IPTAY Finances and CUAD Budget FY13

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. It is later than we would've liked to present it because we kind of got the run-around from Clemson administrators until I went directly to Katie Hill's replacement, Graham Neff. Three years ago 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). We covered the FY10 budget here, and we did the FY11 budget before as well. We covered the FY12 budget last spring here. In this article, we're going to update that information for the FY that ended in June 2013 (July 1 2012-June 30 2013), and includes the 2012 football season only. The current fiscal year is not finished, remember.

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:

• The payment of the annual cost of athletic scholarships.
• The payment or reimbursement of the operating expenses of IPTAY.
• The establishment and maintenance of an adequate reserve fund deemed appropriate by the IPTAY Board of Directors.
• 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.

Below we detail the current membership of IPTAY and the trends over the last 5 years. These figures are concluded on July 1 2013, so they do reflect aftereffects of the 2011 season.

IPTAY MEMBERSHIP 2007-2013

Donor Level	2007	2008	2009	2010	2011	2012	2013
Purple ($140)	4217	3901	3912	3540	3237	3378	3015
Orange ($350)	3915	2725	2636	2564	2477	2670	2683
Champion ($700)	2092	2359	2187	2116	2084	2131	2217
Tiger ($1400)	3406	2604	2059	2030	2009	2113	2202
Howard ($2100)	652	1450	1192	1120	1047	1015	1050
IPTAY ($2800)	1364	2255	2298	2065	2020	2071	2125
Jervey ($4200)	-	-	-	238	245	276	336
McFadden ($5600)	113	361	338	289	249	274	288
Fike ($7000)	183	286	271	262	252	271	282
Heisman ($10000)	201	315	289	290	300	309	360
Total	16,143	16,256	15,182	14,514	13920	14508	15136

Note that we only show membership by level information, you can donate and not be in one of these levels. There is also an amount of donors who contribute less than the Purple minimum that goes into some figures. These figures had shown a decline in 2011 in every category except Jervey and Heisman level, with the overall IPTAY trend headed downwards over the years. However in 2012 IPTAY had a nice bump of 500 or so members and more donations to go along with that. Recall the SEP was initiated in 2008 cycle, and some of the drop in 2009 can be partially attributed to fan discontent to the new seating policies. We're slowly creeping back up to those pre-SEP levels. Membership stats for the lower levels like Tiger Cub/Collegiate Club were not provided for all years, but there is significant membership there. The IPTAY level tends to be the largest giving level in terms of cash value.

IPTAY FINANCES	FY 2007	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013
Adjusted Balance on July 1	9,056,158	12,129,019	20,042,401	26,591,264	29,909,368	34,077,208	32,956,877
Contributions and Memberships	15,713,657	22,039,696	19,327,875	19,206,541	18,690,451	19,210,415	20,973,056
Investment Income	421,474	537,729	604,581	288,436	315,996	319,906	247,172
Transfers in	600,000	600,000	600,000	600,000	610,558	600,000	500
Total Additions	16,735,131	23,177,425	20,532,456	20,094,977	19,617,005	20,130,321	21,220,728
Expenditures & Transfers
Scholarships	5,312,116	6,314,579	6,404,132	6,769,782	6,913,985	7,168,576	7,482,970
IPTAY Operational Budget*	2,486,141	2,798,466	2,924,360	2,662,964	2,838,391	3,341,876	3,691,353
Vickery Hall	1,380,915	1,526,203	1,731,742	1,695,241	1,733,885	1,841,280	2,152,741
Tiger Cub/Collegiate Club	23115	54529	42393	43818	34754	58,592	50,368
IPTAY Special	44974	98067	95365	53340	114940	56,822	77,188
Priority Four Funding	1,411,299	2,467,073	2,780,469	4,849,098	2,210,991	8,181,402	13,037,007
Segregated Reserve Fund Transfer	2000000	2000000	0	700,000	1,600,000	600,000	0
WEZ Construction	1000000	0	0	0	0	0	N/A
Losses on Investments	3711	5126	5134	2,630	2220	2,105	N/A
Total Expenditures & Reductions	13,662,271	15,264,043	13,983,595	16,776,873	15,449,166	21,250,653	26,494,856
Net Excess	3,072,860	7,913,382	6,548,861	3,318,104	4,167,839	-1,120,332	-5,274,128
Balance of Segregated Reserve Funds	3,000,000	3,578,257	4,529,054	4,593,586	7,322,615	7,825,354	8,632,301
IPTAY Total Spending Funds (Excess+Reserve+July 1 balance)	15,219,018	24.571,455	30,169,519	34,502,954	41,399,822	40,782,230	36,315,050
*-includes
Orange & White	445,421	483,280	492,359	415,379	453,481	437,462	N/A
WEZ/Capital Fundraising Budget	181,673	161,945	152,797	193,127	483,795	821,785	3,423,142

The WEZ number above for 2013 is not the same line-item as in previous years, as this one is to pay for the Video Board upgrades ($3M) and the new scoreboard. IPTAY spent another $7.8 million on the IPF and $280K on refurbished seating at Tiger Field that is also in P4 funding. Our post from last year shows IPTAY spent $1.8 M on the IPF in the last budget year, and another 700K on the video boards. P4 is basically whatever IPTAY decides to pay for that we need, which you can see jumped from the $2M range under Katie Hill/TDP to now $13M in the last year.

Items marked N/A were not reported separately.

So the gist of this table is the following: IPTAY has started to really spend some of the money they've been sitting on for many years, but they are still sitting on plenty more and we can basically pay for whatever we want to build if they choose to spend it. They'll try some fund-matching to entice you to donate more without dipping into their moneypot, but they've got the money to pay for just about anything right now if they want to do it.

Donations seem to be holding fairly steady over the term of the table, all in the $19-22 million range. Scholarship costs are going up thanks to the SC Legislature and Clemson's rising and rising tuition.

The surprising number is the Vickery number, to pay for tutoring and other assistance, we're now paying considerably more than we were in 2007. This probably includes various things like computers, but its a chunk of money.

Clemson's FY13 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. This process goes through the IPTAY Board of Directors, but a big part of the changes made over the last year has been to put these funds under the AD somehow without making it taxable or letting Barker take it. There has been a more streamlined process put in place to bring these finances under DRad's discretion, though its unlikely he'll ever be able to spend at will. Previously the AD had to request IPTAY pay for things, and Billy D was the go-between, which didn't quite sit well with anyone because he wasn't full-time to IPTAY fundraising.

More recently IPTAY has built more of its focus around major gifts, large donations that can come via someone's personal large lump sum or from their estate after death, for example. Before the WEZ, we didn't have a major gifts initiative. If Clemson is going to pump up the donation dollars more than current levels, they'll have to reiterate the focus on this area. We do have 6 employees whose specialty is arranging and handling these large gifts, there should be more. You can see we're putting the money into capital fundraising for major projects, this is where its going.

DRad is likely going to push for, perhaps even hire himself, a person whose job is solely to raise money and lead IPTAY across the southeast. I do not recall if this hire was made or not.

Note also in the below table that at Clemson, and in the eyes of the NCAA, baseball is a non-profit/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. However, baseball always loses CU at least $600K each year, sometimes approaching $1 Million in losses. Even with our Top 10 attendance, we aren't paying our way with baseball. This is why Clemson needs to advertise itself better to generate more baseball revenue and attendance, in my opinion. You'll see below that we are spending more on advertising at least, which was one of the things the Athletic Advisory Committee brought up to TDP, but we can do more here.

It would be nice if we had a new baseball coach to invigorate the stagnant baseball program wouldn't it?

Now for the Clemson NCAA AUP Budget figures from FY13, given to us by Clemson AD directly.

CUAD Revenues FY 13

Revenue Item	Football	Basketball	Other Sports	Non-Specific		Total FY13	Total FY12	Change
Ticket Sales	22,103,435	1,373,327	497,298	-		23,974,060	22592026	+1,382,034
Away Game Sales & Guarantees	2,292,793	8000	4000	-		2,304,793	263.450	+2,041,343
Contributions	2,583,001	833,688	3,469,663	14,370,095		21,256,447	19.990,118	+1,266,329
Direct Institutional Support	892,986	450,572	2,324,127	85,794		3,753,479	3,771,288	-17,809
NCAA/ACC Distributions	12,770,737	4,483,954	-	-		17,254,691	17,128,824	+125,867
Broadcasting RIghts	555,000	175,000	-	1,520,000		2,250,000	2,175,000	+75,000
Concessions/Novelties/Parking	1,600,785	93,068	90,702	48,690		1,833,245	2,006,095	-172,850
Royalties/Advertising	428,000	169,000	116,050	4,064,051		4,777,101	4,407,240	+369,861
Endowment & Investments	-	-	-	430,213		430,213	531,864	-101,651
Other	12,480	-	50,939	232,326		295,745	285,315	+10430
Subtotal Revenue	43,239,217	7,586,609	6,552,779	20,751,169		78,129,744	73,151,220	+$4,978,524

Now for some explanation, in previous years the Student Activity fee was a separate line item, which is what the University takes from everyone enrolled as a semester fee, and Sikes gives to the AD for tickets, etc. It has now been removed, and is netted with the "overhead" charge that the AD pays back to Sikes Hall. You'll see their explanation below.

The Away Game Guarantee line is the money that we are paid to play in away games, including any ticket revenue we may make from the gate of that game. In FY13, meaning the Fall 2012 football season, we played Auburn in the Georgia Dome, and that is why we made so much extra cash here. The $263K number is more normal for us, but you see now why they always want to play in a Kickoff Classic game.

Contributions is actually IPTAY money coming into the AD, not all the money IPTAY makes, which covers scholarships and everything else that the AD ultimately writes the checks for, including Vickery. The biggest difference between Clemson's budget these last two years and the previous 5 is this line along with the NCAA/ACC revenue line, which is the ACC TV deal money and the NCAA Tournaments.

Years ago, when we started tracking these figures, it was that other SEC schools were spending much more booster club money that really made the biggest difference between our budgets and someone like Georgia, and SEC money made the other big chunk of it. However, I will again point out that we get killed in terms of broadcasting revenues by someone like Georgia. Broadcast revenue is Clemson's own private contract with Learfield.

So in a sense, when you realize IPTAY is now spending their money, its not quite accurate to say that Clemson athletics is making $5 million more a year or that our budget is exploding, we're just spending what we have been sitting on for a decade. As you'll see below, we end up in the red because we spend everything IPTAY sends in.

Now the Operating Expense report:

CUAD Expenses FY12

Expenditure	Football	Basketball	Other Sports	Non-Specific	Total FY13	Total FY12	Change
Athletic Aid	3,345,870	1,223,221	5,687,962	979,396	11,236,449	10,939,864	+842,485
Guarantees	1,203,000	344,381	30,044	-	1,577,425	2,643,297	-1,065,872
Coach Salaries	6,872,417	2,915,226	3,869,500	500,533	14,157,676	14,970,360	-812,684
Support Staff/Admin Salaries	2,048,378	474,688	204,309	11,826,762	14,554,137	12,606,907	+1,947,230
Recruiting	616,645	278,274	403,215	-	1,298,134	1,176,709	+121,425
Team Travel	1,891,246	889,385	1,468,692	-	4,249,323	4,975,487	-726,164
Equipment/supplies	739,816	184,393	600,532	420,950	1,945,691	1,769,756	+175,935
Game Expenses	2,283,927	539,886	359,990	-	3,183,803	2,974,464	+209,339
Fundraising/Marketing	-	-	-	2,759,085	2,759,085	2,627,912	+131,173
Facilities Maintenance/Rental	196,173	11,994	22,047	1,197,167	1,427,381	1,726,291	-298,910
Indirect Admin Support	-	-	-	865,899	865,899	2,218,483	-1,352,584
Other	1,234,143	273,172	615,404	6,210,346	8,333,065	8,358,894	-25829
Total Operational Expenditures	20,431,615	7,134,620	13,261,695	24,760,138	65,588,068	66,988,424	-1,400,356

These things are the normal operating expenses, below you'll find the rest of the services that the AD pays for.

Do notice that the coaching salary line actually decreased, which is somewhat surprising by itself. I think what we are seeing is some of the money being moved into the support staff salary positions and likely some people have been given different titles to put them in different categories. However, this includes all the AD administration that aren't affiliated with any specific sport.

In previous years we have outlined that Barker and the administration "taxed" Clemson athletics at a rate of 6% of the total revenue figure from 2 years prior. Some of this is just to pay for the lights, but it ended up being a way that Barker could hold back the athletic spending for his own projects. Last year this worked out to be about $2.6 million, which is primarily hidden in the line item Indirect Admin Support above. You'll notice that its now decreased by -$1.3 million. According to Graham Neff in the AD, the department is still paying the fee, but they have re-done how they are reporting it:

The CU General & Administrative Fee (6%): Yes, we continue to pay that fee, as all Auxiliary Units do, on all self-generated revenues. For FY13, that fee totaled approximately $2.6M. As you noted, we did alter the way this was reported. Previously, we would show the full G&A expense, along with a full "Student Athletic Fee Transfer" revenue (approximately $1.5M). Last year, and going forward, we’ll simply net those transactions, showing no "Student Athletic Fee Transfer" revenue, and consequently a substantially reduced G&A expense, as you identified.

~"Student Athletic Fee Transfer": As noted above, this revenue has been absolved within a reduced G&A Expense. We pursued this change in accounting in order to more clearly show the true net transactions between the Athletic Department and CU. We do not receive a dedicated Student Athletic Fee, officially, and are a net transaction provider to CU in this sense.

Nonmandatory Transfers (in)/out

Expense	Football	Basketball	Other Sports	Non-specific	Total FY13	Total FY12
Debt Service	2,017,491	14,003	-	194,568	2,226,062	N/A
Annual Contributions	-2,452,844	-772,649	-3,363,835	6,838,868	249,500	N/A
Student Services	-	-	-	349,746	349,746	94,000
Construction Projects	-	-	-	13,907,437	13,907,437	5,957,730
Tiger Band Support	-	-	-	240,897	240,897	235,202
Ops Support	-28,000	-	-	28,000	0	1,000,000
Total Nonmandatory	-463,393	-758,646	-3,363,835	21,559,516	16,973,642
Total Expenses	19,968,222	6,375,974	9,897,860	46,319,654	82,561,710
Revenues - Expenses	+$23,270,995	+$1,210,635	-$3,345,081	-$25,568,485	-$4,431,936	-$1,124,136

Since the Debt Service did not appear in previous budgets, I asked about this as well. Its basically us paying off the debt on the WEZ. Think of it as the mortgage payment. The IPF is largely IPTAY money.

~The Debt Service figure is simply as listed… The existing annual debt service currently on the books for previous projects. Namely the WEZ projects from previous bond issuances.

We thank Assistant AD Graham Neff for his help in clarifying these issues.

So, since this post is not intended to go line by line and instead serve as a point of reference, there is not much further analysis to do here. Clemson is making money, and we're spending what IPTAY is still sitting on, and it was really only beginning in FY12 that we even started touching the pot o'gold that the IPTAY board of trustees has been sitting on. They still have plenty to spend, and we could get started with the Oculus at the same time as the Baseball Stadium upgrade that should be starting up soon. It is likely that DRad is trying to make them budge more about the reserve money, presumably to pay for the exorbitant buyouts he's giving away.

However, the State Legislature killed a bill just this week that would let us go around their usual checks and procedures to fast-track construction projects, so it'll be a few years before it is all done.

Our usual caveat, which must always be stated here, is that all schools report their budgets differently, even within the guideline of the Agreed-Upon Procedures format we display here. Some schools spend every drop of that booster money, and it inflates their budget revenues and expenses accordingly. You really have to get into the numbers beyond a superficial level (which is all the USAToday database is doing) to truly understand where it all goes and who is really keeping their finances in order. Once we complete most of our planned upgrades, you may see Clemson's revenue figures shrink drastically, and its just because they aren't spending the IPTAY cash. Its going to be similar elsewhere in some cases. About all I would say is that you have to keep up with the Joneses in the broadcast/conference/ticket revenue areas. That is a more telling metric out of these figures and thats where I'd make comparisons to Texas or Alabama, etc.