Reports by local media outlets and recent responses to plans of purchasing new video boards at Commonwealth Stadium paint a picture of an athletics department that not only swims in cash but borrows from a cash-strapped university. It appears to be a case of the rich not only neglecting the poor, but taking from them as well.
A bottom-line look at the department's financial records over the tenure of Athletic Director Mitch Barnhart, however, reveals a much different picture.
Although the department is currently pursuing or undergoing upgrades to some of its athletic facilities, namely a new track facility and new video boards at Commonwealth Stadium, UK Athletics records show the department has given back millions to the university while remaining one of only 14 self-supporting intercollegiate athletic departments in the country.
Since Barnhart's first fiscal year in 2002-03, the UK Athletics Department has given $19,383,420 in scholarships and royalties to the University of Kentucky. That number includes $1 million to the Robinson Scholarship program, $900,000 to the Otis A. Singletary Scholarship and $8 million for general scholarship funds, which resulted from ticket and K-Fund adjustments during Barnhart's tenure.
A recent article from the Lexington Herald-Leader reports that only 2 percent of Kentucky's $79.38 million budget for the 2010-11 fiscal year was donated to the university's scholarship fund. That number is presented unfavorably in comparison with other Southeastern Conference schools in the Herald-Leader report on March 20.
Those numbers neglect the $14,984,086 the athletics department has contributed or paid to the university in the 2010-11 fiscal year for scholarships, royalties and expenses. Since Barnhart arrived in 2002, the department has directed nearly $100 million to the university.
Nearly $9.5 million of the $100 million comes from royalties. According to Jason Schlafer, UK's director of trademark licensing, more than 90 percent of all UK-related merchandise is generated from athletic-related sales. Together, the university and athletics department has generated $18,966,840 since Barnhart arrived in 2002, but the athletics department and university split the royalties down the middle, 50-50. The athletics department remains responsible for all expenses related to managing the licensing program.
Those contributions from royalties have steadily climbed since 2002-03, starting at $691,332 in 2002-03 and climbing to a current $1,717,055 in 2010-11, which does not include the final quarterly payments.
That means, as Barnhart recently outlined, not only does the university not take money out of its central budget to support athletics, it actually receives a chunk from the athletics department. As the Herald-Leader article on March 20 accurately reports, the donation relationship between the UK Athletics Department and the University of Kentucky is not the only one of its kind in the SEC.
But the relationship is fairly unique. The UK Athletics Department's revenues and contributions over the last several years compared to UK's prime in-state competitor, the University of Louisville, reveals as much.
According to an NCAA database on USA Today's website, the University of Louisville's athletics department received $4,460,956 for indirect facilities and administrative support and another $2,152,967 of direct institutional support during the 2009-10 fiscal year. As a self-supporting entity, the UK Athletics Department did not receive a penny from indirect facilities and administrative support or direct institutional support.
U of L's athletic department has received at least 7.41 percent of its annual revenue from direct institutional support and indirect facilities and administrative support since 2004-05, according to the USA Today database. That percent was as high as 11.46 percent in the 2007-08 athletics year and was 10.42 percent during its $63,487,395 operating revenue in 2009-10.
Meanwhile, the UK Athletics Department has received zero percent during that time period.
The UK Athletics Department has remained self sufficient during a time of state and university budget woes and financial instability and has done so without significantly raising student fees. In a day and age when athletic departments rely heavily on student fees, UK's $38 annual student athletics fee makes up 0.95 percent of the UK Athletic Department's total revenue. U of L, by comparison, charges students an annual athletics fee of $100, and Eastern Kentucky University and Western Kentucky University charge $180 and $205, respectively.
While the athletics department's contributions to the university have increased every year during the Barnhart era, so have its expenses.
Every year the university is forced to raise tuition, the athletics department is adversely affected as well. A sizeable amount (11.02 percent in the 2010-11 fiscal year) of the department's annual budget is dedicated to paying its own athletic scholarships. As tuition increases each year, the UK Athletics Department must budget more to its own athletic scholarship fund.
In the 2002-03 fiscal year, athletic scholarships cost the department $5,259,777. That number increased to $8,745,001 in the current budgeted fiscal year of 2010-11, in addition to $1,104,630 for managers, student trainers and graduate assistants.
Expenses to the university also include service assessment fees, which consists of the university legal department, general accounting services and purchasing services, just like every department on campus at the University of Kentucky.
The UK Athletics Department has paid more than $11 million in service assessment fees to the university since the 2002-03 fiscal year and $1,757,400 was budgeted for the 2010-11 fiscal year. The service assessment fee does not include the department's separate expenses for utilities, maintenance and repairs.
The operating budget of the athletics department has increased from $42.39 million in 2002-03 to $78.78 in 2009-10 at the support of outgoing UK President Dr. Lee T. Todd, Jr.
Todd hired Barnhart in 2002 and has allowed the athletic department to increase its budget in an ongoing effort to grow and compete with the rest of the SEC. According to the figures in the USA Today database, the UK Athletics Department had the fourth-smallest operating budget in 2009-10 out of 11 SEC schools (Vanderbilt is a private institution, and therefore does not have to release its operating budget) and trailed Alabama by more than $50 million.
As the athletics department continues to try to close the gap with the rest of the conference, the hope from the athletics department is that the next university president will share the same vision for athletics as Todd.
Todd is set to retire from his post on June 30 after 10 years as university president.
UK media relations assistant Metz Camfield contributed to this report.