WHY ATHLETIC DEPARTMENTS WONT FAIL AND SHOULDNT CUT SPORTS IF FOOTBALL SEASON CANCELED.
Georgia Tech Athletic Department Financial Statement Analysis
Reference: http://www.fin-services.gatech.edu/sites/default/files/images/gtaa_final_financial_statements_2018_.pdf

After combining through financial statements from the past 3 years of the Georgia Tech Athletic Department I have come to the conclusion that athletic department's similar to Georgia Tech are solvent and able to continue operations if the College Football season is canceled.

As seen in the balance sheet in 2018 the athletic department has current assets of ~$17 Million as well as non-operating revenues of approximately $700,000. These two forms of cash can be used to cover operating expenses such as salaries and scholarships for 2020-2021.

Salaries and Scholarships create a liability of around $40 Million per year, this is more than current assets and non-operating revenues. But the athletic department has good borrowing capacity to cover these liabilities (possibly a short term loan). This is very feasible.

The biggest and most surprising data point on the financial statements is the $100+ Million in investments (endowments and other investments) that the athletic department has available in non-current assets. This could very easily be used as collateral for short term loans.

Once College Football has re-started, the athletic department will easily be able to pay back the short term loan and can liquidate certain assets in the investments to ensure the they can continue to pay liability interest and continue all sports.

Just based on this quick interpretation I believe it is nonsensical for AD's to jump the gun and begin cutting sports in fear of not having College Football. Use the assets you have stored up for this very moment. It is important to not cut off your arm to save your back pack.

Feel to run the numbers yourself and get back to me with what you believe. I would love to discuss. I would love for AD's to really dig hard into their financials to find a solution to this problem and not just begin to cut because it's easy.

Even if this road is difficult, AD's owe it to the Student-Athletes to find the right solution.

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