Football financials then and now (thank God for the ACC...)

[the artist FKA zipp]

The latest ULAA financials provide an update on a significant shift in the source of football revenues. This trend didn’t just start. But after six years of moving in opposite directions, revenues from the ACC specifically and revenues from other sources have pretty much reversed their importance to the athletic department.

When the current regime took over in 2017, football revenues from the conference represented just under 30% of football operating revenues overall. For the fiscal year just completed, ACC revenues now comprise almost 70% of the money that football produces. Correspondingly, revenues from other sources in football have declined from 70% of the total in 2017 to 30% in 2023. Never has U of L football and athletics overall been more reliant on the conference for its financial survival.

Between those years, ACC revenues (black bars) increased by 184%—unadjusted for inflation—from $11.1 million to $31.5 million. However, that’s not the complete story because non-ACC revenues (red bars) declined 45% from $27.0 million to $14.8 million, then and now. That last number is the lowest football revenue derived outside the conference since at least 2012 when I started compiling these stats. (Total football revenue in 2012 was $18.6 million, with conference revenues accounting for a miniscule $0.5 million.)

Again, bear in mind these dollar amounts aren’t inflation adjusted. CPI measured inflation was north of 20% between 2017 and 2023. A 45% nominal decline is at least ten percent understated in real, inflation adjusted terms.

Even with Jeff Brohm at the helm, U of L won’t fill that large of a financial hole in football operations anytime soon. Hell, Nick Saban couldn’t get that job done. Just remember to check the numbers when we get off to a good start this season and some—esp. U of L—start beating the band about the state of the program. Thanks to them, we’ve got a long way to go…

 

[the artist FKA zipp]

Oops...

Found what I believe to be an error in the above data. I'll post the revisions shortly and an explanation...

 

[the artist FKA zipp]

I do believe that I incorrectly presented the 2017 data in the OP. My error resulted from a change U of L made to their football revenue accounting in 2018 and which I used for the 2023 data. So the 2023 numbers are OK.

Tyra made a change that clarified the ACC revenues, a sizable part of which had been entered as "other" prior to 2018. IMO that was an improvement. My error was mistakenly assigning that other revenue component.

Since I also mentioned 2012 data in the OP that my error also affected, I'm presenting below the entire data series that I have access to. I've also added the 2024 budget numbers for further discussion.

Finally, the reason I couch this as "I believe" is because U of L doesn't annotate changes to these unaudited reports. A change is simply made, and it's left to you (me) to figure it out...

The upshot is the 2017 revenues and my comments thereupon have to be revised. Here's the original and revised info...

• 2017 revenues from the ACC were 47% of the total, not 29%
• 2017 revenue from other sources was $20 million, not $27 million
• The increase in ACC revenue between 2017 and 2023 was 76%, not 184%
• The decline in other revenue between 2017 and 2023 was 26%, not 45%
• Revenue outside the conference was about the same in 2012 and 2023, $15.0 vs $14.8 million, respectively

Basically, the revenue changes across the five seasons 2017-2023 (Covid year omitted) have been significant, just not as significant as presented in the OP.

By the way, I added the "total" line to the bar chart to show how outsized increases in conference revenue can mask subpar performance in the department internally. To use an old Doc Ramsey term, much different trajectories...

 

[beantowncard]

I do believe that I incorrectly presented the 2017 data in the OP. My error resulted from a change U of L made to their football revenue accounting in 2018 and which I used for the 2023 data. So the 2023 numbers are OK.

Tyra made a change that clarified the ACC revenues, a sizable part of which had been entered as "other" prior to 2018. IMO that was an improvement. My error was mistakenly assigning that other revenue component.

Since I also mentioned 2012 data in the OP that my error also affected, I'm presenting below the entire data series that I have access to. I've also added the 2024 budget numbers for further discussion.

Finally, the reason I couch this as "I believe" is because U of L doesn't annotate changes to these unaudited reports. A change is simply made, and it's left to you (me) to figure it out...

The upshot is the 2017 revenues and my comments thereupon have to be revised. Here's the original and revised info...

• 2017 revenues from the ACC were 47% of the total, not 29%
• 2017 revenue from other sources was $20 million, not $27 million
• The increase in ACC revenue between 2017 and 2023 was 76%, not 184%
• The decline in other revenue between 2017 and 2023 was 26%, not 45%
• Revenue outside the conference was about the same in 2012 and 2023, $15.0 vs $14.8 million, respectively

Basically, the revenue changes across the five seasons 2017-2023 (Covid year omitted) have been significant, just not as significant as presented in the OP.

By the way, I added the "total" line to the bar chart to show how outsized increases in conference revenue can mask subpar performance in the department internally. To use an old Doc Ramsey term, much different trajectories...

It may not be possible (or easy) to get these data, but this would be much more meaningful if UofL was compared with other institutions. This would control for “non-Jurich” factors, since the recurring theme of all this is how great Jurich was and how terrible his replacements have been. If things other than the athletic director contributed to this pattern one would see something similar at other schools. Comparison schools must be chosen carefully so that they are reasonable peers (no fair picking Alabama).

 

[the artist FKA zipp]

I’m not an advocate of these reports, but the NCAA report completed by each school shows a breakdown in football revenues for every school. That is, where the football revenue comes from specifically.

Included is the media/conference distributions. But you can simply use the amount that each conference reports, subtract that from total revenue for a particular school, and get the true operating revenue for that school.

This assumes that conference distributions are entirely due to football, but no one’s gonna seriously challenge that esp. at the P5 level.

 

[Thecycle27]

A lot of factors come into play mainly Covid. It wasn’t a 1 year problem. It was a multi year problem that frankly is still impacting the economy. Tie that with the Scott Satterfield era where he lost a significant piece of the fanbase.

It will be interesting to watch but the only coach that was going to pull Louisville out of this mess was Brohm. He is off to a good start. I can’t imagine the pressure he feels. This year is big to say the least.

Fundraising gets much easier when the community believes in the coach. The value of a coach is not just wins and losses it is in how they impact fundraising.

 

[the artist FKA zipp]

Both of these revenue components for U of L went UP the year after Covid. Then the non-ACC money plunged last year.

U of L sourced revenue increased 34% in the five years prior to 2018. It's declined 26% since, both unadjusted for inflation.

The significant, ongoing increases in ACC revenue have covered for that problem.

No doubt, things will improve under Brohm. I want to see how much because it's easy to go back further and see how profitable this program used to be.

It's also easy to adjust for inflation which I haven't done to this point. No one gets credit for revenue increases that can be explained by inflation increases. I know how much the face value of AE Club tickets went up last year alone...

 

[HiStepper]

Revenue is Revenue. Now some revenue is more acceptable than the other? It all spends and that is what it is used for.

 

[the artist FKA zipp]

That's exactly what I mean by covering for underperformance. Thanks for speaking up...

 

[beantowncard]

That's exactly what I mean by covering for underperformance. Thanks for speaking up...

I don’t get it. Why don’t you just stop supporting UofL athletics?

 

[the artist FKA zipp]

I don’t get it. Why don’t you just stop supporting UofL athletics?

Another straw man argument. Feel free to rejoin the topic or look into the reports I suggested…

 

[beantowncard]

Another straw man argument. Feel free to rejoin the topic or look into the reports I suggested…

It’s not a straw man argument. Indeed, it’s not an argument at all. It’s a simple question. Why bitch and change nothing, when you can simply do the logical thing and walk away. According to you plenty have (you’re probably right). I’m sure someone else deserves your support more than UofL. Maybe just invest the cash. But if the people in charge of your expenditure (or investment, however you see it) are incompetent, stop giving the money. Then you have no reason to complain.

 

[Thecycle27]

90-95% of the revenue is tied to performance of 2 programs. The non revenue sports have been succeeding. It basically boils down to those head coaches and their success. This isn’t rocket science.

Football and basketball have struggled since Covid. Petrino cratered the football program and Satterfield was a bridge to Brohm. Mack plus NCAA crap cratered the basketball program. There may be a host of people responsible for these two events. The bottom line is that is why revenue declined.

 

[the artist FKA zipp]

It’s not a straw man argument. Indeed, it’s not an argument at all. It’s a simple question. Why bitch and change nothing, when you can simply do the logical thing and walk away. According to you plenty have (you’re probably right). I’m sure someone else deserves your support more than UofL. Maybe just invest the cash. But if the people in charge of your expenditure (or investment, however you see it) are incompetent, stop giving the money. Then you have no reason to complain.

My position as a fan, alumnus, or anything about ME has nothing to do with the topic. It's your effort to deflect--again.

The issue is proper evaluation. When an underperforming employee is part of a profitable company, the person doesn't get a pass or a good PA because of the company's performance. He/she gets proper evaluation as he should.

And it has to be done in the context of that person's ability to contribute, what he can personally control. That is what I do--or tried to--with my analysis. U of L has little to do with the money distributed by the ACC.

I shouldn't have to explain something that basic. But when you confuse me with the topic, I guess everything has to be clarified...

 

[beantowncard]

My position as a fan, alumnus, or anything about ME has nothing to do with the topic. It's your effort to deflect--again.

The issue is proper evaluation. When an underperforming employee is part of a profitable company, the person doesn't get a pass or a good PA because of the company's performance. He/she gets proper evaluation as he should.

And it has to be done in the contact of that person's ability to contribute, what he can personally control. That is what I do--or tried to--with my analysis. U of L has little to do with the money distributed by the ACC.

I shouldn't have to explain something that basic. But when you confuse me with the topic, I guess everything has to be clarified...

Since your are explaining the basics, please explain why an investor in a company whose management is unacceptable to him wouldn’t sell and get out, if his longstanding efforts the affect change are unsuccessful? There is no deflection or straw man, only a simple question that you have never answered. In the case of UofL, there isn’t even a return on investment, other than rooting satisfaction and entertainment. In your case you keep score in dollars, which is your prerogative. You can always find another team that will meet those needs better (better management) than UofL. THAT would be holding UofL accountable. Indeed, it is the ONLY way you can do so. Why condone the current path when a better alternative presents itself?

 

[the artist FKA zipp]

A dispassionate investor is different from a fan. I’m a fan of U of L, not who runs it. I’ve explained it this way every time you stray off topic. I’d have bailed out the last few years if all I cared about is a winner.

And it’s precisely because I’m a U of L fan that I want to see it perform at the highest—not just highER—level. As long as management is subpar (which you have to analyze to know) that can never be possible.

It’s not my fault you don’t like my answers to your OT question. You can always stop asking them…

 

[beantowncard]

In your posts, the topic is always the same. Only the date changes. Therefore, my question is not off topic.

 

[the artist FKA zipp]

You read what you wanna read. Not your definition of a fan, I get it. Why do you keep coming back?

 

[Thecycle27]

You were absolutely a fan-admirer of Jurich which is fine. You are not a fan of anyone running it today which is fine.

Jurich and Pitino both hurt the University yet you remain a fan of them. On the other hand you buried Vince and have a low opinion of Josh. All they did was try to dig out from the damage that was done prior to them taking over.

Bottom line there are a host of issues that have occurred in the past several years that has impacted the financials. The main being football and basketball have struggled.

 

[Smithereen]

2017 revenue from other sources was $20 million, not $27 million

So if I understand your chart correctly the projected revenue (red column) for 2024 outside of ACC$, will be higher than 2017. IF it turns out as projected, this will mean 5 of the 6 years since 2017, the rev will be equal to or greater than 2017. Hummmm

 

[the artist FKA zipp]

You were absolutely a fan-admirer of Jurich which is fine. You are not a fan of anyone running it today which is fine.

Jurich and Pitino both hurt the University yet you remain a fan of them. On the other hand you buried Vince and have a low opinion of Josh. All they did was try to dig out from the damage that was done prior to them taking over.

Bottom line there are a host of issues that have occurred in the past several years that has impacted the financials. The main being football and basketball have struggled.

I’m not a fan or hater of anyone. Those are irrelevant sentiments grounded in subjectivity and emotion. I am or try to be a cold analyzer.

It's hard to generalize. But when I come up with a finding or conclusion, I have no problem offering an explanation that's more theory and speculation. That should come after the finding unless the person or operation is new and has nothing to analyze.

Josh Heird is a case in point since you mentioned him... He had no real track record at U of L or as an AD anywhere else. But factually, he was at U of L, then left, then was brought back by people with issues. If I'm overseeing something, I don't want people with issues making important decisions. However, he did/does deserve his chance which I'm trying to assess. December marks his 2nd anniversary.

Tyra's another. An older guy, but similar situation. No direct experience and hired under questionable circumstances. You can polish that turd all you want now, but his four years proved in spades he was a dud. And that's exactly why he's no longer here.

Tom Jurich was never a friend of mine and probably wouldn't recognize me on the street. His tenure here was marked by unprecedented success financially and on the field/court. He should be on any U of L Mount Rushmore of meaningful people in U of L history.

I want U of L to be successful, and why wouldn't I? That doesn't mean I fall in line behind whoever's carrying a Cardinal banner. And it's not my problem when a few here can't understand that. This is a U of L athletics message board which is exactly where I should be on these topics...

 

[the artist FKA zipp]

So if I understand your chart correctly the projected revenue (red column) for 2024 outside of ACC$, will be higher than 2017. IF it turns out as projected, this will mean 5 of the 6 years since 2017, the rev will be equal to or greater than 2017. Hummmm

That is correct, and we all want good things to happen in 2024. In my case, it's more because I'm 100% behind Jeff Brohm, and he would get credit for some/much of that. But a few considerations...

How successful has the new regime been at hitting a budget--which by design--is always supposed to balance? The declining graphs below says they almost never hit it, or net position wouldn't be systematically declining.

There are seven games on the home schedule this coming year, but there were only six in 2019 and 2022 which are high-water marks. (There were also six home games in 2017...) If game-day operating revenues scale proportionately by the number of games played and only six were played, the 2024 red bar would be about $3 million less. For example, that's 50 thousand fans times $60 average per capita revenue for a home game.

Finally, these numbers aren't inflation adjusted. If I use a CPI series and assume 4% inflation this coming year, here are the inflation adjusted numbers in 2017 dollars corresponding to the red bars in the above graph...

2017: $20.1 million
2018: 19.5
2019: 21.0
2020: 18.8
2022: 19.7
2023: 12.2
2024: 17.2

Last year was for sure an unmitigated financial disaster operationally in football. Also keep in mind these are fiscal year reports. FY2019 was Petrino's last year.

To reiterate, these graphs shouldn't give anyone confidence that these guys can hit a budget. When you hit your budget as a non-profit, net position doesn't go down...