ADOB: An imperfect 10
Former athletic director Jay Jacobs left Auburn 18 months ago providing assurances that all was well with the school's athletic department.
"We've been very fortunate, particularly the last three years, we've put record numbers in surplus," Jacobs said in a piece posted to the university's website. "We have to continue to do that because the cost of college athletics continues to inflate."
That inflation is now swallowing that surplus. And now it's time for a reckoning.
Current athletic director Allen Greene, hired in January 2018, recently took the unusual step of cutting all program budgets by 10 percent. This is believed to be the first time Auburn has taken such a drastic step as a department — and it's sure to elicit concern throughout the Auburn sphere.
How can a program like Auburn's, which generates revenues of nearly $150 million, suddenly find itself in need of belt-tightening?
The answer is tricky.
"We are reallocating our budgets and making priority investments to build on our future," Greene said in a statement to AuburnSports.com. "By becoming more efficient, it will allow for us to commit to the things that are most impactful to our department: the student-athlete experience, elite-level coaching staffs and current and future facility upgrades."
Let's start here: Revenues are flat across the league these days. The Southeastern Conference enjoyed an unrivaled surge in earnings while the SEC Network, launched in August 2014, grew like a weed. Carriage rates were (and are) sky high, but SEC fans have an insatiable appetite when it comes to coverage of their favorite teams.
The network now is close to reaching maximum market penetration, which has affected athletic departments insofar as revenues are leveling off. The era of spectacular growth is nearing its end.
Auburn didn't prioritize capital spending during the halcyon days. Jacobs serially flirted with the idea of revamping the north end zone of Jordan-Hare Stadium, but never settled on an actionable plan. He spoke of the need for a new, football-only facility, but never settled on an actionable plan. So he committed instead to a stop-gap solution — a $28-million renovation to the locker room and recruiting areas. It was completed last summer and has become the football program's exclusive spot to host recruits.
Still, football needs more. The Board of Trustees recently asked to fast-track the football-only building, but the athletic department has struggled to make any firm commitments.
It simply doesn't have enough money to fund a $70-million project — even one that deserves to be fast-tracked.
WINNING PAYS (AND INFLATES) THE BILLS
Auburn has been quite successful on the field during the past six months. Men's basketball made the Final Four, baseball made the College World Series, equestrian won a national title, women's golf advanced to match play at nationals, men's golf qualified for nationals, gymnastics qualified for its first-ever Sweet Sixteen.
Winning is the goal. It's a good thing by almost any measure.
Winning also can be costly. The NCAA reimbursed Auburn for travel to the Final Four, but that trip still went over budget by $500,000. The trip to Omaha was costly. All travel is costly.
Those coaches are making more money as well. Greene recently rewarded Bruce Pearl with a richer contract. Baseball coach Butch Thompson received a raise and an extension last summer. Auburn doesn't cut corners when it comes to paying its coaches; almost all are above the league average.
The costs, which includes winning costs, are mounting.
That's where Greene began sensing the need to reshuffle the department's financial priorities — retaining successful coaches, upgrading facilities and giving athletes what they need to thrive both as competitors and students.
He doesn't see his 10-percent edict as a budget cut per se. This is more of a philosophical pivot, one that asks coaches to think more deeply about where their money goes. Do they need to be lodged at a high-rise hotel downtown or will a three-night stay at a suburban Courtyard have the same effect on the team's ability to win games?
Do they need to eat at Ruth's Chris Steakhouse or would Outback be good enough?
Do they need the university jet to fly to Knoxville or will a six-hour bus ride suffice?
These are the kinds of questions Greene wants his coaches to ponder moving forward. If they need to spend a little extra to impress an important group of recruits during an official visit, well, the money is there. That extra expenditure may need to be offset by a more spendthrift decision down the road. That's the new paradigm.
Greene believes this scale-back will free up money to help fund projects like the football-only facility, like the Plainsman Park upgrades that recently were put on hold, like a centralized sports-medicine hub. They all demand attention.
Still, Greene is quick to quell speculation that Auburn's finances are flagging. He says this effort really is about re-allocation.
"We are very fortunate that Auburn Athletics is on solid footing," he said Thursday. "As we position ourselves for the future, being more intentional about how we leverage our resources will be critical."
THE MALZAHN FACTOR
Some observers will wonder if this new paradigm is rooted in Gus Malzahn's troubles. After all, fundraising for the football-only facility has been stymied by skepticism — potential donors withholding money either out of frustration with Malzahn or a belief that their donation will be used to fund a Malzahn buyout should one be triggered rather than the new building.
For his part, Greene says this has nothing to do with football in any direct sense.
With that said, Malzahn's predicament nonetheless matters. If the Tigers fail in 2019 and the school chooses to fire Malzahn, it will owe him approximately $25 million. Half of that will be due within 30 days of termination.
If Greene's budgets are shaken by travel overruns, surplus tickets from the Chick-fil-A Kickoff Game last year and Jay Jacobs' $2.5-million buyout, Malzahn's severance package would be a cataclysmic development.
That's all speculation, of course. The Tigers could run the table this season, which would alleviate some problems. At a minimum, donors would be less fraught with concern over Malzahn's spotty record since the 2017 Iron Bowl. Revenues surely would trend upward.
Greene would love to see that happen. All of it.
Still, he must prepare for everything.
That's his predicament. Always the same predicament.