Figures gleaned from Internal Revenue Service documents indicate Kansas Athletics Inc. is out on a pretty long limb when it comes to its financial liabilities and debt.
In IRS documents filed to maintain its tax-exempt status, the KU athletics department reported financial liabilities for 2008-09 of $93.67 million, an increase of about 57 percent from a year earlier. The report also showed long-term debt of about $46.56 million for 2008-09. That figure is more than triple the $15.06 million debt listed the previous year.
The jump in liabilities comes from debt incurred in connection with more than $32 million worth of major construction projects at Allen Fieldhouse, the Horejsi Family Athletic Center and the Wagnon Student Athlete Center/Parrott Athletic Center.
How does Kansas Athletics plan to pay off its huge debt? Basically through the generosity of its friends.
The department gets ticket revenue from KU sports events, but the bulk of the construction debt is slated to be retired by contributions from what Associate Athletics Director Jim Marchiony called the department’s “very loyal and generous donors.”
That has proven to be a relatively reliable funding stream for Kansas Athletics in the past, but it’s not exactly money in the bank, especially given the current fickle stock market. There also are indications that even if the nation’s economy takes a turn for the better, donor dollars may be harder to come by in the future. Athletics officials had planned to use donor pledges to build a new Gridiron Club atop the east side of Memorial Stadium, but those plans — along with the $40 million that was to be given to academic and research programs — had to be put on hold when that particular revenue stream failed to materialize.
It’s hard to imagine that the size of the athletic department’s debt won’t be an issue as KU begins its search for a new athletics director. Recently departed AD Lew Perkins was known as a strong fundraiser, but he also committed the university to a huge debt that his successor will be responsible for paying off — whether or not KU’s “very loyal and generous donors” are able to fulfill their funding pledges. It’s an issue that should be of no small concern to anyone considering an application for the KU job.