Hello, and welcome to Fiscal Year 2007-08. Hope you didn’t overindulge Saturday night while celebrating Fiscal New Year’s Eve.

As you know, July 1 was the first day of the new year for many entities, including arguably Lawrence’s fastest-growing business – Kansas Athletics Inc.

KAI has experienced astonishing growth. The local company located on the Kansas University campus has more than tripled its annual budget in just a decade.

Back in FY 1997-98 when it was known as the Kansas University Athletic Corp., KAI’s budget was about $17 million. Now that figure is nearly $53 million, a breathtaking explosion fueled by its strategic positioning on the tail of the speeding college-sports-entertainment comet. It’s a phenomenon that shows no signs of disappearing into oblivion.

Over the last 10 years, contemporary college sports fans all over the country have displayed a dogged willingness to purchase high-priced events tickets and, particularly at KU, to pay a premium simply for the opportunity to do so.

Ever since Kansas Athletics Inc. opted three years ago to base seating rights for its men’s basketball games on the size of contributions, income has skyrocketed. A decade ago, for example, KAI was able to generate only a little more than $3 million in contributions into its tax-sheltered Williams Fund.

Today contributions are listed at $13 million – an eye-popping $10 million rise – making donations by far the largest single source of KAI income. In the business world, that’s not exactly a rags-to-riches story, but you wouldn’t be far off in using a swimsuit-to-tuxedo analogy.

No. 2 on the KAI income chart is, not surprisingly, men’s basketball at $9.4 million. Third is football at $6.91 million. Close behind at $6.8 million is the windfall KAI receives from its affiliation with the Big 12 Conference. Marketing rights round out the top five at a cool $6 million.

There’s a large drop-off to No. 6, the $1.64 million KAI receives from state coffers. Other revenue sources in the million-dollar range are licensing, apparel and student fees.

All in all, KAI relies on a broad base of funding, but future growth depends mostly on the supply and demand for football and men’s basketball tickets and a corresponding influence on donors.

While KAI is a shining star in the Lawrence economy, there’s a downside, too. As a non-profit company, KAI pays no taxes. Still, with a $20 million-plus payroll, KAI’s employees – many of them with six-figure salaries – clearly have a profound effect on the Lawrence economy because they pay property and sales taxes just like the rest of us.

Critical for growth, too, is maintaining a tight rein on almost $20 million in operating expenses, the second-largest drain on the KAI balance sheet. Travel and lodging prices aren’t dropping, and neither are the costs of scholarships, the third-largest expense at $6.44 million.

Strategic analysts also like KAI’s philosophy of delaying capital improvements until funding is obtained from outside sources.

For Kansas Athletics Inc., the future is bullish. Although it seems unlikely the company’s budget will triple again during the next decade, it would be folly to predict it won’t at least double.

Now if only KAI could sell stock. Its IPO would rival the introduction of the iPhone.