Most also seemed oblivious to the Booster exec noting the following:
"It's not unusual to carry $75 million or more in facility debt."
None of this surprised me, but interesting to see reactions.
AD understands Muschamp 'angst'
"He also said the Gators needed to upgrade their facilities. Last week, Florida broke ground on a $15 million indoor practice facility. Foley said other projects could follow, depending on finances. Florida already has more than $100 million in on-campus projects on tap, including a $50 million renovation to the O'Connell Center that's scheduled to begin in March.
And the athletic program has $90 million in debt, with Foley making it clear he doesn't want to take on more than $100 million."
Re: UF Athletic Dept. Currently $90M In Debt
Jerry Kutz
2/11/15
I doubt their operational budget is in the red.
"Originally posted by FSU_Drews32:
Its similar to having a 3 million dollar home, that you owe 1.5 on. Sure you can say you are 1.5 in debt, but you could always sale it and be in the plus. Sure their operational budget may be in the red, but as a whole they are not.
I agree with you about the facility debt. I am pretty certain their debt is only facility debt.
When they expanded Ben Hill Griffin Stadium, and built the club seats and skyboxes, they probably borrowed that money (debt) with long term pledge payments and skybox and club seat revenue pledged against it.
That is what we do when we build a facility. Very few donors write you a big check up front. Most pledge their gifts of $50,000, $250,000 $1 million over five or 10 years and most -- not all -- are able to maintain their payment schedule.
With the IPF, we borrowed the money and use the pledge payments to pay the mortgage and continue to raise money for the project to pay future bond payments. We've done that on virtually every facility we've built. If you wait to have the cash, you'll never get it built.
UF's operating budget is healthy and like you said, you can have a lot of debt and still have a healthy financial statement if you have adequate revenue sources to pay that debt. They can't sell the facility but if they have adequate revenue streams and pledge payments to collateralize the loan, and I am sure they do, then they have a healthy financial statement."
College athletics finances
Jerry Kutz
2/11/15
"I don't know what UF's debt is but it wouldn't surprise me if it was more than $10 to 20 million as many facility projects are debt financed. Their dept is probably not operating debt. It's probably bond financing on facilities which is kinda like a mortgage.
I suspect they bond financed their stadium expansion a few years back.
At Florida State we bond finance (debt) pretty much every facility project and use pledge payments for that project, or secured revenue streams, to pay the monthly bond issue. It's not unusual to carry $75 million or more in facility debt.
When we raise money to build a project like the IPF, we try to wait until we have enough "leadership" gifts pledged (50 percent or more) before we build the project and then continue to raise money after it is built.
Ideally, all of your money would be in hand before you build the project but that is not reality for college athletics programs. Typically, if a donor who pledges $1 million to a project, or even $50,000, they will pay it over five or ten years so you borrow the money and make bond payments with their pledge payments. Sometimes those donors who pledge $100,000 will make a payment of $10,000 or $20,000 for a year or two and then fall on hard times, or have other priorities, and not pay for a year or two or ever again.
Just because you build it does not mean it is fully paid for. It usually carries debt, just like the home you built.
Virtually every FSU Athletic facility is bond financed and carries lots of facility debt with pledge payments still coming in. We are not unusual in college athletics.
Very few colleges, UF included, would have $20 million or less in facility debt."
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