Category Archives: Boosters
BY: LAURA STRAUB
University of Miami fans might be content with the team’s 4-4 start this season, but problems off the field, in particular scandals within the booster program in the past two years, have the potential to plague the success of the program. As with most private universities, Miami’s sports programs are supported through financial support from alumni, professional players, professional businesses and fans, but this system of funding was rocked in the wake of the Nevin Shapiro scandal.
The scandal, which broke during 2010 and 2011, came in the form of a Yahoo Sports Report. The report, complied and written by Charles Robinson implicated over 70 current and former Hurricanes players and coaches for numerous NCAA violations including illegal recruitment tactics such as prostitutes, strip clubs and expensive dinners.
The epicenter of the scandal fell on former Miami University booster Nevin Shapiro and his Ponzi scheme. Through his Ponzi scam, he swindled investors out of over $900 million. Shapiro is now imprisoned and out of the picture; however, this situation has left many questioning whether Miami University will still be able to raise as much money for their athletic programs as they had prior to the scandal.
The University of Miami booster program, The Hurricane Club, has rallied in the face of this scandal and has not only surpassed the 2011 membership mark, but has reached its membership goal of 5,500. The Hurricane Club is celebrating its 40th anniversary with the additional goals of raising scholarship support to $10.1 million and upping participation in their 40/40 program to 40 percent.
Membership in the Hurricane Club can be attained through the purchase of priority seating for either the University of Miami football or basketball games or by an outright annual donation. The annual donation can be made at six different levels with dollar amounts ranging from $40 to $30,000. Annual donations come with an assortment of perks, including lapel pins and car decals, priority to purchase tickets for rivalry and bowl games, and priority seating.
Although Shaprio is currently in prison over his unethical involvement with Hurricane Club funds, the program has had a successful year in reaching their funding goals, evidently showing the significant impact a winning record has in terms of fundraising.
However, attendance at Hurricane’s home football games does not seem to compliment the team’s nor the booster program’s recent success. According to CBS Sports, attendance at the Hurricane’s home opener was 39,345 fans. Yet, a picture taken by Tim Reynolds of the Associated Press from the press box in the second quarter shows an unsettling ratio of empty orange seats to excited fans.
It seems only logical that the success of an athletic program could impact fundraising efforts. This money would go towards more program improvements. Nevertheless, the question of whether or not the fans are overlooking the success of the team because they are disenchanted by the Nevin Shapiro scandal remains to be answered.
It’s a “Which came first, the chicken or the egg?” type question – which propels a school to success: booster support or a top revenue generating conference? Obviously both are important, but which do top-ranked football programs rely upon more?
I recently ran across this article by Michael Lewis of the Salt Lake Tribune where he discusses how crucial it is for Utah to start bringing in contributions that rival those received by other Pac-12 institutions. Utah had its best fundraising year ever last year, raising $5.2 million. However, it’ll need to raise over twice that just to be at the league average of $11 million in the Pac-12. To match the leader in contributions in the Pac-12, USC, Utah will need to raise around $27 million.
I took a look at the financial statements I have for schools and found a familiar trend amongst those who’ve had football success in recent years. The majority receive more in contributions than in conference distributions. So which is more important? Contributions or conference distributions? Does being in a top conference bring you more contributions? Do higher levels of contributions increase your chance of getting into an AQ conference if you’re in a non-AQ conference?
Let’s take a look at last year’s BCS Top 25 and see which schools relied upon more, contributions or conference distributions:
A couple of things to note. First, TCU and Stanford’s numbers are unavailable because they are private institutions. Second, Mississippi State shows no contributions because they chose not to take a distribution from their booster club in fiscal year 2010. Not all schools separate out NCAA and conference distributions, so they are tabulated here together.
As you can see, most of the schools on this list take in significantly more in contributions than in NCAA and conference distributions, regardless of conference affiliation.
Are boosters more important than television contracts or BCS and March Madness appearances? How does a school increase the contribution levels of its alumni to stay competitive?
The Tiger Athletic Foundation exists to raise funds for Louisiana State University and Agricultural and Mechanical College and its intercollegiate athletic department. According to the Foundation, funds raised are used to “defray the cost of scholarships of more than 450 student athletes, to help maintain and improve LSU athletic facilities, and to retire present indebtedness.”
With net assets of over $265 million, the Tiger Athletic Foundation can safely be called the lifeblood of LSU athletics. Here’s a look at how the Foundation’s net assets break down:
|Cash and cash equivalents||$2,791,816.00|
|Accounts receivable, net||$2,072,507.00|
|Unconditional promises to give, net||$9,629,420.00|
|Deferred charges and prepaid expenses||$916,855.00|
|Other current assets||$179,792.00|
|Total current assets||$82,022,087.00|
|Cash and cash equivalents||$45,653.00|
|Unconditional promises to give, net||$1,982,341.00|
|Property and equipment, net||$137,855,929.00|
|Assets held for donation to LSU||$3,460,103.00|
|Other noncurrent assets||$4,677,073.00|
|Total noncurrent assets||$183,376,395.00|
Yes, you read that correctly. The Tiger Athletic Foundation has total assets of over $265 million dollars!
Lest you think the booster club only operates for football, $4.2 million of the “Other noncurrent assets” above is from financing costs associated with the construction of Alex Box baseball stadium. In return for financing the stadium, the Foundation will receive rights to certain seating in the stadium’s suites.
The Foundation’s revenue (shown below) comes from a variety of sources outside of outright donations. Scoreboards and other related equipment at various athletic venues on campus are owned by the Foundation, who then secures sponsorships for the scoreboards to generate revenue. The Foundation also financed improvements to Tiger Stadium in 1999 and 2004 and receives rental payments each year from LSU for the facility. Those payments total $4.5 million per year and are used to pay back bonds issued to finance the improvements.
The University Club is also owned by the Foundation, which receives a rental payment each month from The University Club of Baton Rouge, L.L.C. equal to 6% of the prior month’s gross revenue plus an annual fee per member.
Here’s a look at how the Foundation generated revenue during fiscal year 2010:
|Revenues and Gains|
|Donations from TAF members||$21,961,773.00|
|Rents – University Club and LSU||$4,566,857.00|
|Total revenues and gains||$29,280,436.00|
|Net assets realized from restrictions||$3,199,223.00|
Of course, the Foundation also has expenses:
|Contribution to LSU – athletic dept||$8,252,758.00|
|Contribution to LSU – non-athletic||$163,601.00|
|Tiger Den suites||$4,055,554.00|
|Alex Box suites||$239,356.00|
|General and administrative||$2,316,335.00|
In addition to the $8,252,758 distributed by the Foundation to the athletic department, another $1,371,196 in distributions came from booster clubs and $469,513 from affiliated chapters for a total of $10,257,068 in distributions for the 2009-2010 school year.
Over $3 million in contributions was designated for the football program. That money was used for coaching compensation, recruiting, team travel, gameday expenses, marketing and other operating expenses. Men’s basketball received $98,658, women’s basketball received $91,757 and other sports received a combined total of $3 million. Nearly $4 million was distributed with no sport-specific designation for its use.
Donors often place restrictions on their contribution. Of the $21 million the Foundation has in total restricted assets nearly $3 million is for the annual scholarship fund, more than is restricted for any single sport or facility. Donations for the soccer complex come in at $1.9 million, with restricted funds for the football stadium coming in at $1.8 million. Other restrictions include funds for the LSU Golf Facility, athletic trainer’s equipment, the Academic Center, the Band Hall and many other athletic-related projects.
Although I haven’t shared them, I have reviewed the financials of several booster clubs. A unique aspect of Tiger Athletic Foundation is the fact that it has financed some of the athletic facilities and receives rent from the athletic department for use of those facilities. Most of what I’ve seen at other schools is the athletic department itself financing the facilities and including that debt on their own balance sheet. That’s not to say one way is better than the other, but it makes comparing booster finances side by side nearly impossible.
For example, the Gator Boosters, the University of Florida’s booster club/athletic foundation, shows only $1 million in net assets, because they do not own or finance any of the facilities and transfer virtually all of their operating income to the University Athletic Association each year. Where the Tiger Athletic Foundation transferred just over $8 million to the athletic department in fiscal year 2010, the Gator Boosters transferred $39.5 million. For that reason, I’ll be showing you booster club financials one at a time and will not be making direct comparisons unless it is clear they can fairly be made.
Regardless of how a booster club chooses to function, it is clear that they are an important part of funding an athletic department. It is no surprise that LSU is a self-sustaining athletic department now that you’ve seen the kind of assets the booster club maintains.
*All figures are from the audited financial statements of Tiger Athletic Foundation for the years ending December 31, 2010 and 2009.