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USC/Clemson Financial Situation

  • I had someone say this earlier. I would be interested in seeing someone's opinion who has more insight on this.

    USC is deep in debt with bond offerings that are not selling (even at 5% on this market). The money has already started coming due and is eating a large portion of their TV deal. As inflation rises, their ability to refinance their debt will dry up. Inflation will also drive up the price of upgrades. So existing funds will have to be stretched further. This will lead to them having to significantly reduce their upgrades and expenditures. Baseball has helped them build some brand (and revenue around that brand), but they are perched on a pretty narrow precipice. If they don't win now, they will have a hard time continuing to get the recruits because their facilities will start falling behind.

    Clemson, on the other hand, has relatively little debt and a substantial amount of cash on hand (though some of that just got eaten up in buy outs and hires. Nonetheless, they are still cash-flow positive. What debt they have is short term and backed up by commitments for donations. So, if they run into problems, they can still use the bond issuance to raise funds without worrying about carrying an existing debt load. This should help Clemson become more consistent and incrementally improve as things come up (see the video boards)

    chucktcock ●

  • Where is this info coming from?

    signature image

    joethegamecock ●

  • Yeah would like to see some sources. Not saying what you say is not true but I have a hard time believing that Clemson is in a much better financial position than we are.

    Metcock

  • There was an article recently where Hyman said we had 128 million in debt, and he viewed the upper limit for what we could handle as 130 million. I have no idea about Clemson's situation.

    This post was edited by PalmettoLaw on 2/4/2012 at 9:03 AM

    PalmettoLaw ●

  • You are incorrect. Our bond auction went off fine but Clemson's is have a little more difficulty. They just had a cancel or delay an expansion to the west zone. We do have a lot of debt but we are able to service it fine right now bc of the low rates. We are not having to roll much if any debt because we are able to save to payoff the principal when it comes due. Feel free to read moody's or s and P's report if you would like. We are fine.

    signature image signature image

    I lost a sig bet. that is why I have these sigs until November 7, 2013.

    pcgamecock2001 ●

  • Also, any money in the athletic department at Clemson is taken by the school. look at the IPTAY tax returns and every dime goes to the schools general fund. They do not leave the money in IPTAY like we do with the Gamecock Club.

    signature image signature image

    I lost a sig bet. that is why I have these sigs until November 7, 2013.

    pcgamecock2001 ●

  • He is right that USC has pledged it's revenue streams as security for the bonds it has issued.

    It doesn't eat up the large portion of annual revenue however...looks like Moody's suggests debt service is about 20% of net revenues if I read it right.

    Hyman has said we have about reached the ceiling of what he is comfortable with in terms of debt, but he is fairly conservative in that regard. He has said future projects will mainly be funded with cash and donations.

    Is Clemson in a position where they might be more able to finance facilities through debt offerings? Probably so to the extent their revenue supports it and their policies allow it.

    This post has been edited 2 times, most recently by VBCock on 2/4/2012 at 11:56 AM

    VBCock

  • we are also going to see a sizeable increase in revenue when the new tv contract is in place.

    GCIT

  • http://businessofcollegesports.com/2011/06/20/which-football-and-basketball-programs-produce-the-largest-profits/

    We're #11 in football and #72 in basketball.
    Clemson is #28 football and #95 in basketball

    We made $40 mil in profit last year in football and basketball last year compared to $17 mil for Clemson. I imagine baseball is close to if not profitable.

    This post was edited by Bookmaker03 on 2/4/2012 at 10:47 AM

    Bookmaker03

  • This post is for members of TheBigSpur or All Access VIP members only. Start Free Trial

    Kyle4usc ●

  • chucktcock said...

    I had someone say this earlier. I would be interested in seeing someone's opinion who has more insight on this.

    USC is deep in debt with bond offerings that are not selling (even at 5% on this market). The money has already started coming due and is eating a large portion of their TV deal. As inflation rises, their ability to refinance their debt will dry up. Inflation will also drive up the price of upgrades. So existing funds will have to be stretched further. This will lead to them having to significantly reduce their upgrades and expenditures. Baseball has helped them build some brand (and revenue around that brand), but they are perched on a pretty narrow precipice. If they don't win now, they will have a hard time continuing to get the recruits because their facilities will start falling behind.

    Clemson, on the other hand, has relatively little debt and a substantial amount of cash on hand (though some of that just got eaten up in buy outs and hires. Nonetheless, they are still cash-flow positive. What debt they have is short term and backed up by commitments for donations. So, if they run into problems, they can still use the bond issuance to raise funds without worrying about carrying an existing debt load. This should help Clemson become more consistent and incrementally improve as things come up (see the video boards)

    Tell "Someone" that the Gamecock Club and our Athletic department brings in about $24 million more in revenue a year than Clemson and IPTAY does. Send them this link.

    USA TODAY database: What NCAA schools spend on athletics - USATODAY.com

    A USA TODAY database on NCAA athletic department finances.

    www.usatoday.com

    GamecockIII

  • GamecockIII said...

    Tell "Someone" that the Gamecock Club and our Athletic department brings in about $24 million more in revenue a year than Clemson and IPTAY does. Send them this link.

    Clemson spends 19% of their revenues on coaches salaries, we spend 10%. And that was before the Morris and Venebles increases according to the link above.

    This post was edited by Bookmaker03 on 2/4/2012 at 12:26 PM

    Bookmaker03

  • Wow! I should have preferenced the original post by saying that is not my opinion, therefore I am not right or wrong. I simply quoted something directly from a taterhead. I was looking for a well informed opinion from someone on the Gamecock side

    chucktcock ●

  • Wow! I should have preferenced the original post by saying that is not my opinion, therefore I am not right or wrong. I simply quoted something directly from a taterhead. I was looking for a well informed opinion from someone on the Gamecock side

    chucktcock ●

  • joethegamecock said...

    Where is this info coming from?

    A Tater

    chucktcock ●

  • pcgamecock2001 said...

    You are incorrect. Our bond auction went off fine but Clemson's is have a little more difficulty. They just had a cancel or delay an expansion to the west zone. We do have a lot of debt but we are able to service it fine right now bc of the low rates. We are not having to roll much if any debt because we are able to save to payoff the principal when it comes due. Feel free to read moody's or s and P's report if you would like. We are fine.

    Did you not read my first sentence? I clearly stated that I was told this by someone. I should have stated it was a Clemson fan so you would know there was some bias

    chucktcock ●

  • This post is for members of TheBigSpur or All Access VIP members only. Start Free Trial

    chucktcock ●

  • Bookmaker03 said...

    Clemson spends 19% of their revenues on coaches salaries, we spend 10%. And that was before the Morris and Venebles increases according to the link above.

    Actually we both spent about $11 milion. If you read the line item "Coaching other compensation and benefits paid by a third party" ours is about $3 million and theirs is $0. Looks like they lump it all in together.

    This post has been edited 2 times, most recently by GamecockIII on 2/4/2012 at 12:50 PM

    GamecockIII

  • This post is for members of TheBigSpur or All Access VIP members only. Start Free Trial

    Michael1

  • chucktcock said...

    Did you not read my first sentence? I clearly stated that I was told this by someone. I should have stated it was a Clemson fan so you would know there was some bias

    Ya think?

    signature image

    CL4170

  • We are in much better hands with Hyman than Clemson is with Phillips. I think we're much better off with our alumni base than Clemson's, too. Which school do you think is spending your donations more wisely?

    crt712 ●

  • chucktcock said...

    A Tater

    They have a few fans on the Main Rivals Board that are spewing this story from time to time. Someone has them convinced that we are screwed as far as debt goes.

    signature image

    joethegamecock ●

  • pcgamecock2001 said...

    Also, any money in the athletic department at Clemson is taken by the school. look at the IPTAY tax returns and every dime goes to the schools general fund. They do not leave the money in IPTAY like we do with the Gamecock Club.

    Not true. A year ago when Clemson unveiled its next wave of upgrades, west zone phase 3, indoor practice facility, training table, etc...it was stated that the jobs would comment with 50% pledged donations bevause IPTAY has 38 million dollars in reserves. That was last year, so, I suspect that number is about the same, not bigger from 2011 donations.

    ceece ●

  • ceece said...

    Not true. A year ago when Clemson unveiled its next wave of upgrades, west zone phase 3, indoor practice facility, training table, etc...it was stated that the jobs would comment with 50% pledged donations bevause IPTAY has 38 million dollars in reserves. That was last year, so, I suspect that number is about the same, not bigger from 2011 donations.

    Either way bottom line is, USC is in better financial shape than Clemmy. Our revenues are almost double clemson. And it will continue to grow.

    signature image

    spoolunker ●

  • Bookmaker03 said...

    http://businessofcollegesports.com/2011/06/20/which-football-and-basketball-programs-produce-the-largest-profits/

    We're #11 in football and #72 in basketball. Clemson is #28 football and #95 in basketball

    We made $40 mil in profit last year in football and basketball last year compared to $17 mil for Clemson. I imagine baseball is close to if not profitable.

    yup.

    signature image

    spoolunker ●

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