UT vs. Auburn vs. Missouri

#76
#76
Exfix said:
This is all very rational and true. Also I am pro Tyndall as a second choice to White. However, you must also factor the expected rate of return on any financial investment. Similar to buying a house for the purpose of renting it out. If you are able to leverage some debt to pay more for the house (or coach), with a higher expected long term rate of return, then that's what you do. As an AD you must factor in the increased returns from 1)excitement about the program and 2)actual wins. Tyndall may end up a great choice for that, but there were others that probably could have been considered based on their expected return to the AD.
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Return on investment is an important part of any decision. So, for the sake of argument, let's look at a few numbers. Let's say that the UTAD is running in a situation where it is revenue neutral (which really isn't far from the truth). If my recollection is correct, numbers I have seen indicate that basketball produces a slight profit on its own.

So you hire a guy like Tyndall at 1.1 million (see edit below), which is in rough figures about what Zo was making before the raise he declined by going to Cal.

Let's say the alternative hire costs 3.1 million, or a difference of two million. What sort of return must he have to just pay for himself?

Well, let's say that fans are incredibly motivated and instead of averaging 17k a home game(*1), TBA is sold out (22k)(*2). That means that 5k more fans come to every home game, which puts UT roughly at Kentucky's attendance numbers. At about 20 home games, that is 100k extra fans over a season, right?

So, it requires a sold out capacity at an average ticket price for the 5k extra tickets of $22.8 dollars (20$ base price plus 14% City of Knoxville tax) for the each of the 5 thousand extra fans he would bring, over each of the 20 home games in Knoxville, to simply pay for himself.

Now that we have broken even, how do we make a profit on this investment?

Well, if you want 2 million in profit from merchandise (you're already maxed out at TBA unless you want to raise ticket prices substantially), at a roughly 15% cut from licensing that UT nets, that requires the new coach motivates fans to buy an extra 13.34 million dollars worth of merchandise on basketball alone...PER YEAR.

Or, to put it another way...every one of the 440,000 total people who attend sold out UT men's basketball games, would also then have to buy a $30 shirt every game they attend.

This is a very simplified and rough illustration, I admit. But, it begs the question do you know of any coach who could sell out TBA every game, then motivate the fans in attendance to purchase a 30$ new shirt, each, for every game they attend? Or, to simply sell 440,000 fans on the street one 30$ basketball shirt each, every year?

Then, is that coach GUARANTEED to recruit well and win, thus being able to prove that this model is sustainable long enough to return the investment, as you suggest? What about the buy-out that a supposed "top tier" coach would require if he doesn't work out and had to be released? If the buy-out was $6 million after the second year, and he was released, this great expensive coach nets -2 million dollars.


(*1) http://fs.ncaa.org/Docs/stats/m_basketball_RB/Reports/attend/2013.pdf

(*2)
Thompson

EDIT: My figures on pay are off a bit, but you get the gist, I hope.

Here is the MOU. http://grfx.cstv.com/photos/schools...to_pdf/2013-14/misc_non_event/MOU_Tyndall.pdf
 
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#77
#77
daj2576 said:
Since 2008, UT has had to pay:

Fulmer $6 million
Pearl $0.95 million
Raleigh $0.33 million
Hamilton $1.3 million <---WTF?!
Dooley $5 million
-assistants $2 million

So, for those keeping score, that is over $14 million dollars in coaching buyouts, not including a couple million for those not retained from Kiff's staff, or the roughly 1 million that he and Orgeron had to pay back to the school, or the 1.3 million or so that Cuonzo owes UT (Call the Kiff's staff buyout and Cunzo/Kiff/Orgeron payback a wash). Also, consider how poorly Hamilton wrote contracts. When Kiff left, he owed UT something like $800,000, if he had been fired at the exact same moment, UT would have owed him $7.5 million.

$14 million dollars since 2008.

Add to that about 7 million a year going back to the academic side (see: University Diaries » “Tennessee’s athletic department is more than $200 million in debt, which is the most in the SEC. Moreover, Tennessee has reserves of just $1.95 million, which is the least in the SEC. “) prior to those payments being temporarily "suspended" around the hiring of Butch (Don't blame Hamilton alone for that, Gen. Neyland started the precedent of giving money from athletics towards purely academic scholarships).

Add to that around $200 million dollars of debt.

Oh, and while we're talking about how much money the AD spends, consider who else gets a cut of money that the AD makes...

The city of Knoxville taxes ticket sales at something like a 14% clip (so each time you buy a ticket at face value from the school, only 86% of that is retained), and as a general rule merchandise only produces about 15% revenue (so each time you buy a 30$ shirt, UT might get about $4.50). Or, to visualize this another way, when you go to Knoxville on a Saturday in the fall, you buy two tickets at $70 each from the University, plus 4 $30 shirts from Alumni Hall, or Hound Dogs, you have spent $260 supporting your favorite team, but the University might only see about $140 of that.

So, for anyone who is pissing and moaning that UT is bargain basement shopping, I say that you need to consider the reality of the situation and look at not only how much UT can afford, but the quality of coach for that price. This mess will take patience and time to recover from, and the current AD cannot be blamed. In fact, I believe he should be applauded for walking away from any deal that is not in the best interest of UT's finances when the outcome is not guaranteed (assuming the stories of White's buyout negotiations are correct). Sometimes it isn't the salary that is the issue, but the buyout. Big name coaches might demand a $3 million salary, which UT could probably absorb, the problem is that they would want a longer term guarantee and a buy out that could then be in the $10 million dollar range. That isn't what UT can afford should the relationship go sour.

Sources:

Tennessee Volunteers athletic department posts $3.98 million deficit - ESPN

Coach firings add up for University of Tennessee » GoVolsXtra

University Diaries » “Tennessee’s athletic department is more than $200 million in debt, which is the most in the SEC. Moreover, Tennessee has reserves of just $1.95 million, which is the least in the SEC. “

Firing a Coach, at a Price, With Little Evidence the Move Pays Off
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Excellent summary. I can't disagree with all of that. That said, part of being the AD is fundraising. You have to get your biggest donors excited about new hires and the future so that you can raise money. The other thing I will say is that people are assets, too. I love our facilities, but we have stressed so much on buildings that we have missed the boat on hiring "people" to run our programs. Just simply ask some big donors to contribute to a coach fund instead of a building fund. I promise, we will put your name somewhere. I applaud Hart for trying to (or actually doing it) fix it. But, at some point, we can't feel sorry for ourselves about the financial situation. Go out, raise money, and spend the money to hire good people to run our programs. I think (and hope) we might be there. But, you would think we would learn from the prior 6 basketball hires. JMO.
 
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#79
#79
VolGee4 said:
Excellent summary. I can't disagree with all of that. That said, part of being the AD is fundraising. You have to get your biggest donors excited about new hires and the future so that you can raise money. The other thing I will say is that people are assets, too. I love our facilities, but we have stressed so much on buildings that we have missed the boat on hiring "people" to run our programs. Just simply ask some big donors to contribute to a coach fund instead of a building fund. I promise, we will put your name somewhere. I applaud Hart for trying to (or actually doing it) fix it. But, at some point, we can't feel sorry for ourselves about the financial situation. Go out, raise money, and spend the money to hire good people to run our programs. I think (and hope) we might be there. But, you would think we would learn from the prior 6 basketball hires. JMO.
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:hi: very we'll said sir!
 
#80
#80
They will end up with Marshall or shake and we will still g3t our butts handed to us
TeazyT said:
Get ready to add Florida to the list of schools making a hire.

EVERYONE that is a part of VN better be praying to God that a deal with the t'wolves and Donnovan works out
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#84
#84
Domestic Silence said:
I want Hart to see what his pride will cost him. When Tyndall doesn't know what to do and Pearl is running that ass up and down the court, I want Hart to personally see what it is everyone wanted.
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Your post is out of place, have another drink and go to bed.
 
#85
#85
VolAllen said:
Yeaaaa well, not **** you can do about that.
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500px-Watch-out-we-got-a-badass-over-here-meme.png


You should probably go ahead and take the "Vol" out of your username, since the University of Tennessee means absolutely nothing to you.
 
#89
#89
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#91
#91
All of this Pearl boot licking is pretty nauseating. Mr.Show Cause Penalty will encounter more problems on the recruiting front than some of you seem to think. It will be so easy to negatively recruit against him now and Auburn is a tough job. To those that think Pearl will make us rue the day we fired his lying ass, I say BRING IT ON DOWN!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
 
#92
#92
BowlBrother85 said:
All of this Pearl boot licking is pretty nauseating. Mr.Show Cause Penalty will encounter more problems on the recruiting front than some of you seem to think. It will be so easy to negatively recruit against him now and Auburn is a tough job. To those that think Pearl will make us rue the day we fired his lying ass, I say BRING IT ON DOWN!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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Pack another bowl, brother.
 
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#96
#96
daj2576 said:
Return on investment is an important part of any decision. So, for the sake of argument, let's look at a few numbers. Let's say that the UTAD is running in a situation where it is revenue neutral (which really isn't far from the truth). If my recollection is correct, numbers I have seen indicate that basketball produces a slight profit on its own.

So you hire a guy like Tyndall at 1.1 million (see edit below), which is in rough figures about what Zo was making before the raise he declined by going to Cal.

Let's say the alternative hire costs 3.1 million, or a difference of two million. What sort of return must he have to just pay for himself?

Well, let's say that fans are incredibly motivated and instead of averaging 17k a home game(*1), TBA is sold out (22k)(*2). That means that 5k more fans come to every home game, which puts UT roughly at Kentucky's attendance numbers. At about 20 home games, that is 100k extra fans over a season, right?

So, it requires a sold out capacity at an average ticket price for the 5k extra tickets of $22.8 dollars (20$ base price plus 14% City of Knoxville tax) for the each of the 5 thousand extra fans he would bring, over each of the 20 home games in Knoxville, to simply pay for himself.

Now that we have broken even, how do we make a profit on this investment?

Well, if you want 2 million in profit from merchandise (you're already maxed out at TBA unless you want to raise ticket prices substantially), at a roughly 15% cut from licensing that UT nets, that requires the new coach motivates fans to buy an extra 13.34 million dollars worth of merchandise on basketball alone...PER YEAR.

Or, to put it another way...every one of the 440,000 total people who attend sold out UT men's basketball games, would also then have to buy a $30 shirt every game they attend.

This is a very simplified and rough illustration, I admit. But, it begs the question do you know of any coach who could sell out TBA every game, then motivate the fans in attendance to purchase a 30$ new shirt, each, for every game they attend? Or, to simply sell 440,000 fans on the street one 30$ basketball shirt each, every year?

Then, is that coach GUARANTEED to recruit well and win, thus being able to prove that this model is sustainable long enough to return the investment, as you suggest? What about the buy-out that a supposed "top tier" coach would require if he doesn't work out and had to be released? If the buy-out was $6 million after the second year, and he was released, this great expensive coach nets -2 million dollars.


(*1) http://fs.ncaa.org/Docs/stats/m_basketball_RB/Reports/attend/2013.pdf

(*2)
Thompson

EDIT: My figures on pay are off a bit, but you get the gist, I hope.

Here is the MOU. http://grfx.cstv.com/photos/schools...to_pdf/2013-14/misc_non_event/MOU_Tyndall.pdf
Click to expand...

Can I hire you as my accountant?
 
#98
#98
Domestic Silence said:
How is my comment of wanting to pull for the only person in this equation who gave a damn about this unviersity a ridiculous statement?

Please tell me all of the good Dave Hart has done for Tennessee.
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I was upset that we let Bruce get away and go to another SEC school, but he is the coach of Auburn now and no way in hell will I pull for Auburn to beat Tennessee.
Hopefully this new coach will make us say Bruce who.
 
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