UT ATHLETIC DEPARTMENT FISCAL YEAR 2011-12
Endowment Interest $1,385,533
Student Fees from Campus $1,000,000
All Others $5,450,972
Camp Revenues $1,471,599
Salaries & Benefits $37,285,629
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
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
Student Fee Income: $1,000,000
(As voted by the student body)
UTAD Transfers To UT Entities
UT Plane Support $160,000
Agriculture Campus Professorship $107,000
— Chattanooga $175,000
— Martin $175,000
— Health Sciences $455,000
— Agriculture $245,000
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
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
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.