Q1 FY 2024 Financials...

[the artist FKA zipp]

[This is not the typical format I use to present the latest results. There's a new sheriff in town (ULAA "Chief Financial Officer"), and I'm currently being stonewalled on the detailed report. But I'm not easily discouraged...]

I received a one-page summary prepared for attendees at a ULAA quarterly review on October 6, 2023. While it's not as informative as it needs to be, it does provide a snapshot of where things are as a department, if not for individual sports. I'll do the macro view first.

Here's the progression of fiscal year Q1 revenues ending September 30 and dating back as far as I have numbers...

Obviously, we're struggling in basketball, but I was surprised to see departmental revenues just keeping pace with last year. Problems in basketball didn't just start this year, and Brohm has football in high gear. I talked about this several months back (LINK), but the budget this year is up significantly from FY2023. I thought too much so, and I may be proven right. Football is coming around, but we have a ways to go.

In addition to the steady decline in Q1 departmental revenues, this table has some other ominous trends. Operating revenue has always been front end loaded in the fiscal year, and the first quarter used to cover more than half of the annual budget (54% in 2019). Now that ratio is barely a third (36%). Expenses are still zooming ahead unabated however. We're now barely covering expenses (by less than $4 million) in a quarter that we used to be able to bank a lot of money ($33 million in 2019). That decline in performance must change, but it doesn't look like football is gonna be the answer.

I'll post here tomorrow on year-over-year ticket sales which I know everyone is interested in...

 

[UKCoachesGraveyard]

[This is not the typical format I use to present the latest results. There's a new sheriff in town (ULAA "Chief Financial Officer"), and I'm currently being stonewalled on the detailed report. But I'm not easily discouraged...]

I received a one-page summary prepared for attendees at a ULAA quarterly review on October 6, 2023. While it's not as informative as it needs to be, it does provide a snapshot of where things are as a department, if not for individual sports. I'll do the macro view first.

Here's the progression of fiscal year Q1 revenues ending September 30 and dating back as far as I have numbers...

Obviously, we're struggling in basketball, but I was surprised to see departmental revenues just keeping pace with last year. Problems in basketball didn't just start this year, and Brohm has football in high gear. I talked about this several months back (LINK), but the budget this year is up significantly from FY2023. I thought too much so, and I may be proven right. Football is coming around, but we have a ways to go.

In addition to the steady decline in Q1 departmental revenues, this table has some other ominous trends. Operating revenue has always been front end loaded in the fiscal year, and the first quarter used to cover more than half of the annual budget (54% in 2019). Now that ratio is barely a third (36%). Expenses are still zooming ahead unabated however. We're now barely covering expenses (by less than $4 million) in a quarter that we used to be able to bank a lot of money ($33 million in 2019). That decline in performance must change, but it doesn't look like football is gonna be the answer.

I'll post here tomorrow on year-over-year ticket sales which I know everyone is interested in...

Expenses went from 30MM to 40MM on 1 year. Any idea what happened here? Did we kick some can down the road?

 

[the artist FKA zipp]

Expenses went from 30MM to 40MM on 1 year. Any idea what happened here? Did we kick some can down the road?

Good question. Here's the expense portion of the summary I was given...

The arrows on the right were assigned by U of L on the full table. Presumably, a red arrow down is an expense that's higher than anticipated.

This is where the summary is inadequate. There should be a year-over-year comparison available so we can look at outsized increases. I could dig into the actual 2023 numbers for those comparisons, but I'm trying to get the 2024 financials in their entirety.

I can post the other half of the summary table on revenues ("resources"), but the only green arrows are on concessions, parking, and facility rentals. Those categories combine for just 3.7% of the budget. U of L shows most of the revenue items as flat (yellow sideways arrow).

 

[the artist FKA zipp]

To amplify the data in the OP, I prepared a bar chart of revenues minus expenses...

On the audited/conforming reports, revenues less expenses is the change in net position. For Q1, this change is typically positive vs Q4 of the prior year, but it generally declines between successive quarters for Q2, Q3, and Q4. On the conforming reports, there are small items for "deferred inflows and outflows" that should also go into the net position. I don't have those "deferred" items on the summary I received.

I can apply the 2024 data point above as an estimate of net position on the chart below. It simply adds about $4 million to the green bar in 2023. And I label that as an estimate on the red bar in 2024. If I get the full report from U of L, I'll update this chart with their reported number for Q1 net position.

 

[bigloucards]

Does this mean we’ve got the $ to buyout KP?

 

[the artist FKA zipp]

You really gotta joke about it. Check out the red bars...$70 million decline in six years. That's Texas A&M money...

 

[the artist FKA zipp]

OK so let's look at what U of L is reporting as ticket sales as of 9/30/2023. Again, this is summary--not detail--data compiled for all of the department. So I can't (yet) discern football vs basketball. But the totals do tell us something.

Shown below are data for this year and the last couple of years. It helps to project where ticket sales for the full year are gonna fall out based on where things stood in prior years as of 9/30/202X.

For FY2022 and 2023, I totaled ticket sales for football and men's and women's basketball. I looked at both Q1 and full year sales to gauge how much revenue occurs in the first quarter. Other ticket sales, e.g., volleyball, are not reported explicitly and are excluded from the calculation. Using the ratio of Q1/Total for each category, I projected where ticket and suite sales would end up in FY2024.

Right at 80% of ticket sales occurred in both 2022 and 2023 during the first quarter. So I feel pretty good projecting this year's sales to end up just under $26 million. That would be $5 million more than last year, but almost $3 million short of the budget. As I mentioned above, I thought U of L was being overly aggressive budgeting for ticket sales. Suite sales OTOH look to be slightly beating the budget.

A result like this is undoubtedly a combination of good news in football and bad news in men's basketball. Nearly three million below on a revenue line item, however, means more red ink in all likelihood by the end of the year...

 

[2330859]

I for one appreciate Zipp’s contribution for these numbers, as it does indeed provide some insight as to where this ship is heading.

Unlike the Fed, UL cannot print its way out of this impending financial disaster. We may soon discover that buying out Payne and paying for a quality replacement is simply not possible.

 

[UKCoachesGraveyard]

I for one appreciate Zipp’s contribution for these numbers, as it does indeed provide some insight as to where this ship is heading.

Unlike the Fed, UL cannot print its way out of this impending financial disaster. We may soon discover that buying out Payne and paying for a quality replacement is simply not possible.

I don't disagree. However, very unhappy fans with very deep pockets typically find a way.

 

[the artist FKA zipp]

I don't disagree. However, very unhappy fans with very deep pockets typically find a way.

One would think. The problem is history’s not on our side. Our finances have been in steady decline for awhile. We’ve paid several of these megamillion dollar buyouts the last 5-6 years. And each time, U of L’s annual financial reporting references and accounts for them.

If we were receiving external funding, for example, from big donors, that wouldn’t hurt us financially. Might not even appear on the ULAA financial statements. Appears we’re paying for everything with no outside assistance.

Unless you believe this time it’s different…

 

[beantowncard]

I for one appreciate Zipp’s contribution for these numbers, as it does indeed provide some insight as to where this ship is heading.

Unlike the Fed, UL cannot print its way out of this impending financial disaster. We may soon discover that buying out Payne and paying for a quality replacement is simply not possible.

The Fed can print, but they don’t get out of the problem congress has created. There’s no way out of that for anyone. You can correct course or delay the inevitable. What will Hierd do? MBB is a big part of this issue but financially difficult to address. Everyone knows what needs to be done.

 

[UKCoachesGraveyard]

Unless you believe this time it’s different…

Surely we can all agree the situation this time is different. We have NEVER witnessed such basketball ineptitude like this EVER in my lifetime. Of course, I don't know WHO is motivated enough and with deep enough pockets to facilitate the needed change. They are out there....Dust off that checkbook Zipp!

 

[the artist FKA zipp]

The Fed can print, but they don’t get out of the problem congress has created. There’s no way out of that for anyone. You can correct course or delay the inevitable. What will Hierd do? MBB is a big part of this issue but financially difficult to address. Everyone knows what needs to be done.

Getting OT, but this is true. Even money printing just delays the inevitable.

The only real solution for any operation is balancing its budget. Until U of L stops showing annual deficits, our problems will only get worse. It doesn't mean everything falls apart tomorrow, but we will fail in more areas than men's basketball...

 

[the artist FKA zipp]

Surely we can all agree the situation this time is different. We have NEVER witnessed such basketball ineptitude like this EVER in my lifetime. Of course, I don't know WHO is motivated enough and with deep enough pockets to facilitate the needed change. They are out there....Dust off that checkbook Zipp!

I'll never have enough money to throw good after bad.

All situations are unique, and I won't argue the point that Payne is the worst coach most of us have seen up close. If that was the only consideration, he wouldn't be coaching another game for U of L. And the "fire Payne now" enthusiasts wanna play this up as all that matters.

It's not that simple. There's the millions involved in a buyout. There's the race issue.

And after having spent millions on several other occasions to remedy problems that persist financially, someone should be questioning if we're gonna be trying the same thing and expecting different results. Do we have people in charge who can fix a problem by throwing millions of dollars at it?

Those questions in 2023 aren't easily answered...

 

[UKCoachesGraveyard]

I'll never have enough money to throw good after bad.

All situations are unique, and I won't argue the point that Payne is the worst coach most of us have seen up close. If that was the only consideration, he wouldn't be coaching another game for U of L. And the "fire Payne now" enthusiasts wanna play this up as all that matters.

It's not that simple. There's the millions involved in a buyout. There's the race issue.

And after having spent millions on several other occasions to remedy problems that persist financially, someone should be questioning if we're gonna be trying the same thing and expecting different results. Do we have people in charge who can fix a problem by throwing millions of dollars at it?

Those questions in 2023 aren't easily answered...

You aren't wrong and it is complicated too.

When I look around college athletics, it's normal throwing millions of $ at stuff, whether you got it or not. Even the ones who are "good" at it, do it all the time. Look out when you have those are not "good" at it, they will throw even MORE at it....Kinda like our financials show us declining over the last several years.