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IPTAY Finances and CUAD Budget FY10

Must get their money...must get their money...must get their money.

Championships begin with 'competitiveness'!
Must get their money...must get their money...must get their money. Championships begin with 'competitiveness'!

Like last season, we take the time after the big sports are over to look into various things around Clemson's athletic department, such as the budget. Last year we gave you the IPTAY budget for 2007-2009 and a comparison of Clemson's AD budget with other opponents (i would open those in new tabs for comparison). Here, we're going to update that information for the FY that ended in June 2010 (July 1 2009-June 30 2010), and includes the 2009 football season only. The current fiscal year is not finished.

The Mandate of IPTAY, from Rupert Fike

"to provide annual financial support to the athletic department at Clemson, and to assist in every way possible to regain for Clemson the high athletic standing which rightfully belongs to her."

In accordance with the IPTAY Constitution (Article IV-2), the four priorities of IPTAY are as follows:

  1. The payment of the annual cost of athletic scholarships.
  2. The payment or reimbursement of the operating expenses of IPTAY.
  3. The establishment and maintenance of an adequate reserve fund deemed appropriate by the IPTAY Board of Directors.
  4. Any expenditures other than those established under the previous three priorities, shall be limited to either direct or indirect aids to the athletic program of Clemson University and must be approved by the IPTAY Board of Directors.

It would be nice if Clemson had the leadership quality of Dr. Edwards or Fike right now.

Donor Level 2007 2008 2009 2010
Purple ($140) 4217 3901 3912 3540
Orange ($350) 3915 2725 2636 2564
Champion ($700) 2092 2359 2187 2116
Tiger ($1400) 3406 2604 2059 2030
Howard ($2100) 652 1450 1192 1120
IPTAY ($2800) 1364 2255 2298 2065
Jervey ($4200) - - - 238
McFadden ($5600) 113 361 338 289
Fike ($7000) 183 286 271 262
Heisman ($10000) 201 315 289 290
Total 16,143 16,256 15,182 14,514

Recall the SEP was initiated in 2008 cycle, and the drop in 2009 can be partially attributed to fan discontent to the new seating policies. Jervey is a new level for 2010 and is obviously intended to fill the gap between IPTAY and McFadden donorship levels, as you can see the significant dropoff between the two in terms of membership. It does not appear to have had the desired effect. Membership stats for the lower levels like Tiger Cub/Collegiate Club were not provided.

Other factors affecting membership numbers include the economic downturn, tax changes, and the results on the football field. I suspect that small business owners tend to give in the middle membership levels moreso, and economic downturns hit them very hard. This may be why so many stopped giving altogether.

In the long run though, the SEP is better for the school, as you'll see below.

For 2010, the bulk of the funding intake comes from the IPTAY level, garnering roughly $5.2 million of the total giving, which doubles the value given of any other single level. Next are the Tiger and Heisman levels, at $2.4 million + each.

IPTAY FINANCES FY 2007 FY 2008 FY 2009 FY 2010
Adjusted Balance on July 1 9,056,158 12,129,019 20,042,401 26,591,264
Contributions and Memberships 15,713,657 22,039,696 19,327,875 19,206,541
Investment Income 421,474 537,729 604,581 288,436
Transfers in 600,000 600,000 600,000 600,000
Total Additions 16,735,131 23,177,425 20,532,456 20,094,977

Expenditures & Transfers

Scholarships 5,312,116 6,314,579 6,404,132 6,769,782
IPTAY Operational Budget* 2,486,141 2,798,466 2,924,360 2,662,964
Vickery Hall 1,380,915 1,526,203 1,731,742 1,695,241
Tiger Cub/Collegiate Club 23115 54529 42393 43818
IPTAY Special 44974 98067 95365 53340
Priority Four Funding 1,411,299 2,467,073 2,780,469 4,849,098
Segregated Reserve Fund Transfer 2000000 2000000 0 700,000
WEZ Construction 1000000 0 0 0
Losses on Investments 3711 5126 5134 2,630
Total Expenditures & Reductions 13,662,271 15,264,043 13,983,595 16,776,873
Net Excess 3,072,860 7,913,382 6,548,861 3,318,104
Balance of Segregated Reserve Funds 3,000,000 3,578,257 4,529,054 4,593,586

IPTAY Total Spending Funds

(Excess+Reserve+July 1 balance)

15,219,018 24.571,455 30,169,519 34,502,954
Orange & White 445,421 483,280 492,359 415,379
WEZ Fundraising Budget 181,673 161,945 152,797 193,127

IPTAY Priority Four appears to be primarily a discretionary spending fund determined by IPTAY and the CUAD. It is spent on various expenses in different years, such as Vickery renovations, stadium equipment, seating renovations, and pressbox renovations. The largest expenses from 2007-2009 are the following: Band expenses, Baseball lighting, CUAD Airplane (likely TDP interviewing candidates) at 1.275 million, WEZ furniture and transition, the new baseball stadium addition (1.7 million), and the South Egress (600K). Basketball marketing was a paltry $84,000 from IPTAY's funding.

For FY10, a sizeable chunk of the $4.8 million spent went to baseball, 1.4 million. IPTAY spent only $128,000 on Spiller's Heisman campaign within the FY10 budget. Other sizeable chunks went to renovations and band expenses, HVAC at Jervey ($490K), basketball floors ($286K), the outdoor track surface ($480K), and a projects contingency fund ($600K).

So, in my grossly uninformed financial opinion, it looks to me that IPTAY still has money left to spend. We are finishing well in the black. We added another $4 million to the spending accounts in FY10, for a total of $34 million just sitting there. The reserve fund is separate and basically a "rainy day" fund invested in other things outside of the S.C. State Treasury. Only $6.7 million actually is listed as scholarship money in the IPTAY budget, with $4.8 million as discretionary spending and IPTAY's own operational budget of nearly $2.6 million (wages, gameday operations, mailings, etc.). It appears though that as much as $16 million is actually going over to the AD, but I'm not certain how they are moving the money around to different areas specifically.

So now IPTAY sits on $34 million bucks and plans to ask you to give more money to fund the various building projects announced 2 months ago for a sum total of $50 million.

So tell me why we haven't broken ground when we have 3/5 of the necessary money already sitting there? You could certainly start and ask for directed donations while construction is ongoing.

Clemson's FY10 Athletic Department budget is a separate entity from the IPTAY budget, and neither the President nor the Athletic Director have discretion over the IPTAY funds. We noted in Barker's interview with TI that he "taxes" the CUAD at a rate of 6%, but no further explanation was given for this seemingly arbitrary number. So again we asked Katie Hill directly, which you'll see below.

Note also that at Clemson, and in the eyes of the NCAA, baseball is a non-revenue sport. Its a money pit, as are all other sports aside from football and basketball when you look at the budgets. Thus, its not a separate category in the AUP reports.

I can only give rough baseball budget figures after asking Katie Hill about baseball specifically. Total Baseball Earnings for FY2010 were $641,885. Total Expenses were $1,558,538.57. Clemson baseball lost almost a million bucks even after hosting the Super Regional and going to the CWS. The Chapman Grandstand is not included here, it was paid for with IPTAY funding (see above). For the two years prior, FY 08-09, Clemson baseball lost roughly 500-600K each year. Even with our Top 10 attendance, we aren't paying our way with baseball yet.

A comparison with our opponents and previous years will come later on, but for now we present the CUAD NCAA AUP budget for FY10.

CUAD Revenues FY10
Revenue Item Football Basketball Other Sports Non-Specific IPTAY Vickery Total FY10 Total FY09
Ticket Sales 17,739,119 1,598,315 539,979 - - - 19,877,413 20,962,575
Student Fees 1,428,648 156,908 - - - - 1,585,556 1,535,940
Away Game/Guarantees 550,000 20,000 754 - - - 570,754 3,161,063
Contributions 2,487,478 817,242 3,017,556 4,279,137 2,676,162 1,710,779 14,998,354 14,138,942
Direct Institutional Support 810,983 413,889 2,008,648 - - - 3,233,520 2,924,005
NCAA/ACC Distributions 6,433,762 4,369,706 159,960 - - - 10,963,428 11,748,196
Broadcast Rights 920,000 920,000 932,500
Sales/Concessions 1,342,009 110,316 122,956 221,053 1,796,334 1,780,722
Royalties/Advertisements 145,000 75,000 2,993,036 3,213,036 3,662,144
Endowment/Investment 201,166 201,166 441,157
Other 57,504 38,710 116,174 1,050 213,438 567,882
Subtotal Revenue 30,994,503 7,486,376 5,963,563 8,730,556 2,676,162 1,711,829 57,562,999 61,855,126

Clemson football is obviously the bread winner, generating 50+% of Clemson's total athletic revenue. It actually went down from the 2008 season ($35 M), and is more on par with the 07-08 football figures. Football is the primary reason why the AD didn't make quite as much in FY10 (2009 season) as FY09. Isn't it a bit strange that the ACC Atlantic title season and Spiller's Heisman-like season made $5 million less than the Bowden/Swinney transition?

A full explanation of the terms is available in this document: NCAA procedures. I think most are self-explanatory. "Non program specific" entails funding that doesn't necessarily fall under one particular sport; its a general term. If your donation mandated "soccer and baseball", for example, it would go here.

In short, IPTAY is primarily responsible for the Contributions row, and you see $14 million is being sent over from IPTAY accounts to the AD as revenue to spend on scholarships. It can include other sources than IPTAY however. The NCAA tournaments and the ACC TV/Bowl revenue sharing lies within the distribution figure of $10 million.

One area where Clemson doesn't do as well, due to a smaller market, is in the broadcasting rights. This is radio, local TV and internet broadcasting that is separate from the conference TV deal. It may include rebroadcasts on CSS for example. A school like Georgia kills us in this category.

Not shown here is revenue from various camps/clinics, though it could be lumped in elsewhere. Our study of AUP figures show that some schools do seem to lump them in with something else. I believe it depends on the specific amount the school makes, but I'm not sure.

Next the Expense report:

CUAD Expenses FY10
Expenditure Football Basketball Other Sports Non Specific IPTAY Vickery Hall Total FY10 Total FY09
Student Aid 2,912,294 1,167,777 4,965,558 948,942 - 8,730 10,003,301 9,328,137
Guarantees 1,860,000 398,136 25,536 - - - 2,283,672 2,241,393
Coach Salaries 4,956,891 2,760,861 3,224,858 10,942,610 13,431,186
Support Staff/Admin salary 1,428,834 334,766 83,379 6,477,959 1,081,445 1,530,198 10,936,581 10,270,204
Recruiting 292,595 230,705 289,632 812,932 821,265
Travel 1,672,818 910,080 1,010,851 124,470 44,700 8,496 3,771,415 3,443,428
Equipment/Supplies 596,707 98,692 494,780 200,339 5,667 3,121 1,399,306 1,214,015
Game Expenses 1,782,619 271,451 282,830 2,336,900 2,536,519
Fund Raising/Marketing 511,766 1,544,350 2,056,116 2,085,969
Facilities/Maintenance 144,213 21,288 35,562 2,862,082 22,841 3,085,116 2,169,082
Indirect Facilities/Admin Supp 2,438,988 2,438,988 1,995,905
Other 504,508 363,824 475,313 4,312, 167 153,393 5,809,205 7,840,707
Total Operational Expense 16,151,479 6,557,580 10,888,299 17,876,713 2,676,162 1,726,779 55,877,012 59,927,780

In addition to the usual expenses, there are nonmandatory/mandatory transfers each year to various things before you get to the real figure for expenses.

Mandatory Transfers - - - 1,000,000 1,000,000 2,549,970
Nonmandatory Transfers 2,483,579
-Student Services - - - 41,000 41,000
-Construction Projects - - - 1,675,576 1,675,576
-Band Support 187,930 187,930
-IPTAY (2,016,000) (2,016,000)
-Institutional Research 15,000 15,000
TOTAL EXCESS +14,843,024 928,796 (4,924,736) (10,049,653) - (14,950) +$782,481 -556,233

The total excess is the difference between all revenues, expenses and transferred cash, so CUAD made $782,481 in FY10, a gain of roughly 1.2 million over FY09. Numbers in the final line in parentheses are losses. The IPTAY figure of $2 million is a revenue (transferred In). The total nonmandatory transfer in FY10 is the sum of services, band, etc., while only the total value is listed for FY09.

Clemson's total operating balance is just north of $ 9 million, this takes into account the gain of 782K to the total balance at the end of FY09 of $ 8.6 million.

So you see Football generated $30 million and spent roughly half of it. Basketball generated a million bucks and the money pits are in the other sports and the non-specific athletic spending, and most of that was spent on facilities maintenance, AD support staff, and administrative salaries for people not tied directly to one sport.

Now to the issue of how much funding CU takes away that we're interested in. We didn't see the same figures as before in this FY10 budget. We also questioned the "6%" figure. Last year there was a transfer of 700K in addition to the Indirect Administrative Support figure of roughly 2 million, for a total "tax" of $2.7 million sent to CU from the AD in FY09.

So I asked Katie Hill:

Last year the budget showed a "university surcharge" of $700K in nonmandatory expenses, and this year's budget doesn't. This on top of the $1.99 million charged as Administrative fees went to the University from the AD. Was this charge removed or lumped in with something else?

James Barker was also quoted as charging CUAD at a rate of 6%, where is this figure coming from?

There was no additional surcharge (this year). The administrative fee charged for the 2010 fiscal year totaled $2,438,988. The six percent source is six per cent of the earned revenues from two year's prior. Earned revenue is revenue such as ticket sales, corporate sponsorships, etc., but it does not apply to contributions. The institution uses two years' prior so we can budget an amount with a level of certainty.

So they look at the FY budget from two years beforehand, take the total revenue figure minus our contributions and levy a 6% tax on the department budget so they know ahead of time how much to plan to donate back.

For anyone wondering, with the new TV deal coming online next football season, it will take 2 years for Barker to raise his charging rates and get more than $2.5-3 million from the AD (assuming this process remains in place). Clemson should get around $6 million from the new TV deal starting in the FY12 budget.