Georgia athletics positioned to weather economic storm

dhale@macon.comFebruary 22, 2009 

ATHENS — In living rooms and boardrooms across the country, it has been the primary topic of conversation for months, and the struggling economy hasn’t gone unnoticed in the offices of Georgia’s athletics association, despite seemingly strong earnings.

Georgia is one of just a handful of athletics programs to routinely post positive earnings and could turn a profit of more than $20 million in 2009, but that doesn’t mean there won’t be a bit of belt tightening for the school’s various athletics programs.

“It’s not like we were saying, ‘Oh everything’s great,’ ” athletics director Damon Evans said. “We’re at a time when everyone’s talking about changing the way they do things. We need to change the way that we do things, too, but not as drastically maybe as some others.”

While the bottom line remains strong for Georgia, contributions required for the purchase of season tickets are down more than 10 percent this year, The Atlanta Journal Constitution reported, and Evans said he expects the struggling economy to continue to affect donations and ticket sales moving forward.

Georgia is just beginning to feel the sting of the current economic woes, but around the country, athletics departments are struggling to find ways to trim expenses. Miami will bus its football team to several in-state games this year in order to trim travel expenses. Ohio State has reduced the travel per diem for players and coaches. At Georgia Tech, attendance for both football and basketball — the two primary revenue-generating sports — is down, and the school is looking for ways to cut spending to make up for the shortcomings.

At Georgia, the problems aren’t so pronounced. In fact, the athletics department has seen enough influx of cash to approve a $2 million annual donation to the school’s academic efforts at its most recent athletic association meeting.

The financial flexibility the school is enjoying is a result of a strong fiscal plan that Evans and the athletic association have had in place for years.

“What I want fans to know, and the people who have contributed money to us, the reason that we’re OK and in a decent position right now is because we’ve been fiscally prudent in the manner with which we handle the financial affairs of this athletics program,” Evans said. “I’ve always wanted the fans and our supporters to know that we’re not going to be irresponsible with regard to how we manage the money within the association.”

That mind-set means Georgia won’t use its current bottom line to plan for a future that could be far less profitable.

Evans said many of the reports he has gotten indicate the economic difficulties aren’t likely to improve in the near future, and he plans to adjust the association’s spending accordingly.

Travel expenses could be cut, Evans said, and the school likely will delay large capital investments until the economy begins to recover.

“That’s the way it’s going to hit us,” Evans said. “A lot of things are uncertain, but just like everybody else right now, even if you have some money, you’re still bracing yourself. You’re not readily willing to spend that money right now because you’re kind of concerned with what’s going to happen.”

Evans said plans for an expansion to the Butts-Mehre athletics building, which currently houses the associations executive offices and football facilities, remain on schedule, although final plans have yet to be approved.

Other large-scale investments, however, are likely to be cut, with only the most integral investments remaining on track because of expected reductions in revenue, rising costs and increased difficulty finding financing for large-scale investments.

“When you have a big master plan like we had and you’re trying to prioritize those projects and say, ‘OK, these are our top six projects,’ well, now instead of being able to do those six, you may only be able to do two,” Evans said.

The adjustments to the school’s long-term plans are in line with Evans’ overall financial philosophy.

The revenue the athletics programs — mainly football — have generated during the past few years have been used as much to reduce overall capital debt as for expansion projects, keeping Georgia well positioned to weather the economic downturn.

“For us, it hasn’t just started now,” Evans said. “I don’t think to be in the financial position that we’re in right now is being a work in progress. It’s positioning ourselves for times like this when things aren’t going good.”

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