Our Ken Hardin forwarded this story/info-graphic from ESPN.
In “Tipping the Scales,” ESPN the Magazine reporter Igor Guryashkin found that U of L generates in net income, or “profits,” more than other programs generate in top-line revenue.
If you’re taxpayer in Jefferson County, you need to keep one thing in mind while you’re looking at the stunning numbers the University of Louisville basketball program puts up on the P&L sheet … you’re subsidizing the program out of your pocket with at least $9.8 million annually, or almost $20 million during the last two years.
At the same time, U of L basketball was making a profit of $1.35 million per game, according to ESPN’s reckoning, a whopping 35 percent more than the University of North Carolina, the next most profitable program.
You can see the complete info-graphic here, and it’s super-well done.
From the post:
With the nation’s third-highest average attendance, 71 luxury suites bringing in $14.6 million in revenue alone, and a fan base that gifted an eye-watering $20 million in donations, Louisville has the financial clout to make even some NBA executives envious.
Okay, let’s see how they’re doing:
Fact: U of L basketball is now is the richest basketball program in the United States, wealthier than Duke University, the University of Kentucky, UNC or any of the powerhouse programs.
Fact: U of L’s take from the 2012/2013 season came to $25.8 million, with the big money starting to flow after the Cards moved out of old, uninviting Freedom Hall into one of the best arenas in the nation, KFC Yum! Center.
Fact: KFC Yum! Center, owned by the Louisville Arena Authority, doesn’t even come close to paying for itself essentially because U of L takes 90 percent of revenue from each game under their lease as arena tenants.
How KFC Yum! Center finances worked for the 2012/2013 fiscal year ending June 30:
There are three main revenue streams: money from the TIF district, money from arena operations and a guarantee Louisville Metro Government will pay up to $9.8 million to cover any shortfall.
The total debt service of $22 million on the bonds due in 2012:
• TIF revenue $ 3.5 million (projected to be $8.2 million at the time of the bond issue in 2008)
• Naming rights and sponsorship revenues 4.5 million
• Suites/premium seating 1.4 million
• The city 3.3 million (above its minimal legal obligation of $6.5 million)
• Interest income .7 million
• Event revenue 0 (net of event expenses through June 30, 2012. Projected to be $7 million)
Next year, event projections remain at $7 million while the TIF projection rises to $10 million, then to $12 million in 2015.
Two points come to mind comparing the two sides of the ledger: First, as long as they stay a national contender, U of L could give very little and make all the drama of covering the arena bond obligation each year go away. Second, U of L can afford to own KFC Yum! Center outright and dispense with the whole Louisville Arena Authority farce.
Will either happen?
Tom Jurich and James Ramsey know the essential reality of sports: No program stays flush forever. Rick Pitino leaves, Jurich gets hit by a TARC bus (G-d forbid) or the recruiting channels dry up, and over night, U of L becomes Grambling.
Not a comforting thought at U of L or at city hall.