“Money. You don’t know where it’s been, but you put it where your mouth is. And it talks.”— Dana Gioia
To Gioia’s point, Georgia Tech’s money (or lack thereof) talks — a lot. There’s a reason why this part of the series has been saved for last: the financial situation at the Edge defines and restricts so much of what Tech can do both on and off the field. Tech’s finances sit at the confluence of all of the factors we’ve discussed before; in many ways the athletic department’s balance sheets reflect the cumulative effect of all of these historic shifts in demographics, institutional priorities, and culture. Let’s dig in.
We analyzed Georgia Tech’s financial situation (circa 2019, but things haven’t changed that much since) in a previous piece — the major lowlight for the program is the amount spent annually (~$14MM / 14% of the budget) to make a dent in a lodestone around the program’s neck. Some figures from that piece:
What constitutes that lodestone you might ask? Well, GTAA’s 2019 financial statement plays back most of the hits, but here’s a condensed summary of costs and projects:
- 2001 Bond Issuance: $111,255,000 - Russ Chandler Stadium studs-up renovation, Rollover of $22M principal left over from 1995 Bobby Dodd Stadium renovation
- 2008 Bond Issuance: $20,000,000 - Updated scoreboards and stadium maintenance at Bobby Dodd Stadium, Turf replacement at the football practice field, Construction of Shirley Mewborn Field, Construction of Zelnak Practice Facility, Construction of locker rooms at O’Keefe Gym, Upgrades to athletics weight rooms (assumedly the one in BDS’ south end zone)
- 2011 Bond Issuance: $88,775,000 - Rolled over principal from the 2008 bonds, Construction of McCamish Pavilion, Construction of Brock Practice Facility
- 2012 Bond Issuance: Refinancing 2001 bonds ($94,285,000), Terminated a 2004 swaption with UBS ($28,010,000), Construction of Ken Byers Tennis Complex ($12,000,000)
- 2013 SunTrust Bank loan: $9,000,000 - Land purchase/construction of Noonan Golf Facility
- 2018 SunTrust Bank loan: $10,000,000 - Construction and equipment of ACC Network studio
More information about Georgia Tech Athletics’ debt situation can be found in the aforementioned 2019 financial report and in the more-recent Institute wide report.
What’s the balance (pun fully intended)? The Georgia Tech Athletic Association is woefully hamstrung by debt: nearly $300MM of it, as of October 10, 2022. The program seems to have started the millennium by kicking off multiple major program infrastructure projects without donor funding in place to cover the cost and was forced to take on large swathes of debt to keep up with the Joneses even before the Joneses embarked on their more recent spendthrift escapades. Were facilities upgrades necessary? In the cases of basketball, baseball, and softball, absolutely. Could they have been funded in a more sustainable way? Also, yes.
Again, Tech spends about 14% of its annual budget on paying off this debt — instead of endowing scholarships, paying academic tutors, or refreshing uniforms/equipment, that money goes straight into a bank’s pocket to pay off bad fiscal decisions made two decades ago.
While his predecessors might not have worked to the full extent of their ability to leave him with a well-oiled machine, now-former Athletic Director Todd Stansbury oversaw healthy and fairly successful programs in every sport other than football (and MBB, to an extent, but they’re generally on an upward trend). He was also the spokesperson for the single largest fundraising campaign in the history of Georgia Tech athletics. The Athletic Association’s AI2020 Initiative beat its $125MM goal by $50MM in spite of running through the middle of a global pandemic. But the fact that this wildly successful campaign is Tech Athletics’ largest in school history is emblematic of the problem: it took Georgia Tech three years to raise the money that any SEC program (for example, Tennessee) can raise at the snap of a finger. Is it fair to compare Tech’s finances to that of SEC programs? Not necessarily — but that’s the geographic reality Tech is facing in the heart of SEC country and a city heavily recruited by the top teams in that conference.
Money In, Money Out
Over the past decade or so, we’ve seen an absolute explosion in college athletics investment, particularly in football (and particularly led by the very conference that dominates Georgia Tech’s geography). Look at the growth of median athletics expenditure by P5 schools (sourced from this NCAA financial report):
The median spend for P5 programs increasing from roughly $45MM to $120MM in 14 years is insane, but it probably won’t come as a surprise when we tell you that Georgia Tech is below that median. While the median P5 school has undergone a 166% increase in athletics expenditure, Georgia Tech has only increased its own athletics spending by 98% over the same time period. In 2005, Tech found itself right at the median spending $43MM, but somewhere around 2008, the gap began to increase. In 2019, Tech “only” spent about $86MM - about $35MM below the median. Looking at the broader landscape, Tech’s growth in spending looks much more like the typical G5 school rather than its P5 peers.
In 2021, Tech spent about $19MM on football; that’s around half of what schools like Clemson and FSU spent. That mark is still several million dollars a year away from other ACC Coastal competitors like UVA ($24MM), VT ($27MM), and UNC ($30MM). Modern college athletics (especially football) is dominantly driven by one thing: money. Facilities, coaches, analysts, recruiting, training, medical, travel: they all cost money and lots of it. At some level, Tech simply cannot expect to compete with programs that are outspending it by such large margins. Looking at the growth numbers again since 2005, Tech’s football spending has been relatively stagnant aside from a spike in 2019 (when Tech hired entirely new staff at a higher rate):
$12.8MM to $19.8MM is a 55% increase. Compare that to 93% for VT, 158% for Louisville, 188% for UNC, 219% for NC State, and 257% for Clemson (want to know how they became a powerhouse?). This financial context is a huge reason why comparisons between Tech and other top academic universities like Michigan or Stanford are flawed: Michigan spends $37MM a year on football (part of $150MM for all athletics!) while Stanford spends $27MM (part of $133MM for all athletics!). Any conversation about relative success in college football has to begin with an understanding of where the money is and where it’s going.
Sources of Revenue
Part of this is of course a revenue problem; as an example, UVA and UNC both bring in over $100MM a year in revenue — about $15MM more than Tech. When comparing the breakdown in revenue sources, the major factor becomes clear: Tech is severely lagging in donor contributions. In 2021, the Edge received almost $8MM in donor contributions:
Compare that mark to the rest of the public ACC in 2021:
- Clemson: $62MM
- FSU: $48MM
- UNC: $38MM
- NC State: $25MM
- UVA: $25MM
- VT: $16MM
- Louisville: $12MM
Over the past five or so years, Tech’s donor contributions haven’t spiked above $13MM — its highest contribution total in recent times was $17MM in 2014. Across the public ACC in general, around 28% of total revenue in 2021 came from donor contributions. For Tech, it’s around 9%. We’ve mentioned this before, but these numbers make it abundantly clear: Tech has to improve its fundraising efforts to compete more effectively in the college athletics market.
There’s another deficiency here as well: ticket sales. Let’s consult the above NCAA Finances report once again: the median P5 school in 2019 had a revenue of about $120MM with 19% coming from ticket sales — around $23MM. Compare that to Georgia Tech taking in just $11MM in ticket sales in 2019, less than half of the median P5 school. Again, not less than half of a top-flight school, less than half of the median school. Here’s the public ACC-specific rankings for 2019 ticket sales:
- Louisville: $31MM
- Clemson: $28.7MM
- UNC: $23.5MM
- NC State: $22.6MM
- VT: $20.5MM
- FSU: $20.4MM
- UVA: $11.5MM
Once again, Georgia Tech sits at the bottom. Of course, it’s possible that Tech is above some of the private schools that don’t report this data, but even if it’s miraculously above all of them (highly unlikely) — should we be happy with at-best 8th place out of 14? This is again an issue of perception vs reality; Tech is one of the most recognizable brands in the ACC on a national scale, yet it pulls in some of the lowest revenues in the conference.
Between just ticket sales and donations, Tech is missing out on an additional $25MM+ in revenue that its athletic peers are enjoying. That is a lot of money. Imagine what could be done with that: Tech could pay off debt, invest in facilities, pay off newly-created coach buyouts, hire higher-profile staff, hire more staff — the wish list is long. Attempting to compete with these numbers is like trying to run a race with ankle weights.
Football as a Priority
Even when accounting for the disparity in revenue and total expenditure, Tech’s prioritization of football, king of college athletics, is still lagging behind its competitors’. Remember, Tech spent about $19MM on football in 2021 - that’s about 23% of its total athletic expenditure. Let’s compare that football share for the same list of public ACC schools from before:
- Clemson: 40.8%
- VT: 31.2%
- FSU: 30.1%
- UNC: 29.6%
- NC State: 27.7%
- UVA: 23.5%
- Louisville: 21.0%
Not the absolute bottom but...pretty close. Not only is Tech spending less overall than its competitors, it’s treating football with less priority than they are as well. It bears repeating: any expectation of Tech being competitive on-field with the schools around it needs to be properly tempered by its willingness to spend the money to do so. We’re not calling for Tech to all of a sudden start throwing cash at football (especially at the expense of other programs), but it’s important that we emphasize that there is often a disparity between how people perceive a program and what’s actually happening behind the scenes.
It’s a harsh reality, but the days in which NCAA Division I programs operated under the auspices of a level playing field are through — it’s not quite pay-to-win but the reality isn’t far off. Over the last decade, athletic and football spending at Georgia Tech has just simply not been a priority or area of strong investment. Fifteen years ago, Tech was right in the mix — its revenue was close to the median, and a healthy 29% of its athletic spending was going towards football. However, fast forward to 2022, and the Edge has fallen far behind. A speeding financial train has been flying by Tech for years, and it either missed the memo to get onboard or willfully decided not to.
“Easy! Just start spending more!” you might say. Well, the problem is that the combination of missing that train so long ago and the debt issues described above has left the Edge in a financial catch-22 with a lot of ground to cover. Tech can’t afford to increase its spending without increasing its revenue, but it’s incredibly difficult to secure that revenue when Tech doesn’t appear to invest in the product that generates it. “Gotta spend money to make money” is the classic adage, but that just doesn’t work for Tech’s reality.
Most numbers in this section taken from the excellent Knight-Newhouse College Athletics Database.
(ed. note: This section was written before the hire of new athletic director J Batt, whose background includes overseeing exponential gains in fundraising at ECU and Alabama. Clearly, Georgia Tech has acknowledged this problem and is poised to make moves to improve upon it.)
* * *
We’re fully aware that the things we’ve discussed here can put a rather heavy damper on the outlook of the program. However, it is our collective opinion that the debt and underlying funding problems facing the Athletic Association will be the singular item that will determine the viability of Georgia Tech athletics in the future. For that reason, this topic will be far and away our largest focus moving forward with future stages of this series (more on this soon).
The chasm is massive. Absolutely massive. But we’re damned if we don’t try to make it across.
Concluding this Series
We come to cherish Georgia Tech, not to bury it. This criticism comes from a place of love — a genuine hope for bringing out what Tech once was as an athletics program and what it could be in the future if its administration gets some things right. If using our admittedly-undeserved platform to write an entire thesis on the state of Georgia Tech athletics helps spark even one idea at the Edge on how to remedy the issues that have been 60-plus years in the making, then we’re going to do it. There’s no other option.
So let’s be clear: Georgia Tech football has an image problem, but it’s vastly more layered than just “they ran the option and are smart and they can’t recruit”. Any solution must go deeper than simply saying “oh they’re in Atlanta, they should just walk to the nearest high school and hoover up the local talent”.
In that vein, it’s reductive to start or end the conversation about Georgia Tech on the recruiting trail, for better or for worse. That’s not how this school works. That’s not how it has ever worked. Georgia Tech is not going to suddenly rack a top-ten recruiting class filled to the brim with five-star linemen and a star prep quarterback — as discussed, the lack of academic diversity (compared to a Stanford or a Northwestern), among other factors, makes that a functional impossibility. But it’s also outright false to say that Georgia Tech can’t be a factor in the market, especially with the advent of the transfer portal and the one-time transfer rule. Tech is always going to be able to find (for lack of a better term) its guys: student-athletes who are willing and able to take on the course rigor at Tech and play good football.
So we might look to the field instead: maybe the option is the end-all, be-all. But running the option was never an actual problem, despite what some may say or imply. The option puts a hard ceiling on your achievements in the sport, but that doesn’t mean there aren’t achievements to be had. Did running a specific type of offense limit recruiting potential as recruits focus more and more on making a professional roster? Sure, but it’s not like changing the offense to something more modern has had a demonstrably positive effect.
In short, a focus on program issues is an incredibly reductive approach to a series of complex cultural problems that have been endemic to the Tech experience for the better part of 60 years. Since its inception, Georgia Tech has had a proud tradition of effectively blending academic excellence with athletic endeavor. For all of the finance, history, culture, and ideology we’ve discussed in this series, that part remains an indelible truth. You can not simply define a program by the last N years of on-field results, and you certainly can’t write it off from the future of a sport out of hand simply based on the box scores in your web browser. There’s an abundance of ways out of the mess that the last 20 years of athletic mismanagement have created (more on this soon to come).
In 1964, when then-President Edwin Harrison was asked about Georgia Tech’s departure from the SEC, he offered that “[t]here is not another school in America like Georgia Tech trying to play football.” That still rings true nearly 60 years later. There is not another school in America at a size, specialization, and rigor like Georgia Tech that’s trying to play Division 1 athletics, let alone FBS football. There is not another school in America like Georgia Tech with a similar confluence of academic, cultural, geographic, and ideological contexts.
Simply put, there is not another school in America like Georgia Tech.
Thanks for reading. Go Jackets.