clock menu more-arrow no yes

Filed under:

Whiny whiners need to stop whining

New, 76 comments

Remember what I said about the whining?

Kelley L Cox-USA TODAY Sports

As an attorney, my job is to emphasize certain pieces of context, while de-emphasizing other contextual pieces. Some people call it lying. Those people are just bad attorneys.

But one thing I always hate, no matter what, is when people try to completely and totally deny context, be it in my professional life or personal life. Today, we are not talking the law, we are talking Cal Athletics financials. We received the Fiscal Year 2014 numbers and the #1 thing that jumped out at me is that whiny whiners who whiny need to stop fucking whining.

See, starting in roughly 2010, a group of people (led by mutinous professors, like Brian Barsky) started complaining about money that UC Berkeley gave to the Department. The school gives money and receives money back, but they focused solely on the money provided to the department by the school. In a time of extreme budget cutbacks in Sacramento, they complained about any money going to subsidize athletics. They were extremely successful in creating this narrative about a financial mismanaged department needing the backing of a school struggling to support itself.  Even today, this narrative continues, look at this comment from valued reader and genuine good guy at heart Joe Bandsmen, very recently:


Thank you
I didn't see a year on that page at all, so I was taking it as current. Either way, there is still a significant amount of money coming from the campus to support Athletics at present, and we should be working to lower it.

"Our hearts shall sing and our voices ring for the dear old Blue and Gold!"

"For victory means fame in California's name, So FIGHT FIGHT FIGHT 'em California!"
by Joe Bandsmen on May 8, 2015 | 1:53 PM up reply rec flag actions

Quickly, this narrative is wholly wrong for the following reasons:


1.  The vast, vast, vast amount of athletic departments receive substantial funds from their schools.


2.  When you have a program with 27 money-losing products and 2 profitable products, it is extremely hard to actually make a profit.


3.  Cal Athletics was almost uniformly alone in working towards lowering these subsidies.


I outlined these in further detail in this post here. So, fundamentally, the subsidies in and of themselves are not that bad. But even if they were, do I have great news for you: THEY ARE GONE!


PRAISE BE TO JESUS! HALLELUJAH! Somebody start blasting some Kirk Franklin, Ima start dancing. But don't be too loud, I just put my daughter down for a nap.


How do I know this? Well, let's look at the 2014 FY here. You can see all of the documents going back to 2002 here. That states that there was approx $3.5 mil in Direct Institutional Support. However, there was approx $3.4 mil in Transfers To Institution. There is roughly a $50,000.00 difference in numbers, which mean the support from Berkeley is like evolution...IT DON'T EXIST!


Valued reader BandAlum put this great chart together here:


difference 2014


Even if you are just looking at the Direct Institutional Support itself, those numbers have decreased substantially.


DIS


It went from $6.1 mil to $3.5 mil from 2013 to 2014, which is a great drop. In 2010, it was $10 mil and the difference amount was $9.95 at that time, meaning there were few transfers back to Cal. The situation has reversed itself in just a few years and all the whiny whiners need to stop whining!


Now, I realize I've already handed my passport to the custom agent at Hottakeistan and ventured deep into its Here There Be Dragons landscape. At CGB, we like to dig deeper and look at other factors for the Department financially. While some aspects are as rosy as Rose from Downton Abbey, others are as emotionally immature and petulant as Rose's mom from Downton Abbey (that anti-semite!).

BIG PICTURE

With our hot take out of the way, let's drink a tall glass of cool takes, starting with the larger picture here. Cal started the year (aka July 1, 2013) with approx $10 mil in cash laying around, as you tend to do. I have roughly that stacked up in my Scrooge McDuck-style money pool right now! It ended the year (aka June 30, 2014) with approx $6.7 mil. So, Cal lost $3.3 mil along the way. Coulda used more DIS from the school! They had $90 mil in income (compared to $93 the year before) on $76 mil in expenses (same as the year before).


Why did we end up losing this amount of money? One major aspect is the $16 mil we put towards Debt Service for CMS. We saw that starting in FY 2013 and it will last for the next half-century or so. $16 mil is a LOT of money! We could buy a significant amount of penny candy and bowties with that money. Why would Cal Athletics want to spend penny millions on cheap ass candy and the world's finest bowties? For that, you would have to ask bowtie aficionado and current permanent Athletic Director, Michael "Michael Williams" Williams.

So, that is going to hamstring Cal quite a bit. We've already discussed the gameplan for Athletics to pay off the debt and everything seems appropriate there, but at the end of the day you would rather have that $16 mil to use for other expenses (as all of our Pac12 opponents do). Of course, at the end of the day you'd rather have the updated non-death trap Memorial Stadium, so I guess it evens out.

ENDOWMENT

One way that Cal is able to make the books balance is through increased usage of endowment income. In FY14, Cal utilized $13 mil in endowment/investment income. This is part of a pattern of sharp increases in endowment usage over time. Check out this chart by BandAlum:


Endowment


I am of two minds of this (and have stated this repeatedly). Firstly, this means that Cal essentially lost $16 mil or so and used $13 of its own money to cover part of those expenses. So, thing are not quite as financially rosy as "merely" at $3.3 mil loss would have one think. However, in the larger scheme of things, endowment income is supposed to be used for funding the program. That is the point of the endowment. If we are touching endowment principal, then that is disastrous.

TICKET SALES

Ticket sales are an especially important part of the financial engine here. In FY14, Cal made $14.2 in ticket sales, which is the third highest income piece after contributions and NCAA Distributions. Of this, $10.3 stemmed from football, which is 73.3% of the total. FY14 includes the 2013 football season (perhaps Cal's worst ever) and the run up to the 2014 football season. Given how Cal did in 2013 football, you would expect to see a drop in the ticket sales, especially football. While we did see a drop, it was fairly minor. Overall, it was a $300,000.00 decrease and $700,000 in football sales. We actually got ticket sales in other avenues to increase $400,000.00, offsetting the football loss. BandAlum provided a chart here, too:


ticket sales
Now, in FY15, we should see a potential uptick in sales. Football overperformed and in the last period of time, the basketball team ticket sales probably exploded. I know I put down a $100 deposit on season tickets! You should too!

CONTRIBUTIONS

One downside was the amount of contributions to the Department in FY14. This is not unexpected. FY13 included the firing of Tedford and hiring of Dykes. Contributions EXPLODED!  FY14 included perhaps the worst football season in history, turning off fans. So, while Cal received $26 mil in 2013, it got $3.5 million less in FY14. That is a major drop right there. Check out BandAlum's chart here.


contributions


So, go and donate! FY15 will probably see a slight uptick here due to the surprising season, but I would not anticipate a massive improvement here.

CONCLUSIONS!

You wanted conclusions, didn't you? You've been demanding some sort of brief summary that ties together larger issues while also having vaguely witty comments that don't really make any sense. Well, let's conclude then with the following comments:


No more complaints about the school supporting the Department.

No more complaints about the school supporting the Department

No more complaints about the school supporting the Department

No more complaints about the school supporting the Department

No more complaints about the school supporting the Department

No more complaints about the school supporting the Department

No more complaints about the school supporting the Department

IN SPANISH:

No hay más quejas sobre la escuela de apoyo del Departamento

No hay más quejas sobre la escuela de apoyo del Departamento

No hay más quejas sobre la escuela de apoyo del Departamento

No hay más quejas sobre la escuela de apoyo del Departamento

No hay más quejas sobre la escuela de apoyo del Departamento

No hay más quejas sobre la escuela de apoyo del Departamento

IN AFRIKAANS:

Nie meer klagtes oor die skool ondersteun die Departement

Nie meer klagtes oor die skool ondersteun die Departement

Nie meer klagtes oor die skool ondersteun die Departement

Nie meer klagtes oor die skool ondersteun die Departement

Nie meer klagtes oor die skool ondersteun die Departement

Nie meer klagtes oor die skool ondersteun die Departement

IN CHINESE (SIMPLIFIED):

没有关于学校配套系的投诉
没有关于学校配套系的投诉
没有关于学校配套系的投诉
没有关于学校配套系的投诉
没有关于学校配套系的投诉

I guess at the end of the day, my point is Google Translate has a significant amount of options.

Plus, whether it is due to increased endowment spending or increase transfers back to the institutions, the Department does not need the school as much. What other institutions can say that?


The Department is somehow having its cake and eating it, too. It is paying off its debt without the debt crushing the functioning of the Department. No idea if they can do this long term. We will have to just track it year by year.


Trying to write this while watching Pitch Perfect is not easy, so let's end this GO BELLAS!!!!!!!!!!!!!!!!!!!!!!