FanPost

Wish I Could Figure Out Dan's Financials- Howland Teleconference Comment Is Interesting

One of Dan's supposed attributes is financial management. One comment in yesterday's teleconference struck me as very interesting.

From a Jacob Ruffman tweet, "Guerrero said that UCLA has an $80 million budget and the buyout will come from that fund."

I searched for UCLA Athletic Department financials, and was led to the 2010-11 athletic department annual report (apparently the most recently available). This showed a miracle of modern accounting- Revenues of $66,003,893 and Expenses of $66,003,893. From my years in the corporate world, the odds of having exactly matching revenues and expenses are astronomically higher than the odds that Dan could make a sound hiring decision, and Dan's odds are astronomically high to begin with.

Revenues include "Other" of $7,112,153 and Expenses include "Other" of $4,827,298. There is clearly some major forcing going on here to get the revenues and expenses to equal to the dollar. The balancing amount could be a transfer from the Athletic Department to the University (if the Athletic Department is running a surplus) or a transfer from the University to the Athletic Department (if the Athletic Department is running a deficit). Or it could just be some random entry to bring revenues and expenses in balance. In any event, not a usual result, to say the least.

Revenues include "Endowment and Investment Income" of $1,459,825. This would suggest that there is a fund which has built up over time (contributions in excess of outflows), and that fund earns an investment return.

This presumably is the source for "that fund" referenced in Doughnut's teleconference which was used for the buyout. Either that, or Guerrero was able to tap the 3 wealthy alums, who paid in special to remove Howland from the scene. It is a little confusing, because a budget would not be a fund which could be used for payments. But that is not the first or last time that Doughnut will be confused or confusing.

Sorry to stray so deep into accounting land. The point of all this is as follows- from the quote, it sounds like Dan considers this business as usual- we have $80 million, and we just spent $3 million to buy out our failed coach. But this is not business as usual. That $3 million could have been spent on scholarships, on facilities, on coaches' salaries, or on other worthy items. If it was drawn down from an endowment fund, which already must be sucking wind in today's zero interest rate environment, that means that much less for future scholarships, salaries, etc.

The decision to hire Howland was very reasonable, and played well for the first 5 seasons. But there was a required buyout at the end of the day. The decision to hire Dorrell was never reasonable. The decision to hire Neuheisel was reasonable to a degree, but there were some issues. The process to hire Mora was very flawed, and the jury is still out whether Doughnut lucked out and made a successful hire.

If we keep making buyout payments for Dan's failures, that means less money for scholarships, for facilities, for coaches' salaries. We can presumably keep balancing the athletic department budget through magic transfers and balancing entries. But wouldn't we be better served if we had an Athletic Director who was competent, so that we could spend our money on more productive items than failed coach buyouts?

<em>This is a FanPost and does not necessarily reflect the views of BruinsNation's (BN) editors. It does reflect the views of this particular fan though, which is as important as the views of BN's editors.</em>

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