FSU Athletics Budget and the USA Today Data - We Maxing out Credit Cards?

Oh the good ol' internets. Where bloggers can have disagreements via twitter over athletic budgetary data compiled by a 3rd party. David Wunderlich, of TeamSpeedKills.com (follow him @year2 and check out his piece on college revenues and profits), posited via twitter yesterday that, based on the USA Today story, FSU athletics were $16 million 'in the hole' or 'in the red.' This prompted me to say, based on the numbers in the story, "nuh uh, FSU over spent by 500k, strike that, over spent by 800K + last year, you are adding the numbers wrong, I'm adding them correctly, come at me bro." In the end, both of us were wrong. Though I'm not sure he is willing to say he agrees with this statement, I hope this article goes a ways in convincing him.

Inside we'll figure out why I was WAY off with my 800K number and why saying FSU athletics is $16 million 'in the hole' is also not accurate.

First up, the chart. I took a screen grab of the FSU data from the USA Today info you can find here. Click on the + symbol found next to each school and all sorts of nice numbers pop up. For our purposes, I have highlighted numbers that we will refer to as we go (made it as big as I could, probably better off clicking on it and looking at it in another window).

The first discrepancy between us can be found at 1, student fees, year 2011. For the purposes of figuring out which programs are 'profitable' these numbers are removed following NCAA guidelines. In Florida State's case, the entire $7.5 million is paid by students when they pay their tuition. This is the athletics fee that all students should be familiar with. Students do not pay (unless they chose to buy better seats) for tickets to any Florida State athletic event, including football. All students, including grad students pay up front as part of tuition, whether they attend any sporting events or not.

For other teams like Alabama, for the past 4 years, they have reported $0 student fees. I'm guessing that students pay reduced prices for football and most likely other sports. And again you have a school like Auburn, that while they charge for football, they also collect student fees/athletic fees.

These student fees are not eligible revenue when contemplating how profitable a program is. Even though in FSU's case, it is basically the same as other programs that charge student admission to athletic events, the difference being FSU can't report it as 'ticket sales.' However, this does not mean that you remove these funds, in FSU's case $7.5 million, from the athletic budget. Indeed, as you can see from the chart, they are included in the total revenue (2) available to the athletic department. For it to count towards an actual 'hole' or to count towards FSU's athletic operations not being able to pay bills, these funds would simply have to not exist.

My error when first looking at the data was even worse. I added the student fees to the revenue before clicking on the '+' to see that they were already combined. This gave me a much higher number for revenue which fueled my "FSU only spent 800K over budget" comment which was oh my goodness so, so wrong.

Now, let's move past all that and dive in a bit further shall we? Understanding how the student fees works is only a portion of the $16 million 'in the red' comment. We still have a large portion to wrap our heads around.

Believe it or not, FSU athletics used to make money. It was profitable. This built up cash reserves. Exactly how much is unknown to me. I would call Spetman but I understand he isn't taking questions right now. As we can see from the data, from 2006 to 2010, FSU netted almost $19.9 million in reserves from athletic operations. Not sure what the total reserves were prior to 2006, but hopefully the $19.9 added to a healthy total. Hopefully.

Now we get to 2011. What in the world caused FSU to see such a dramatic increase in expenditures over the previous year (4)? Are we running everything at FSU on a Capital One card? The answer is no. The university saw fit to spend existing funds for substantial facility improvements (3). The practice fields got a long over due, much needed overhaul. Original price tag was $2.5 million though I believe the final price had substantial overruns. Sounds pricey, but 3,000 dump trucks full of red clay removed, new drainage system, etc. Needless to say, that kind of operation is expensive. Another substantial project finished in 2011, the FSU weight room. FSU, though there is no new building to point to and drool over, spent a substantial sum on facility improvements. Important to note, these are planned expenditures for facility improvements that are part of an approved budget. As you can see, the normal buildings/grounds budget is in the mid $11 million range and it swelled to almost $21 million. I'm guessing 2007 and 2008 were more because we got those awesome new video screens and ribbon boards in the stadium (this is pure speculation).

So again, the question. Is FSU $16 million in the red or $16 milion in the hole? The answer is simply no. FSU is not going to have to reduce its budget by $16 million or the $7.5 million or get millions from the state (never happening) to pay for staff, planes, and powerade. Though if FSU does not choose to do more athletic renovations, it will go down by the cost that was associated with 2011 renovations or even up if it is decided funds should be spent in 2012 on more (seriously doubt this unless major *AHEM* changes are made).

Now, having gone through all that, is everything A OK at FSU? That answer is also no. FSU expenses are rising and seem to be outpacing revenue. But it is important to note, FSU's athletic budget is planned out in advance based on revenues. That is what prompted the 'potential' $2.4 million dollar shortfall talk from FSU admin. That is for a future budget in which funds have yet to be spent. They will not ever get to mid year scenario and say, "Holy crap, we are $16 million in the hole, fire Jimbo's army of support staff, sand volley ball was a bad idea, and crank FireCoachHam.com back up." No, instead they just won't give Ham or his staff a raise or contract extension next year. Awesome.

You can see from the data (5) scholarship expenses have increased a significant amount. As the state continues to either raise tuition or allow the university to raise tuition, this expense will continue to rise accordingly. Coaching salaries have gone up (6) as FSU has had to fend off schools willing to pay ridiculous amounts for players coaches. 'Other expenses' has greatly increased since 2008, even though it fell off a couple million this past year. Jimbo Fisher, "aint not going to recruit the right way." It also make sense looking at the data, why FSU wants the entire indoor practice facility to be funded by new booster/fan contributions. It appears FSU is not willing to dip into reserves to pay for anything in the near future. Except potential $2.4 million shortfalls. Maybe.

Coley Harvey, while not going into depth on facility improvements has a lot more info on FSU's finances and why FSU should kidnap all the SEC schools and hold them hostage until they let us join their stupid club.

I hope this clarifies FSU and its associated budget in the USA Today story. If you removed the $9 million or so for renovations, FSU would have actually netted over 600K, but still not been profitable by NCAA or USA Today standards. Right? Right. We make over half a million but not profitable. Clear? Clear. Thanks to David and his willingness to go back and forth with me on the Twitter, otherwise this story wouldn't exist and we'd all be ready to fire Randy Spetman.