Sports Business Journal has some details about Tennessee’s athletic department finances. It is not healthy. The Vols are $200 million in debt, spend $21 million per year making debt payments and have less than $2 million available in reserves. Ouch.
Now, after staggering to losing football seasons in four of the last five years and seeing attendance drop to levels last seen in the 1970s, the Vols find themselves mired in more than $200 million of debt, the most in the SEC, with reserves of just $1.95 million, the least in the conference.
The athletic department spends a startling $21 million a year on debt payments, $13.5 million of which comes from the school’s stressed $99.5 million athletic budget and the rest from donations.
How did the finances get so bad? There are the five-percent “amusement tax,” the $7 million per year payment back to the university the department was making and the more than $11 million spent on coach buyouts (not including Dooley). The true culprits, though, appear to be football stink and over-expansion.
Tennessee has a new $50 million athletic facility and made $130 million in renovations to Neyland stadium. At the same time, average football attendance dipped below 90,000 in 2012, from more than 107,000 in 2000.
This explains why Tennessee reportedly held the line with Gruden about the assistant budget. The enhanced postseason revenue should help, though Tennessee needs to get good at football soon. No pressure, Butch.
[Photo via USA Today Sports]