Financial deficiency capping UK football

By Les Johns
ljohns@kykernel.com

Editor’s note: This is the first in a four-part series about the state of the UK football program.

Part 2: Football rusty without ‘gold standard.’
Part 3: Less spending, lack of in-state talent hurts football recruiting.
Part 4: Just changing head coach may not be the answer. | UK to the ACC?

The Southeastern Conference dominates the college-football landscape. The conference has six teams ranked in the AP Top 25, including four of the top seven.

Teams from the same conference clashed for the first time ever in a BCS Championship game last season, as Alabama and LSU vied for a national title.

Since 2006, college football’s national champion has come from the SEC — an unprecedented six-year streak.

During those six years, UK is a combined 16-32 against SEC competition.

Football is the greatest revenue generator for UK Athletics, but lack of investment in the program may be impacting its ability to compete in the SEC.

And despite the historic winning tradition of men’s basketball, football generates more profit for UK Athletics — and basketball isn’t even close.

“What most people don’t understand is that every school is a football school. The amount of revenue that football can generate dwarfs even the greatest basketball programs,” said Mark Nagel, associate professor in the sport and entertainment management department at the University of South Carolina. “Certainly the fans identify with what sport wins the most, but football just has the potential to make so much more money with attendance and television contracts.”

The 2012-13 athletic budget approved in the summer by the UK Board of Trustees shows that football is slated to produce $27.6 million in revenue while spending $9.5 million — for a profit of $18.1 million.

By comparison, men’s basketball, even coming off a national championship, is projected to produce $20.8 million in revenue, while spending $12.6 million — for an $8.2 million profit.

Those are the only two profitable programs for the university. The other 20 sports lose a combined $11.6 million, according to the 2012-13 budget.

“We have to have football be good. We can’t sit here and not let football do good at the gate,” UK athletic director Mitch Barnhart told the Kernel in August. “We will always look at that closely. We are in a good league and that does give us stability.”

The other sports rely on funds generated from the football program, which was budgeted to generate $2 million less than last year at least partly because of results on the field.

Last year the Cats ended a five-year run of bowl appearances and finished the season with a 5-7 record. The Lexington Herald-Leader reported in late August that UK football season ticket sales were down more than 10,000 from last year.

UK’s home opener against Kent State brought 48,346 fans to Commonwealth Stadium, the fewest to attend a home opener since 1973 and the lightest-attended home game since 1996, before a Commonwealth Stadium seating expansion.

Not many more (53,980) came Saturday night to witness the Western Kentucky Hilltoppers upset the Cats 32-31 in overtime. The last time the

Cats failed to draw more than 60,000 for a game sometime during the season was in 1998.

“In the grand scheme of a $91 million budget, if you are off just a little bit obviously that is a problem. If we’re off 10-15 percent of your total department revenue, obviously that’s a $9 or $10 million dollar hit,” Barnhart said in August. “A couple of percentage points, we can figure a way to manage our way through that.”

This is the first year football is budgeted to decline in revenue since 2004-05. Football revenue grew nearly 50 percent from 2008-09 ($20 million) to 2011-12 ($29.6 million), fueled by success on the field and SEC revenue-sharing agreements.

“The primary spark in growth of football revenues during that time came from the increase from the new SEC television contract, which went into effect in the fall of 2009,” UK spokesman Tony Neely said in an email to the Kernel.

The Cats generated enough wins to reach a bowl game for five straight years, and average attendance at Commonwealth Stadium exceeded 68,000 in three consecutive years.

The extra revenue generated by football did not stay in the program, however. During the same period where revenue increased by $9.6 million, budgeted expenses for the program grew by $1.05 million, meaning football got to keep 10.9 percent of the increased revenue, and the rest ($8.55 million) went to other sports.

“(UK)ise competing in a conference that, for the most part, whatever football wants at those schools sort of goes to the top of the list even beyond academics — and I’m not saying that’s right,” said Oscar Combs, founder of The Cats’ Pause and member of the Kentucky Journalism Hall of Fame. “That’s just the way it is. If Alabama, Tennessee, Georgia or Florida wants to do something for football, nobody is going to stand in their way on that campus.

“I’m not necessarily advocating that happen here at UK, but if you are going to compete with those guys you are going to have to invest a little bit more.”

Men’s basketball revenue also increased to $18.1 million from $14.3 million between 2008-09 and 2011-12, a growth of $3.8 million.  Expenses, however, grew $2.97 million, meaning the basketball program kept 77.3 percent of the revenue growth.

The greater growth in kept revenue for basketball is attributed to the coaching staff.

“The largest growth of football spending has been with facilities, which are not reflected in the yearly football budget,” Neely said. “Looking at men’s basketball, the largest increase in its budget came from the hiring of Coach John Calipari and his staff prior to the 2009-10 season.”

The numbers speak to a lessening investment in football that manifests itself by falling behind the rest of the league in facilities, coaching salaries and recruiting — and in the end, wins and losses.

“In all college athletics, the compensation for the players is capped, so the only area that you can exert financial muscle is in areas such as coaches salaries, facilities, training centers and academic support,” Nagel said. “Really where you see the winning come from is when you can recruit better athletes because your practice facility, stadium, coaching staff or the way you travel is better.

“It is hard to say exactly what those yield in wins, but there certainly is an impact because the more talented players want to go to the nicer places.”

s.smith says:

If you want a winning football team bring back Fran Curci and be ready to dish out more money for the coaching staff equal to that of the basketball team, anything else is folly.

3rd Fan says:

How do you get the players you need to compete?

FuzzyZ says:

Folks, it isn’t the athletics dept at UK that doesn’t want to invest in football. There have been many proposals for football related investmetns that have been shot down by the BoT or legislature over the years. This past year’s state budget had a $100M line item that was sent to the legislature only to get whacked to the cutting floor. Until they can change the funding model and allow athletics to write their own bonding requests I fear football will continue to meet it’s fate. Blame Mitch all you want but if you want results you would be better off to look a little higher on the food chain.

IU Football Fan…you are on the money. The problem however is that to de-emphasize basketball at either school would be political suicide…and even moreso at UK than IU. Were Mitch to deny Cal something basketball wanted he would be burned at the stake. The cultures (ie: fanbases and big money boosters) that surround both schools (and again much moreso at UK) demand excellence in basketball. It’s like trying to solve the nations’s budget problems. We all know what NEEDS to be done…but you could never get elected or re-elected by doing what is needed. To quote Pogo…”We have met the enemy and he is us.”

Jason Handy says:

I’d like to know how the K-Fund is included in this information. A side point, I don’t think our high school football teams will ever allow UK to be really successful in football for a sustained period of time. I hope I’m wrong. My big worry is the SEC kicking us out for a football school, which means bigger tv contracts.

Ira says:

You know what it is sad, Mitch will just turn the page yawn and go about his business as usual. Until UK football fans come in their thousands and get right under his doorstep and demand better we won’t see it in our life time. That is how pathetic our A.D. is towards UK football. There is no gold standard when it comes to football, rust colored maybe.

Would love for ESPN, Fox Sports to do an expose on this same item, but they won’t touch this. I know I’ve written to them about it.

catcard202 says:

We will hear a lot of talk out this round of Mitch’s propaganda articles…And nothing will come of it. Same ole – Same ole. Why even bother anymore.

http://espn.go.com/blog/sec/post/_/id/44750/ranking-the-secs-football-facilities

It pains my soul to say this, but it’s embarrassing as a UK FB Fan to currently see every team in the SEC make a recent major monetary investment in their FB Programs…And then reading where UK was selling recruits on the new Fatheads & UK wallpaper at the Nutter.

And I quote: “The facility face-lift took a year to plan and about two weeks to install for Forty Nine Degrees, a company out of Ohio. It cost roughly $158,000, UK officials said.”

Read more here: http://www.kentucky.com/2012/06/14/2225049/kentucky-football-players-call.html#storylink=cpy

My question is…If UK is never REALLY going to commit to putting a Gold Standard FB product on the field. Why should John & Jan Big Blue Fan put their wallets behind the product they want to sell us???

ukcat1 says:

I hope that you explain exactly what we are missing. I do not understand what a recruiting room is. We were told not so long ago that the indoor practice facility was what was going to make UK competitive. I guess that was not true.

IUfootball fan says:

As an IU football fan I can understand the frustration of UK football fans. I’ve often said that when you sell your soul to the basketball gods, such as UK and IU have, your football successes are doomed. Football MUST come first at ANY college simply because it’s in the best business interests of the college to handle football with golden gloves. I’ve always thought making basketball priority number one has killed both IU and UK on the gridiron.

One BIG advantage football schools have over basketball schools is this: they can go to Final Fours and win basketball championships because they’re so filthy rich from their football successes. Florida and Ohio State come to mind immediately when thinking about schools who are dominate in both sports. Michigan State, Wisconsin and Michigan have all had startling success in both sports too. They’re not just basketball schools though, they let football be the bellringer and everything else just follows suit. When will IU and UK learn…I type this after both schools lost to much smaller instate schools this past Saturday. IU lost to Ball State at the gun and UK in OT to Western Ky, pathetic on both accounts.

DACats86 says:

It’s all circular – facility improvements signal a commitment to football, a commitment to football will enable them to pursue and obtain better coaches as well as players. UK is damaging itself in the long run by bleeding football dry and just collecting an SEC welfare check – the revenue potential there is much greater (just based on sheer numbers) than it is for basketball. Just think if football AND basketball revenue were maximized. Barnhart himself has said that UK basketball must play in “gold standard” facilities, yet in regards to football he said that “they don’t have to be the nicest house in the neighborhood,they just have to be in the neighborhood.” Would any other SEC AD utter such a statement?! Aren’t they both UK sports? Don’t all UK sports deserve the “gold standard?” Why does the AD make such a difference?

Willrich says:

First I would like to say that I was born and raised in Kentucky and it will always be my home. The facts are evident that the powers that be, either behind the scenes or in the administation continue to milk a dying cow. Very simply it takes money to make money. The infighting and corruption at UK reminds me of third world countries that cant feed thier own people.

Marc says:

I commend you on a great investigative piece Les. This is the kind of information that the Wildcat fan-base needs to be made aware of so that they can better understand the issues surrounding the football program’s lack of success and exert their voices to those in positions of authority that can make the necessary changes to give our football program a fair chance to succeed.

I look forward to reading subsequent articles.

Frustrated Kat says:

I agree with Dick’s assessment. However, we (UK) has stepped up in making improvements to the stadium and other football related facilities. Unfortunately, facilities alone won’t bring top recruits to the bluegrass and the players are the ones that get the job done on the field. The next obvious step to me is the acquisition of a top flight coach and staff. Get the coach and the recruits will follow. This being said the University administration has got to be willing to take the steps necessary to secure a top flight coaching staff. Until that happens, the attendance and revenues generated at Commonwealth willl continue to decline.

Dick Anderson says:

The last year UK dominated the SEC in football Bear Bryant was the coach and Babe Parilla was quarterback. The year was 1950.
UK won’t build a competitive team by aiming at being profitable. Either we do everything it takes to build a national championship team, like we do with basketball, or it won’t happen.
That means the problem is with both the leadership of the university and the alumni who aren’t willing to spend a few years and give as much to football as they do basketball to make this happen.
62 years of non-dominance has proven this. Why should any player want to go to a school that doesn’t make the commitment to a national championship team?
Don’t point the finger at the coaches or the players? Play to win or don’t expect to.