Financing College Athletics – Part 4

RECAP OF PREVIOUS ENTRIES

– The US Dept of Education collects information on financing college athletics from colleges/universities and makes this information publically available at Equity in Athletics (EIA). Most articles you see on this subject take their information straight from this website with an unstated assumption that this information is uniformly prepared and provides complete disclosure. In Part 1 and Part 2 we introduced everyone to this raw data source, summarized the data from State, and showed that one should be very careful when making assumptions on uniformity and complete disclosure.

– In Part 3, we summarized the infomration from EIA for the entire ACC for easy comparison. Even though we know that these numbers don’t necessarily provide the whole story, the numbers for State were quite disconcerting.
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NC STATE SPECIFICS

This entry was supposed to be a short piece supplementing the information we found at Equity in Athletics (EIA) to provide as complete a picture as possible on NC State’s athletic finances. However, once the entry grew to 6+ pages, I decided to break it into two parts. The next installment is nearly ready and will be up in a few days.

Let’s get started with a few nuggets from the interview with Debbie Yow that concluded Part 3:

….One thing right off the bat is that their budget is one of the smallest budgets that I’ve ever seen per sports expenditure. That’s how I would judge it for 23 sports. This is very lean, I would say too lean [of an] operation….

It shouldn’t be hard to see where Debbie drew her conclusions:

– State has the lowest reported operating expenses in the conference for football as well as men’s and women’s basketball.

– State ranks 5th in the conference in total number of athletes and 11th in the conference for total expenses.

Now we are not going to get hysterical about these numbers because we know that they don’t necessarily tell the whole story. But just because the real rankings MIGHT be different, that doesn’t necessarily mean that they ARE.
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In response to Dave Glenn’s attempt to belittle the financial support from State fans, Debbie Yow responded:

…Well I don’t think any of us know how much money is raised every year. I mean, how do we know that? The Wolfpack Club is separately incorporated…

While I appreciate anything or anyone that puts Dave Glenn in his place, Yow also brings up a very good question. Another good question is why are the Wolfpack Club’s finances such a secret? It doesn’t take long to discover that other booster clubs are not run in secret:

– The annual report from the Ram’s Club shows that they raised:
Annual Fund: $11M
Scholarship Endowment: $5M
Capital Projects: $5.2M
Sport Endowments: $0.7M
Carolina Forever: $1.8M
Total Gifts and Pledges: $23.8M

– The Seminole Boosters

account for more than $10 million in annual funds, plus at least $15 million per year in capital gifts. The Seminole Boosters Scholarship Endowment has nearly $26 million under management…

I quit looking for information about Booster clubs when the first two ACC schools that I looked at (other than the Wolfpack Club) had plenty of information readily available. It gets even more confusing when these types of numbers for the Wolfpack Club are given out in an interview with Bobby Purcell:

…In 2006, the Wolfpack Club raised a record $25 million…

So let me get this straight….the Wolfpack Club’s numbers are not necessarily a secret, but we aren’t going to talk about them much either. (Gotcha!)

There’s a lot we don’t know about that $25M in 2006, but we can break this total amount down into the following generic categories:
– Annual dues and endowment receipts
– Gifts to specific capital campaigns
– Lifetime Rights Payments
– Other one-time donations

Having annual donations to the Wolfpack Club that are in line with both UNC and FSU is “good”, but may not be the entire picture. The real question is one of trending and whether or not the record setting 2006 total was a one-time spike or an indication of continuing growth in donations to the Wolfpack Club. While we don’t have the complete picture, we can peel back a few layers and take a closer look at the $25M given in 2006.

Let’s start by listing the capital campaigns undertaken at State over the last 10 years or so. I’m not going to try and break down the responsibilities for these projects between the athletic department and the Wolfpack Club because ultimately the money to pay for the projects comes from the exact same place….the Wolfpack fans that Dave Glenn was so quick to criticize.

NOTE:
With the exception of the Vaughn Towers, all of the dollar values and dates were taken from gopack.com or wolfpackclub.com before the sites were renovated; which unfortunately removed the articles that I got the information from. Most of these numbers were either estimates or fund raising goals. The actual construction costs may be different (probably higher). For instance, the Red Zone campaign had a fundraising goal of $15M, but the final costs came out to $19.7M. If I’ve overlooked a capital campaign or major facility improvment, please make note of it in the comments.

$180M worth of capital improvements over the last 12 years is very, very good by any measure. However, I found the figure “$180M” quite coincidental for several reasons. This is also the same figure thrown around in the various articles summarizing Debbie Yow’s 16-year tenure at UMD. Going back to the blurb from the FSU boosters, “at least $15M/year” for 12 years would also total $180M. So while the total raised and spent by State’s athletic department and/or Wolfpack Club is still good, it is not an unheard amount raised by other universities of similar size.

When you look at the chronological order of the capital campaigns, it’s not surprising that giving in 2006 set a record. The NEZ seats were completed that year and this was the last capital campaign that was at least partially funded by the sale of LTR seats. So if we assume that the majority of LTR holders took advantage of the 10 year payment plan, the total LTR payments from the RBC Center, Carter-Finley, and Doak Field would have hit their maximum level in 2006. The LTR payments would have continued on at about the same total through somewhere around 2008-2010 when the earliest LTRs would have been paid off. Using rough estimates of LTR seats sold and their cost, I would put the total LTR payments in 2006 at somewhere around 40%-50% of the reported $25M in donations.

Obviously, as the LTR seats are paid off, we would expect total donations to the Wolfpack Club to decrease. Dwindling revenue to the Wolfpack Club from LTR seats being paid off is not a concern as long as the debts from capital campaigns are being paid down at the same rate. Since the local media isn’t screaming about State defaulting on loans, there is every reason to think that this process is proceeding as originally planned.

In addition to the successful and far-reaching capital campaigns, State fans have also:

– Made the Wolfpack Club one of the largest booster organizations in the nation. (The Wolfpack Club broke the 20,000 member mark in Dec 2007.)

– Sold out Carter Finley for 10 straight years from 2000-2009. (Though there are still tickets for sale for the upcoming season.)

– Ranked in the top 25 nationally in men’s basketball attendance every year since the ESA/RBC Center opened.
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CONCLUDING THOUGHTS

Let’s review Dave Glenn’s summary of NC State fans and their financial support:

When we look at the big picture of college athletics, obviously booster donations are a big part of paying all of the bills these days. We know on the one hand that NC State has one of the most populated booster organizations. But we know on the other hand in terms of total dollars, that the Wolfpack is not as high on that list.

I don’t know what Glenn is using for his measuring stick, but I think that he is full of $#@!. (BTW, this isn’t a new conclusion.) Combine the numbers presented here with the numbers presented last week in the Director’s Cup results and I see:

– $180+M dollars of capital improvements financed by State fans since 1999
– Outstanding attendance in both football and men’s basketball
– All too often, absolutely horrid results on the field/court

There are areas at State (academics, management, and athletics) that need to be improved…many of which are frequently discussed on the main blog and in the forums. But from I sit, the financial support from the fans for NC State athletics over the last decade is NOT an area that warrants criticism.

So far we’ve looked at the financial numbers reported at Equity in Athletics (which don’t paint a rosy picture) and looked at Wolfpack Club donations and facility improvements (which look quite impressive to me). The next entry will add a few more pieces to the puzzle and wrap up what we know and summarize some remaining questions about financing athletics at State.

Part 1
Part 2
Part 3
Part 5