way they can buy him out at this point. Especially with Haslem spending his money in Cleveland.

tennrich1 writes:

in response to BodeaneVol:

(This comment was removed by the site staff.)

Thar he is....Thar he is....Now you know as well as I do Bodeane that Coach Dooley cant do cartwheels BUT that's your ole sinful nature coming out...Lying!!!!

tennrich1 writes:

in response to BodeaneVol:

(This comment was removed by the site staff.)

For once Bodeane you actually made sense....and were funny!!!!

civilianvol_formerly_marinevol writes:

in response to mtthw741:

This is not good news for the fans who want Dooley gone. There's now way they can buy him out at this point. Especially with Haslem spending his money in Cleveland.

I've been out of touch for a few weeks, did Haslem really buy the Cleveland Browns? I thought he was going to buy the Titans from Bud Adams.

civilianvol_formerly_marinevol writes:

in response to BIVOLAR_BEARE:

I walked some of the same dirt as you in Desert Storm..Retired 1st Sgt. USA..HOOAH!

I left something out of my previous reply, Top. OOORAH!

lemme_axya_this writes:

in response to BodeaneVol:

(This comment was removed by the site staff.)

That's hilarious, but I would still like to waterboard you, just for sport

GerryOP writes:

I expect lil' ZZGataBoy to show up here any minute and recommend a bake sale outside of Neyland every game day as the way to narrow the deficit. The ideas that come out of that little fella's little brain never cease to amaze me. And to think that he actually posts those little thoughts from his little brain on here. We are so fortunate.

BIVOLAR_BEARE writes:

in response to civilianvol_formerly_marinevol:

I left something out of my previous reply, Top. OOORAH!

You Marines are alright in my book..Semper Fidelis (Always Faithful, Marines) and Semper Anticus (Always Forward, U.S. Army) together we've taken some soil in foreign lands..Thank you for your service as well..Salute!

BMSvol writes:

in response to volistic:

Yeah, I'm sure al qaeda thinks it's funny too. Whatever happened to them?

actually, al'qaeda is still murdering our soldiers every day dressed in their afghan military uniforms.

luckily, all that stuff gets buried behind the real news like prince harry getting naked in his hotel room, or what the kardashians are wearing today.

lemme_axya_this writes:

in response to mtthw741:

This is not good news for the fans who want Dooley gone. There's now way they can buy him out at this point. Especially with Haslem spending his money in Cleveland.

I wonder if they're still paying Tim Couch.

civilianvol_formerly_marinevol writes:

in response to BodeaneVol:

(This comment was removed by the site staff.)

Well, I guess my dad was right, and there really is some good in everyone. You should be able to appreciate the fact that I'm about to head off base (Camp Geiger) to beautiful downtown Jacksonville, NC to mingle with the Wolfpack fans.

orangeman1 writes:

Ticket sales and donations arent keeping up. Better get some bigger name schools to play home/away, bring in former great players, start winning football games, and get more donations. The shape the AD is in now, I dont see them firing Dooley unless he has a losing season. They also have 7 new asst coaches whose contract would probably have to be bought out. I just hope Dooley will start winning and generating a buzz so UT can get back to competing for the SEC like in 2007.

orangeman1 writes:

in response to ClabosFake:

(This comment was removed by the site staff.)

There would definitely be an uproar with the fan base should we lose, but even if we win, there is no telling how the season will turn out. Dooley needs to win at least 7 reg season and a bowl. Hopefully, they can pull an upset. UT hasnt beat a ranked team since 2007, and if we lose to NCst and beat a ranked Georgia,SC, or Bama things will be fine.

tnaseevol writes:

This just in:

Large cokes at the UT Football games this year will now be $10.00 each. Bottled water will be $5.00 per bottle.
Hot dogs will be going for $10.00 each, and if you want condiments with it--that will be $1.00 more.

BIVOLAR_BEARE writes:

in response to tnaseevol:

This just in:

Large cokes at the UT Football games this year will now be $10.00 each. Bottled water will be $5.00 per bottle.
Hot dogs will be going for $10.00 each, and if you want condiments with it--that will be $1.00 more.

Smuggled in Moonshine..Priceless.

tnaseevol writes:

in response to DeltaCharlie3:

My man Z's, the Paul Ryan on our ticket, is going to knock this one out the park!

And yes, that makes me Romney.

Looks like some fool cannot stay on topic...

"And yes, that makes me Romney"

No sir, that makes you an unmitigated @$$O.

civilianvol_formerly_marinevol writes:

in response to BodeaneVol:

(This comment was removed by the site staff.)

Semper Fi. I'll give J'ville your best. By the way, there's a new column by John Adams saying Dooley may get SEC Coach of the Year. You really need to give your input.

tnaseevol writes:

in response to BodeaneVol:

(This comment was removed by the site staff.)

Now I know why your likability is non existent.

lemme_axya_this writes:

in response to BIVOLAR_BEARE:

Aren't they those winged insects that hatch every 25 years or so??

Heh heh heh, I missed that one earlier.

underthehill writes:

in response to GerryOP:

Hamilton knew "numbers." Not sure Hart is all that good with "numbers." Hammy would have made the numbers work ... somehow.

What was Hamilton paid and what is Dave Hart being paid? Hart is not the only person that is not all that good with numbers...

thevoice writes:

Better start selling beer at games. That should help. Probably not too far off in the distance when the State of TN and/or UTAD realizes how much money they're missing.

BIVOLAR_BEARE writes:

in response to thevoice:

Better start selling beer at games. That should help. Probably not too far off in the distance when the State of TN and/or UTAD realizes how much money they're missing.

I don't know if colleges can do that without proper licensing..I know Vandy had a problem with that issue when they played UT at the Titan's stadium a while back..But, pro stadiums can sell alcoholic beverages regardless who is leasing their facility..It's all head in the sand hypocrisy that university president's actually believe no one drinks alcohol at these games..So, why not make some extra coin off of 80,000 alcohol drinkers..I totally concur.

stevefrommemphis writes:

In the aggregate, UT did not lose money on athletics when you consider that $27 million was transferred from the athletic department to other university accounts. The incremental cost to the university of those scholarships awarded to athletes is pretty small.

GerryOP writes:

in response to BodeaneVol:

(This comment was removed by the site staff.)

Nope, not blind. Can't see as well today as I could when I was 20, or 30, or 40, or 50, or... but not blind. Did I miss something? I'm still waiting for your silly little cupcake post. The little silly ideas that come out of that little mind of yours are always ... at least ... amusing.

arkansasvol1975 writes:

Everytime I watched a UT game, I seen alot of empty seats that where all filled couple years ago. I don't care what the UT sports department puts out on attendance, I know what I see...empty seats is empty seats and that is money. I have been a UT fan since 75' and the stadium has always been full, Hart needs to grow a pair and do something about it.

tovolny writes:

Look,the position of athletic director at just about any school is not needed. The perfect person with the perfect background and experience does not exit. WE SHOULD DO AWAY WITH ATHLETIC DIRECTORS. We need a CPA and business manager person to macro manage just the business portion. Managing the coaches should be done by the university presidents. Our President has about three floors of assistants and clerical people who could maintain records. If a coach does not do his job, people are going to know it. If a change is needed, the president could ask the CPA type person about the funds available and then he could gather up a few people from each floor to form a committee and go find a coach.

If I am not mistaken, most Athletic Directors are ex-jocks that warmed a lot benches that worked at some other university as an assistant to then moved up to assistant (of), etc.

We had a couple of AD's that were decent in Bob Woodruff and Doug Dickey. Georgia had Vince Dooley; Arkansas had Frank Broyles. Dooley and Broyles; and ole Bobby Dodd might be rated as the best AD's ever. I believe they concentrated on coaching first and fit some AD shores during the football doldrums of late winter/early spring. They definitely didn't work at it full-time. So, looks to me like we don't really need a spit and polish PR man to pose as an almighty BIG DUDE ON CAMPUS. Get rid of them. If UT needs some help hiring and firing coaches, they can always call me. Paul Harvey would have written this if he were still alive.

tovolny writes:

Does not "exist" not "exit" ...but, on the other hand......

tennezz writes:

Has anyone checked to see if we qualify for a disability check!

GerryOP writes:

in response to arkansasvol1975:

Everytime I watched a UT game, I seen alot of empty seats that where all filled couple years ago. I don't care what the UT sports department puts out on attendance, I know what I see...empty seats is empty seats and that is money. I have been a UT fan since 75' and the stadium has always been full, Hart needs to grow a pair and do something about it.

Have you seen any empty seats this year? Didn't think so. You're like those silly Gata guys ... always tellin' us how great it was and how great it's gonna be. About the last couple of years ... they don't have so much to say.

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