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The Dismal State of Athletics Endowments

zipp

Elite Member
Jun 26, 2001
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When I asked last week for the 11-30-2021 ULAA financials, I also asked for a recent summary of the endowment balances. I already had a copy of what was on account around the time Tyra took the AD job.

I recalled from a few years back that Tyra had significantly raided the Hickman Camp Fund (HCF) during his first year, FY2018, but I hadn’t seen a recent summary. U of L just sent one as of 10-31-2021, and the first thing I noticed is that the HCF is no longer on a list of endowments. However, there is a large balance under the name “ULAA ST Investments JPM,” which I interpret as short term investments on account with JP Morgan, most likely a Chase bank account. I have asked U of L to confirm that I’m reading that correctly, but I show the HCF and JPM funds on the list below as one and the same until we hear otherwise.

One shocking takeaway 3+ years later is that there are no new endowments on the list. The Bratcher endowment near the top of the page was funded after 6-30-2017 by what was called a “transfer” at that time. Perhaps Tyra brought in that money if they weren’t just funds moved from somewhere else. But keep in mind that Jurich didn’t technically leave until the Fall of 2017. There’s no other indication that Tyra brought in anything as a new endowment.

Then, there are the balances… Compared to the $25 million total in 2017, most of the endowments are relatively small but growing. I show a widely known stock market index at the bottom of the list to gauge that growth. Although most of the gains in the smaller endowments are impressive, it could have simply been underlying investment growth and not new funds added to existing endowments. In other words, since we don’t know about distributions from the various endowments or how funds were invested, it’s unknown whether Tyra was able to get existing donors to increase their endowment donations. Or if they did donate more, whether he played any role in that.

At the bottom of the list is a pretty sobering analysis of the endowments overall. The total balance of $25 million in 2017 has declined to just $11.6 million in 2021. $8.6 million of the remaining $11.6 million (75%) are endowments that have lost assets over the last four years. Why would anyone believe that trend won’t continue?

For someone in college athletics--or secondary education in general--to champion their fund raising abilities when a measure as basic as endowments shows this type of dismal performance is almost beyond belief. Maybe Tyra can try to respond to this question without an expletive.

Endowments-1.jpg
 
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As a footnote... Considering the stock market was up 90% in those four years, how much would the endowments be worth if we could have kept those funds aggressively invested?

Close to $50 million, or 5X what we have now.

Forget about thumping your chest or even bringing in more money.

That difference is almost criminal...
 
Since declining revenues and Covid year, it is reasonable that the endowments are down. Jurich and BP HAD SOME buyout money paid. My question is where was the money spent.? We’re the yearly budgets increasing? The coaching salaries decreased with CSS AND MACK vs BP AND RP. MORE questions than answers….but Zipp is on the case.
 
Endowments in principle are supposed to be "principal." You live off of the income, not the principal. If you deplete them, you're expected to build them back. If you're using them as a slush fund, there's no reason to set them aside on the balance sheet.

Most of the drop in ULAA's endowments was pre-Covid. My cash analysis during FY2021 indicated that Tyra weathered last year pretty well compared to the other three years of his tenure. Adjusting for salaries and buyouts, my estimate is he depleted cash by only around $1 million for the entire year we were impacted by Covid.

And buyouts have been offset around 50% by salary reductions since all of the replacements were lower paid. We've handed out about $30 million in buyouts thus far, and $15 million of that has been saved in salaries. That leaves $15 million depleted, and not counting Foundation investments, we had $30 million in cash and equivalents when Tyra took the job.

There's no ready excuse for where the cash has gone from his balance sheet except that he couldn't raise enough revenue esp. in the category of nonoperating revenues (gifts)--which you would expect to impact endowments. That made an analysis of his endowments relevant IMO...
 
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