Georgia Tech’s Recruiting Expenses

Previously, BusinessofCollegeSports.com showed you which schools spent the most on recruiting per data obtained from the Department of Education.  In reporting this data, BusinessofCollegeSports.com noted that imperfections exist within the data, but that the Department of Education data was the only publicly available source listing recruiting expenses for public and private institutions.

After that report was published, BusinessofCollegeSports.com followed up with several schools in an effort to obtain more accurate records of their recruiting expenses.  Georgia Tech Athletics’ Chief Financial Officer, Frank Hardymon, graciously detailed Georgia Tech’s recruiting expenses for BusinessofCollegeSports.com

Per data obtained from the Department of Education, Georgia Tech’s recruiting expenses were the 7th highest of all BCS schools in 2010-11.  In that year, Georgia Tech had total recruiting expenditures of $1,489,599.00, spending $1,173,904.00 on recruiting for its men’s sports and $315,695.00 on its women’s sports.  Georgia Tech’s total recruiting expenditures put it only behind those of Tennessee, Auburn, Notre Dame, Alabama, Georgia and Florida, when comparing data submitted to the Department of Education.

Hardymon was able to provide logical explanations as to why Georgia Tech’s recruiting expenses appeared higher than most other BCS schools.  In simplest terms, every school reports things differently.  Hardymon explained, “Everybody reports things differently.  Every school has different ways of doing accounting, so they show expenses under different categories.” 

Additionally, Hardymon explained that the items the Department of Education asks to be reported are not the same as what is required to be reported to the NCAA.  Thus, it is possible that a school’s revenues and expenses may appear to be different on each report.  “You can end up with two completely different bottom lines, which can lead people to question the quality of your accounting if you have two different totals,” said Hardymon. 

Furthermore, according to Hardymon, the Department of Education does not want athletics departments to report losses.  Thus, while the Department of Education report depicts many athletics departments having zero net income in 2010-11, it is possible that many of these athletics departments actually suffered a loss in 2010-11.  “Their theory is, if you had a loss, you’re still an operating entity, so somebody must have covered it for you.  They have us report the loss as if the school floated us the difference,” said Hardymon.  For athletics departments like Georgia Tech, which are a separate corporation from their university counterpart, this presents an issue, as the athletics department is solely responsible for any losses it incurs.

Hardymon noted that Georgia Tech is “very inclusive on recruiting” in terms of what the athletics department shows as a recruiting expense on its reports to the Department of Education and NCAA.  Part of Georgia Tech’s ability to inclusively report its recruiting expenses, is the result of the accounting system Georgia Tech uses.  Hardymon explained, “We are able to code a lot of things as recruiting.  So anything—even if it isn’t an immediate recruiting expense, but is going to turn into one, like buying envelopes, stationary and postage to be sent to recruits—is going to be listed as a recruiting expense.”   

Georgia Tech’s inclusiveness in reporting its recruiting expenses is likely what made its expenses the seventh-highest of all BCS schools in the Department of Education report.  While the Department of Education report only reports recruiting expenses as lump sum numbers, Hardymon provided BusinessofCollegeSports.com with an inside look of what some of the $1,489,599.00 spent by Georgia Tech on recruiting went toward.

First, the football program undertook an initiative to update the materials it distributes externally.  “Football makes a pretty strong commitment to communicate in writing with potential recruits,” said Hardymon.  According to Hardymon, “this initiative created $300,000.00 in expenses for the Athletic Association, which were categorized in football recruiting.”  It is important to note that the entire $300,000.00 was expensed towards recruiting in 2010-11, although some of the materials will be used for years beyond 2010-11.  Hardymon asserted that when “office-type expenses,” like the football program mailers were removed from Georgia Tech’s recruiting expenses, Georgia Tech’s recruiting expense total fell below $1 million.  Hardymon believes that this number is a more accurate representation of Georgia Tech’s recruiting expenses when compared to those of other programs.

The bulk of Georgia Tech’s recruiting expenses went towards travel costs.  In 2010-11, Georgia Tech spent $1,007,897.00 total on airfare, meals, hotels, entertainment, transportation, and development for on and off-campus recruiting.  The big-ticket item in Georgia Tech’s travel expenses for recruiting, though, is airfare expenses incurred by both basketball programs and the football program.  Hardymon said that while Georgia Tech does use a charter airline company, the company is relatively inexpensive and that the coaches also largely use commercial airlines to travel.  

 The numbers provided by Hardymon related to Georgia Tech’s recruiting expenses, along with his explanations as to why different athletics department’s expenses may seem vastly different, provided great insight into the budgetary concerns of a top athletics department.