Delicious Irony: Tennessee is almost "out of business."

twofbyc

Hall of Fame
Oct 14, 2009
12,193
3,328
187
Although "hate" is a strong word, for me it's the only word I can use to describe my feelings towards the orange puke (football program) in general (and some of their past players and coaches in particular); Tennessee is a very strong academic institution, but I would lose no sleep if their football program folded it's tent and threw away all the fake teeth they have started passing out to fans at football games (at least the ones on TV). That, to me, is the essence of karma.
 

jabcmb

All-American
Feb 1, 2006
2,792
318
107
Birmingham, AL
I don't know anything about their financials or if they have timing issues, but I guess they could convert some of their current liabilities to long term debt if they had to.
 

TIDE-HSV

Senior Administrator
Staff member
Oct 13, 1999
84,530
39,620
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Huntsville, AL,USA
I don't know anything about their financials or if they have timing issues, but I guess they could convert some of their current liabilities to long term debt if they had to.
I'm not sure how they would do that. Both our EZ renovations stand good for the bond issues funding each. Long term debt is always collateralized, even if only theoretically. (The folks buying our bonds understand they wouldn't be able to foreclose on an end zone.) Also, it's usually done with a separate bond-issuing authority set up for each project. I suppose they could mortgage their whole stadium, but I doubt that they have the authority to do that...
 

bamaslaw

All-SEC
Jan 16, 2005
1,899
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Atlanta, GA
Written by people ignorant of accounting. Our debt is long-term bond issues to cover the last two expansions, which, given recent history, we'll pay off early. We could have paid cash, but bonds made more sense because, given current interest rates, it's almost free money. The new weight facility, IIRC, was covered by advance pledges. UT's problem is what's called the "quick ratio," in accounting terms and they have to turn things around soon or the state will have to start subsidizing the football program (the way we do UAB), instead of the football program helping fund the university, as in Bama's case...
There's also a HUGE difference of having debt of 200 million when you have 80+ million in cash reserves vs. 2 million. That article is silly.
 

Go Bama

Hall of Fame
Dec 6, 2009
13,785
14,080
187
16outa17essee
I hate to see any state school get into financial difficulty because of the football program. I have one of those degrees from UT that I couldn't get anywhere else. I hate the Vols, not the University of Tennessee.
 

JDCrimson

Hall of Fame
Feb 12, 2006
5,346
4,417
187
51
Their main problem is they dont generate the same revenue that we do in their seating rights - Tide Pride. Seems like a few years ago they wanted to institute a similar program to what we have which was going to cause a lot fans who hold the premium seats fork a lot of money each year. A UT friend of mine said that a lot of the seating was a legacy thing - seats passed from generation to generation and those folks who were contributors to some degree on the academic side pretty much told the AD they could shove it. UT had to back off that plan...

He told just as they did with the seat numbers that they pushed as much of the burden onto the blue-collar fans that occupy the less desirable seats (because they could be pushed around). So now what they are left with is a substantial group of entitled fans holding the most valuable seats, the "joe" fans paying higher than average rights to season tickets and when those "joe" fans have a household income issue come up (as many have in the last 5 yrs) the first thing to go is the luxury items. Hence, all the empty seats. Their problem is compounded by losing - but given the way they have it setup, as I remember, they would still have a problem if they were winning at a high level.

If you really read what was published, UT cant sustain their program unless they are going to a BCS game every year. You cant survive on that sort of business model...
 

Sagamore Bill

1st Team
Sep 1, 2010
342
0
0
Oklahoma
I realize that it will be a small portion of the overall debt, but, how much do you think they have paid out in legal fees the keep Phatso from testifying. To my knowledge he has never had to speak, even after the subpoena. If I am wrong, I apologize.
 

jabcmb

All-American
Feb 1, 2006
2,792
318
107
Birmingham, AL
I'm not sure how they would do that. Both our EZ renovations stand good for the bond issues funding each. Long term debt is always collateralized...
Down here in Jefferson County, we collateralize air! Then we tell our bondholders if they ever get anything, their return is infinity! TN could try that.
Seriously, their assets (not liabilities) are out of kilter because they're not winning. Nothing that a few winning seasons wouldn't fix. Not that I would ever want that to happen.
 

IH8Orange

Hall of Fame
Aug 14, 2000
7,017
31
0
Trussville, AL, USA
Our debt is long-term bond issues to cover the last two expansions, which, given recent history, we'll pay off early. We could have paid cash, but bonds made more sense because, given current interest rates, it's almost free money.
From the perspective of a bond holder, if inflation outpaces the interest rate, it could end up feeling like a donation.
 

TIDE-HSV

Senior Administrator
Staff member
Oct 13, 1999
84,530
39,620
437
Huntsville, AL,USA
From the perspective of a bond holder, if inflation outpaces the interest rate, it could end up feeling like a donation.
One fairly large institution I represent found itself in just that position after financing a building for a state agency through an exempt bond authority set up for the purpose. Fortunately, there was sufficient cash on hand to pay off the bond issue, which took several millions to do...
 

JeffAtlanta

All-American
Aug 21, 2007
2,131
0
0
Atlanta, GA (Buckhead)
Agree that the article about debt was very ignorant of accounting and finance. It's like the author doesn't understand the difference between personal credit card debt and business debt used to fund long term infrastructure and capital improvements.

Apple, Google & Microscoft all have debt in the billions even though they are all sitting on huge cash reserves that could cover Greece's debt restructuring.

A writer covering such topics should have a more thorough understanding of finance than just listening to a few Dave Ramsey radio shows.
 
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