More Creative Pac-12 AD Accounting

More Creative Pac-12 AD Accounting - Printable Version

+- The CardBoard (https://thecardboard.org/board)
+-- Forum: C-House! (https://thecardboard.org/board/forum-4.html)
+--- Forum: The CardBoard (https://thecardboard.org/board/forum-5.html)
+--- Thread: More Creative Pac-12 AD Accounting (/thread-9376.html)

More Creative Pac-12 AD Accounting - Farm93 - 06-23-2015

For those that hate the idea that DAPER (Stanford Athletics) includes revenue from the golf course as part of its operating budget, I trust those same types will be quite upset to learn that ASU will fuel its budget with fees from office buildings and residential units to be built on a portion of ASU's campus assigned to the athletic department.

https://asunews.asu.edu/20150619-preliminary-development-plan-athletics-district

Golf courses are at least used by student athletes and alums in an athletic activity, the majority of the fees and dues are rather indirect but at least the base facility has some role in intercollegiate athletics.

The UCB AD's rental of football facilities for weddings and corporate events is even less directly tied to athletics, but at least the money is coming from a facility used for athletics, from time to time.

What about revenue from use fees for an office building or an apartment complex?Â Better yet, to maximize those fees the tenants will apparently allowed to use those fees as an offset to lower property taxes.

More details are set to be announced tonight, but the general theme seems clear.Â Build office buildings and residential housing on ASU land and then collect money to increase the athletic department budget.Â It will be interesting to see if the citizens of Tempe accept this little scheme to take tax dollars and transfer them to the ASU AD more money.

Stanford University (not DAPER) has corporate land lease revenue streams of course, just without this unique property tax angle.

Re: More Creative Pac-12 AD Accounting - CTcard - 06-23-2015

(06-23-2015, 02:25 PM)Farm93 link Wrote:For those that hate the idea that DAPER (Stanford Athletics) includes revenue from the golf course as part of its operating budget, I trust those same types will be quite upset to learn that ASU will fuel its budget with fees from office buildings and residential units to be built on a portion of ASU's campus assigned to the athletic department.

Re: More Creative Pac-12 AD Accounting - BostonCard - 06-23-2015

(06-23-2015, 02:56 PM)CTcard link Wrote:[quote author=Farm93 link=topic=12297.msg121205#msg121205 date=1435094755]
For those that hate the idea that DAPER (Stanford Athletics) includes revenue from the golf course as part of its operating budget, I trust those same types will be quite upset to learn that ASU will fuel its budget with fees from office buildings and residential units to be built on a portion of ASU's campus assigned to the athletic department.

I guess I should be careful about speaking for others, but I think that nobody here was upset that DAPER includes revenue from the golf course as part of its operating budget. The issue was that if you want to understand how much revenue is raised specifically from intercollegiate athletics, then the golf course doesn't really count.

As to the ASU plan - I suppose it's better than what most schools do which is to use obligatory student fees and money from the general budget to subsidize the athletics program. [ASU currently subsidizes it's intercollegiate athletics program by $10 million according to the USA Today report,Â http://sports.usatoday.com/ncaa/finances/ ]

I can imagine a host of policy/tax/legal problems, but perhaps they can all be worked out satisfactorily.
[/quote]

Yes!

DAPER = Department of Athletics, Physical Education and Recreation

While the department includes intercollegiate athletics, it is so much more.Â It's budget includes revenue directly tied to intercollegiate athletics (for example, revenue from the Pac-12 TV deal), plus revenue that comes from the University (presumably from tuition) for faculty (mostly coaches) to teach physical education classes, plus student fees for club sports, plus facility fees, including the Stanford Golf Course.

Of course golf course fees should be part of DAPER's budget.Â But since DAPER is not synonymous with intercollegiate athletics, an accounting that seeks to look at the books for the subset of DAPER that deals with intercollegiate athletics shouldn't count sources of revenue for DAPER that are not directly related to intercollegiate athletics.Â It seems like this distinction is lost for some people.

BC

Re: More Creative Pac-12 AD Accounting - terry - 06-23-2015

+1 to CTcard and Boston Card. Golf course revenue is legitimate athletic department revenue. Nobody has said otherwise. But it is not revenue from intercollegiate sports.

Re: More Creative Pac-12 AD Accounting - Farm93 - 06-23-2015

And while Stanford AD will report all of DAPER revenues.
And UCB AD will report wedding and reception revenue (and expenses).
ASU will report this new ASU AD commercial real estate management revenue (and expenses).

Every school already report the limited notion of gate receipts, they are in the total for those that care.Â FWIW every Pac-12 school is getting blitzed by SEC and B1G schools on pure gate and annual football donations.Â If that was how the Pac-12 really fueled their operations the Pac-12 would be nothing more than a mid-major.

Still ASU's bold new experiment will be taking accounting to new extremes.

Now the follies of those seeking Stanford (non-PER) purity are clearly out of line as ASU AD's budget will include fees and operations of office buildings on university land.Â Made worse by the corresponding diversion community property tax dollars. And all of those enterprises will all be added to ASU AD's revenue and expenses.

Once a school owns and operates a golf course for their athletic team, as Stanford elected to do in the 1930s, then the revenue and minimal incremental expenses, associated with letting some alums putt around in the middle of the day is largely gravy.Â Point of view counts of course, but Stanford and DAPER see the golf course as a team facility that can then be rented out during the day to non-athletes.Â The expenses of the course itself are really sunk costs in every way once you accept the facility is already built and the golf teams require a well maintained course.

I guess this is UCB ADs view on weddings at Memorial too.Â Just ignore that $300-$500 billion in debt.Â This luxurious view of the SF bay from the press box was needed for the team.Â Slippery slope, I guess.

Argue all of that as we must, but geez all of that has got to be more applicable and relevant to an athletic department budget than building and operating office buildings and multifamily dwellings on essentially unrelated university land.

In any event, it is kind of sad to think how other money hungry D1 ADs will mimic this new scheme to help their ADs even at the expense of the communities their university was chartered to educate.Â A bold new world in college AD accounting is coming to a public school near you.

Re: More Creative Pac-12 AD Accounting - Farm93 - 06-23-2015

(06-23-2015, 04:40 PM)terry link Wrote:+1 to CTcard and Boston Card. Golf course revenue is legitimate athletic department revenue. Nobody has said otherwise. But it is not revenue from intercollegiate sports.

But then what about weddings or inflated rent-backs to other departments? UCB AD's total revenue includes those things.Â The argument presented by others was that those golf proceeds were in some way misleading for athletes trying to understand the resources available to them.

In my view, the Stanford golf course probably should not count, IF, the golf course was not for intercollegiate competition use.Â However, the expenses associated with operating the course can all be assigned to the teams, then the revenue from Stanford types using the course becomes incremental revenue from a certain point of view.Â Clearly the DAPER runs massive deficits using any of the more restrictive definitions of revenue.Â And yet, if offsets those deficits with revenue from non-intercollegiate athletic activities.

It is similar to how the DAPER and other D1 programs rents stadiums and arenas to summer campers. That revenue is not pure intercollegiate sports revenue either, but most successful programs are pulling in a few million in easy camper revenue from facilities not in use.Â There are costs to having the kids on campus, but the top line includes the whole bounty.Â Those activities supplement AD intercollegiate operational expenses.

Once you pull layers of the onion away some are essentially trying to understand how much revenue comes in exclusively from event operations.Â That more pure number is called out available to all as a sub-total, but an AD that relied solely on that very limited and defined revenue stream is way behind the times.Â Texas collects $60+ million in football gate.Â They win!Â Though they have a budget of $150+ million, so even they really don't rely just on their intercollegiate contest gates.Â But those sub-totals are there.Â And every AD reports them as sub-totals because they all get meaningful revenue from non-core activities that then is pushed back to support the core activity expenses.

Ultimately not many ADs are that pure.Â I suspect the closest to purity are in D3 where there really isn't any way to get creative non-core revenue.

Oddly, in the end I guess even my point of view is out of date and ASU is leading the way in creative accounting.Â I guess one has got to be creative to thrive in D1 against Texas and their $150 million in revenue, so props to ASU I guess.Â Sure hope SJSU just folds up its football program before they try to steal Santa Clara County property tax revenue.

Re: More Creative Pac-12 AD Accounting - BostonCard - 06-23-2015

(06-23-2015, 05:48 PM)Farm93 link Wrote:[quote author=terry link=topic=12297.msg121224#msg121224 date=1435102819]
+1 to CTcard and Boston Card. Golf course revenue is legitimate athletic department revenue. Nobody has said otherwise. But it is not revenue from intercollegiate sports.

Re: More Creative Pac-12 AD Accounting - Mick - 06-23-2015

(06-23-2015, 04:40 PM)terry link Wrote:+1 to CTcard and Boston Card. Golf course revenue is legitimate athletic department revenue. Nobody has said otherwise. But it is not revenue from intercollegiate sports.

My sis in law took a golf course elective and actually received credit for it.

Re: More Creative Pac-12 AD Accounting - CTcard - 06-24-2015

(06-23-2015, 05:48 PM)Farm93 link Wrote:But then what about weddings or inflated rent-backs to other departments?

You wrote a lot here, and I cannot respond to everything - but a quick note on revenues.

It is interesting to some to note the revenue explicitly from intercollegiate athletics. That's fine with me - and I have an interest in the same.

I do not think that the intercollegiate athletics should be banned from using revenue that is not derived from intercollegiate athletics. The golf course is a fine example. I am happy enough that that revenue supports the athletics program.

As far as I can tell, I think it is a good idea for ucb to rent out their athletic facilities for weddings and anything else that brings in some revenue. As these are specifically athletic department facilities, it seems reasonable to me that income derived from them goes toward athletics.

The ASU case is much less clear - and to be sure there is not enough information in that article to really judge. I can see at least two issues that I might take issue with were I an ASU alum or an Arizona tax payer. The first is that there is no particular reason that any income from this development should go towards intercollegiate athletics. While the accounting is slightly different, it's still a choice to send money towards intercollegiate athletics rather than the general fund. There might also be some issues of a non-profit, government institution competing with for-profit private companies in the real estate/development markets. I presume that they have addressed the strictly legal issues, but it still seems a bit dodgy to me.

Re: More Creative Pac-12 AD Accounting - BostonCard - 06-24-2015

(06-23-2015, 08:02 PM)Mick link Wrote:[quote author=terry link=topic=12297.msg121224#msg121224 date=1435102819]
+1 to CTcard and Boston Card. Golf course revenue is legitimate athletic department revenue. Nobody has said otherwise. But it is not revenue from intercollegiate sports.

My sis in law took a golf course elective and actually received credit for it.
[/quote]

A golf course elective or a golf elective? I took a volleyball elective and got credit for it (1 unit, p/f).Â I'm not sure what a golf course elective would be, though obviously there are academic issues relating to golf course design, for example, that could be studied.

BC

Re: More Creative Pac-12 AD Accounting - winflop - 06-24-2015

Individual schools can account for revenue and assets as they wish.Â What I do favor is transparency.Â If you're going to count money you get from renting out athletic facilities for non-athletic events, fine by me.Â Just be clear about it.Â If you choose to lease or sell lands that belong to the athletic department, that's your business decision.Â Just be clear about it.

Now, if the Pac-12 or NCAA wants to define a standard for determining the profit & loss of intercollegiate athletics, and require all member schools to report it, they are welcome to do that.Â Just be clear about it.

Re: More Creative Pac-12 AD Accounting - oldalum - 06-24-2015

I took a golf elective, but we never saw the course, just the driving range! It was taught by the then coach, but to no avail as far as my golfing skill.

Re: More Creative Pac-12 AD Accounting - terry - 06-24-2015

(06-23-2015, 05:48 PM)Farm93 link Wrote:The argument presented by others was that those golf proceeds were in some way misleading for athletes trying to understand the resources available to them.

Farm93 --

I do not think this is an accurate description of the issue that has been discussed on this board regarding golf course revenue.

Nobody here has disputed the idea that the athletic department budget properly includes golf course revenue. Likewise, athletic department revenue also properly includes revenue from P.E. classes, recreation programs, and the like. That is all legitimate revenue for the athletic department. Any profit from those activities can be used to support varsity sports, if the athletic department so chooses.

Here is the issue: some people are interested in knowing how much revenue is earned from intercollegiate athletics. That would include gate receipts, broadcast revenue, revenue sharing from the Pac-12, and the like.

Most golf course revenue is not earned from intercollegiate athletics. So, for purposes of counting revenue earned from intercollegiate athletics, most golf course revenue should not count. Nor should revenue from P.E. classes, recreation programs, the equestrian center, etc.

This does not mean that these sources of revenue are not legitimate. It does not mean that these sources of revenue shouldn't be included in the athletic department budget. It means only that these revenues should not be included in calculating revenues from intercollegiate athletics.

This is not an issue of purity. It's an issue of accounting. If you want to know total athletic department revenue, you get one number. If you want to know revenue from intercollegiate sports, you get a different number. Neither number is more legitimate or purer than the other. These numbers just measure different things.

I don't think anybody has posted here that golf course revenues are misleading to athletes trying to understand the resources available to them. Rather, I and others have posted that revenues from the golf course should not be included in calculating revenue from intercollegiate athletics. That is not the same thing at all.

Re: More Creative Pac-12 AD Accounting - terry - 06-25-2015

(06-24-2015, 05:17 PM)winflop link Wrote:Now, if the Pac-12 or NCAA wants to define a standard for determining the profit & loss of intercollegiate athletics, and require all member schools to report it, they are welcome to do that.Â Just be clear about it.

The federal government requires universities to report their revenue and expenses relating to intercollegiate athletics. The most recent year's information is posted on a Department of Education website.

However, I'm not convinced that all universities are using the same accounting principles to report their intercollegiate athletics revenues and expenses. From the data on the website, there's no real way to tell what each school is including in its figures.

Re: More Creative Pac-12 AD Accounting - Farm93 - 06-25-2015

(06-24-2015, 11:19 PM)terry link Wrote:[quote author=Farm93 link=topic=12297.msg121232#msg121232 date=1435106915]
The argument presented by others was that those golf proceeds were in some way misleading for athletes trying to understand the resources available to them.

Terry,

I don't believe you were the apples to apples advocate.Â My point, has always been, that the revenue from the golf course is used to support the business.Â Much as a hamburger joint might sell soda.Â At the end of the day a sugary drink is not a burger, but if I am the owner of the burger joint do I really care that my revenue is not from red meat sales?Â The margins may be different, but I would need to disclose the revenue to shareholders even if some analysts might claim that my revenue and business model is not pure.Â Same thing here honestly.

On the apples to apples consistency side, other major FBS schools with golf courses (Michigan, Ohio State, Virginia, etc.) are all including golf course activities in their revenue and expense accounting.Â So Stanford is consistent with the rest in how it handles this "intercollegiate" revenue category.Â I understand it is not pure profit or pure intercollegiate competition revenue, but it is standard practice to include golf operations in intercollegiate athletics tallies (revenue and expenses).

Golf operations is certainly more relevant than weddings or law school and business school banquets, all things now included in UCB AD's intercollegiate athletic revenue.Â And clearly golf operations are more closely tied to intercollegiate sports than ASU AD's emerging land management activities and conversion of local property taxes into ASU AD fees that will also appear as ASU AD intercollegiate revenue.

ASU might be first in counting land management as "intercollegiate" revenue, but I doubt they will be the last.Â The definition of "intercollegiate" will continue to evolve, but I have no doubt that golf course operations will sit safely in the tally for decades to come at both Stanford and the dozens of other colleges with enough land to operate a golf course.

Re: More Creative Pac-12 AD Accounting - CTcard - 06-25-2015

(06-25-2015, 09:39 AM)terry link Wrote:The federal government requires universities to report their revenue and expenses relating to intercollegiate athletics. The most recent year's information is posted on a Department of Education website.

The front page of this effort: http://ope.ed.gov/athletics/
The working page - put in a school's name to get their report: http://ope.ed.gov/athletics/GetOneInstitutionData.aspx

The NCAA also requires some accounting of athletic department budgets. That reporting is not directly available to the public. However, as public institutions are subject to FOI requests, the USA Today acquires these reports from all public Division 1 institutions and publishes some summary statistics. Some differences from the first set of data, and some interesting comparisons.
http://sports.usatoday.com/ncaa/finances/