Apologies for the long post, but this was from an e-mail I received from a well-connected Aggie.
EDIT: I stated this in a comment below with a link to the original source, but some people missed it. The Aggie that sent this to me was NOT the author. I didn't claim he was. However, he did not dispute the facts as being BS. It was simply sent to me with the statement of "Interesting Read"
It basically boils down to showing that the Aggies can't afford to fire Sumlin and how they've dug themselves a pretty large hole trying to compete with UT.
Sumlin's buyout is $20 million, and it is due in full withing 60 days of his firing, so it can't be paid out of cash flow over a period of years and there isn't any mitigation if he were to be employed by another school. $20 million, plus the buyout of the next coach, plus buyouts for the assistant coaches when the new coach wants to bring in his own staff (that is the buyout of the existing Aggie assistants and the assistants the new coach wants on his staff). On top of that, the new coach is going to want a multi year contract with guarantees.
They borrowed $350 million to finance their new stadium, they had somewhere around $50 million in existing facilities debt prior to the stadium project, they owe $20 million to the academic side for the 2006, 2007, 2008, 2009 and 2012 bailouts when AGGIE athletics couldn't pay its bills. There is also additional debt for various other projects. And to service all that debt, they are only pulling in $110 million in revenue (2014-2015 academic year gross athletics revenue). Debt service for the Aggie program is somewhere north of 22%. For programs such as Ohio State or Texas, that number is around 8%.
The Ags don't have the money to fire Sumlin unless someone is willing to step up and write a check for close to $30 million. And this comes at a time when they have hit up donors hard to help fund the new stadium, the Bright upgrades and when the school is trying to manage a $4 billion capital campaign.
The total operating budget for the TAMU System is just over $3.6 billion. For the UT system, that number if north of $17 billion. With the opening of the med school on the UT Austin campus, the operating budget for UT Austin will be greater than that for the entire TAMU system. The non-PUF endowments for the UT Austin campus are more than all the combined endowments of the TAMU System (including their imputed 1/3 of the PUF). By Regents Rule 80303, the PUF revenues dedicated to UT Austin equal the PUF derived revenues for the entire TAMU System.
The state funds UT Austin at 1.5X the level they fund TAMU College Station. The federal funding (per student) of UT Austin is four times that of TAMU College Station. No one in a position of responsibility anywhere in the nation sees TAMU as being one and the same as UT Austin.
The Ags have spent every dime they can get their hands on and borrowed to the hilt to help their sports program try to keep up with UT Austin (the Kyle Field bonds are guaranteed by TAMU System revenues, not just TAMU College Station revenues). They are stretched to the limit on the academic side but especially on the athletic side. Five of the last ten years Aggie athletics has failed to generate sufficient revenues to pay their bills and now they are approaching a half billion in athletics debt they think they can blow another $30 million on a football coach!?
I have been saying for the past few years that A & M is a financial train wreck happening in slow motion. Their having to just shut up and endure Kevin Sumlin is only the first obvious sign of their paying the price for aggying up their finances in trying to do something impossible for them to do, which is to keep up with UT Austin and the UT System.
Aggys believe they paid cash for their stadium. To get the financing for their stadium, they had to pledge revenues from the entire Aggie system because the revenues from the TAMU College Station campus were insufficient to make the deal happen.
As for the AUF, pursuant to the constitution, public endowment money can only be used to finance construction money. It can't be used for operating expenses or athletics. And no, there was no $100 million "windfall" in 2014. Every dime the aggys get from the AUF is already spent on managing the insane growth in student population.
For the Aggies who insist the school didn't build the stadium with mostly borrowed money:
The gross revenue of Aggie athletics is around $110 million/yr. As of now, their expenses are $102 million (2014-2015 academic year figures). The interest expense on the stadium debt is just north of $19 million/yr (this is just starting to kick in. They capitalized - added it in to the amount they borrowed and paid for it out of debt borrowings instead of paying it out of operating cash flow - the first year of interest expense, so the real pain of paying their bills is just setting in.. Once they have to start setting aside money to repay the principal, that figure will be well north of $30 million.
Their men's basketball program costs about $14 million, their football program costs about $25 million and their baseball program around $12 million. So, of $110 million, $19 million for debt service ($91 million left to work with). $51 million for men's major sports ($40 million left to work with). Add in Title IX requirements and facilities maintenance and tell me how they balance their budget (something they already have been unable to do for 5 of the last 10 years).
Because their College Station campus only operates on roughly $1.3 billion/yr, they lacked the unrestricted cash flow to use revenues from their flagship campus to guarantee the $350 million in stadium debt. They had to guarantee revenues from the entire TAMU system to back the Kyle Field bonds. That means TAMU-Corpus, Galveston, Tarleton and the rest of the system will first feel the cutbacks to pay for Aggie athletics. Once that happens, either the alumni step in and bail them out or Aggie athletics go into a nasty downward spiral. This, at a time they are wanting to swell their flagship enrollment to 80,000 and also conduct a $4B capital campaign.
The money simply isn't there for what Aggie dreams of. The only questions are when do they start to admit defeat and scale back and how much damage the bad decisions are going to do to the TAMU system.
Sharp, Perry, Buzbee and their cronies have worked the university into a really bad situation.
EDIT: I stated this in a comment below with a link to the original source, but some people missed it. The Aggie that sent this to me was NOT the author. I didn't claim he was. However, he did not dispute the facts as being BS. It was simply sent to me with the statement of "Interesting Read"
It basically boils down to showing that the Aggies can't afford to fire Sumlin and how they've dug themselves a pretty large hole trying to compete with UT.
Sumlin's buyout is $20 million, and it is due in full withing 60 days of his firing, so it can't be paid out of cash flow over a period of years and there isn't any mitigation if he were to be employed by another school. $20 million, plus the buyout of the next coach, plus buyouts for the assistant coaches when the new coach wants to bring in his own staff (that is the buyout of the existing Aggie assistants and the assistants the new coach wants on his staff). On top of that, the new coach is going to want a multi year contract with guarantees.
They borrowed $350 million to finance their new stadium, they had somewhere around $50 million in existing facilities debt prior to the stadium project, they owe $20 million to the academic side for the 2006, 2007, 2008, 2009 and 2012 bailouts when AGGIE athletics couldn't pay its bills. There is also additional debt for various other projects. And to service all that debt, they are only pulling in $110 million in revenue (2014-2015 academic year gross athletics revenue). Debt service for the Aggie program is somewhere north of 22%. For programs such as Ohio State or Texas, that number is around 8%.
The Ags don't have the money to fire Sumlin unless someone is willing to step up and write a check for close to $30 million. And this comes at a time when they have hit up donors hard to help fund the new stadium, the Bright upgrades and when the school is trying to manage a $4 billion capital campaign.
The total operating budget for the TAMU System is just over $3.6 billion. For the UT system, that number if north of $17 billion. With the opening of the med school on the UT Austin campus, the operating budget for UT Austin will be greater than that for the entire TAMU system. The non-PUF endowments for the UT Austin campus are more than all the combined endowments of the TAMU System (including their imputed 1/3 of the PUF). By Regents Rule 80303, the PUF revenues dedicated to UT Austin equal the PUF derived revenues for the entire TAMU System.
The state funds UT Austin at 1.5X the level they fund TAMU College Station. The federal funding (per student) of UT Austin is four times that of TAMU College Station. No one in a position of responsibility anywhere in the nation sees TAMU as being one and the same as UT Austin.
The Ags have spent every dime they can get their hands on and borrowed to the hilt to help their sports program try to keep up with UT Austin (the Kyle Field bonds are guaranteed by TAMU System revenues, not just TAMU College Station revenues). They are stretched to the limit on the academic side but especially on the athletic side. Five of the last ten years Aggie athletics has failed to generate sufficient revenues to pay their bills and now they are approaching a half billion in athletics debt they think they can blow another $30 million on a football coach!?
I have been saying for the past few years that A & M is a financial train wreck happening in slow motion. Their having to just shut up and endure Kevin Sumlin is only the first obvious sign of their paying the price for aggying up their finances in trying to do something impossible for them to do, which is to keep up with UT Austin and the UT System.
Aggys believe they paid cash for their stadium. To get the financing for their stadium, they had to pledge revenues from the entire Aggie system because the revenues from the TAMU College Station campus were insufficient to make the deal happen.
As for the AUF, pursuant to the constitution, public endowment money can only be used to finance construction money. It can't be used for operating expenses or athletics. And no, there was no $100 million "windfall" in 2014. Every dime the aggys get from the AUF is already spent on managing the insane growth in student population.
For the Aggies who insist the school didn't build the stadium with mostly borrowed money:
The gross revenue of Aggie athletics is around $110 million/yr. As of now, their expenses are $102 million (2014-2015 academic year figures). The interest expense on the stadium debt is just north of $19 million/yr (this is just starting to kick in. They capitalized - added it in to the amount they borrowed and paid for it out of debt borrowings instead of paying it out of operating cash flow - the first year of interest expense, so the real pain of paying their bills is just setting in.. Once they have to start setting aside money to repay the principal, that figure will be well north of $30 million.
Their men's basketball program costs about $14 million, their football program costs about $25 million and their baseball program around $12 million. So, of $110 million, $19 million for debt service ($91 million left to work with). $51 million for men's major sports ($40 million left to work with). Add in Title IX requirements and facilities maintenance and tell me how they balance their budget (something they already have been unable to do for 5 of the last 10 years).
Because their College Station campus only operates on roughly $1.3 billion/yr, they lacked the unrestricted cash flow to use revenues from their flagship campus to guarantee the $350 million in stadium debt. They had to guarantee revenues from the entire TAMU system to back the Kyle Field bonds. That means TAMU-Corpus, Galveston, Tarleton and the rest of the system will first feel the cutbacks to pay for Aggie athletics. Once that happens, either the alumni step in and bail them out or Aggie athletics go into a nasty downward spiral. This, at a time they are wanting to swell their flagship enrollment to 80,000 and also conduct a $4B capital campaign.
The money simply isn't there for what Aggie dreams of. The only questions are when do they start to admit defeat and scale back and how much damage the bad decisions are going to do to the TAMU system.
Sharp, Perry, Buzbee and their cronies have worked the university into a really bad situation.
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