Babers and Campbell
- Thread starter PaBoiler78
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"Babers & Campbell" sounds like a law firm. Or one of those big, fancy high-dollar advertising agencies that Purdue Athletics should have hired twenty-some years ago.
Nice picture!! Without seeing the face I cannot tell if it is Mitch or Morgan???
true, but just wanted to mention these 2 since they could have been viable candidates for our team if we had an administration that cared.
I know just trying to drum up some football talk and point out to some people that wouldn't want another MAC coach.
Do you truly believe that the biggest driver in the lack of a coaching change was that the administration just didn't care enough to make a change? In chat many weeks back, Brian went so far as to say he was told Purdue didn't have - or wouldn't make - the funds available for a buyout. Now, I understand that Purdue proper has mountains of money, but available/disposable funds is a different story. The buyout is a pretty significant number that Purdue would be committing to (even if not paying all at once, it's still a financial obligation if you pull the trigger). And relatively speaking, it's an even bigger number given the current state of the athletics department and its performance over the past couple years. But bottom line, I really don't think Brian would have made up what he said... it's an affordability issue.
Morgue said the buyout had "ZERO" to do with the decision to keep Haze around. Are you implying that was a lie?
With $32M a year flowing in from the conference and this same administration allocating $60M to a new practice facility, perhaps we should not take at face value that a $6M buyout is simply unaffordable despite what some talking heads may be telling Brian..
"The new complex will be financed using donations and revenue from the Big Ten Network partnership and other media contracts."
http://www.jconline.com/story/sport.../purdue-upgrade-football-facilities/74320512/
Not that I have a cool mil lying around to donate, but I would love to receive the call asking for my contribution to the $60M practice facility pot while the $6M buyout head coach continues to drive the program into the ground.
As an accountant by training, I should point out that Board members and leaders of Finance departments at large non-profits view expenditures of capital differently than expenditures that get recorded as expense. The facility renovation is a long-term asset that's capitalized, whereas the triggering of a buyout is undoubtedly getting expensed in the year the contract is terminated. So yes, while the cash for a $6M piece of equipment is same cash as a $6M buyout*, financial reporting is not. For an athletic department that lost $3M in 2014 (and may have been on track for similar results in 2015), an additional $6M expense to arrive at a nearly an 8-figure operating deficit is not something to dismiss. Just saying.
* Yes, I realize not all of $6M is due upon contract termination, but I've stated this as I have above for illustrative purposes.
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I'm not implying anything... I'm sharing what Brian said in chat. This was probably 2 months ago, so I don't remember the exacting wording, but it was something to the effect of "I've been told that Purdue does not have the resources for the buyout". Again, Purdue the university does, but I took his statement to mean the athletic department specifically, and the funds at its disposal.
I've tried to make this point multiple times on here. These are two totally different buckets of money and have nothing to do with each other from an accounting perspective. Building facilities and cutting severance checks are apples and oranges.
Which bucket does the lost revenue from a nearly empty stadium this fall come from?
If this is a genuine question, the answer is "operations", not "capital". When you don't have enough current year revenues to cover your current year expenses (note: this is not the same as expenditures), then you have a loss. It is this situation that leads to statements from Burke regarding dipping into reserves. He doesn't mean literally a different account called the "reserve" account, he means spending down of prior years' net income, or retained earnings (or "net assets" in the non-profit sector).
I'll admit that I am not a trained accountant, but if Daniels and Burke really wanted to work together and allocate $6M into the coaching buyout fund they could get it done. I think you are just getting into technicalities separating buckets. My reference to the $60M was simply to highlight the ability (or anticipated ability) to raise that amount of money for the football program, not to suggest a direct exchange of funds between buckets.
Either you have the funds or you don't. And based on the direct and emphatic quote from Burke they apparently think they do.
So if the FB program continues to "progress" at the current pace and attendance continues to "progress" similarly DH can never be bought out but will finish his contract and be released since operating revenue will continue to shrink. Correct?
Why would they cost the entire $6.6 million to the current year, instead of as it is paid out, which is $2.2 million a year over the next 3 years?
They will ask donors to pony up the cash, just like they did with Hope.
It doesn't. You are correct that it is due over the life of the contract. When you make that kind of deal you obviously want to have it work out but when it's not...you have to be prepared to pony up the cash to pay out a buyout. Maybe they will next year....but if we have similar results, it would be criminally negligent to let this guy continue to be our coach. Just because of the $$$ tag associated with him.
It's a messy situation for sure, but when you give those contracts you better have the ability to course correct and move forward. If we don't, it's going to cost the program a lot more than $2.2mil a year in the future.
Remember the name Dino babers... All the "wait and see, if you don't like shoop you're just a Bears fan" lunch boxes are going to eventually act like we never had a shot at him.
I'm saying the same thing. Babers attitude tells me that Syracuse will at least be making bowl games year in and in out very soon.
Not sure I can explain this all that well, but here goes... When DH is employed by the school, they pay his salary and more/less charge it against expense in the year it's paid. It's a basic accounting concept known as matching expenses over the period for which it relates. Pretty simple. However, once the contract is terminated, this changes things. At that point, Purdue is no longer paying him a salary in the ordinary business sense, they are paying him a severance (yes, the amount might remain unchanged, but the amount is not the issue here).
There are also accounting principles centered around conservatism, which in short means you err on the low end for revenues and high side for expenses. Not necessary with how you estimate said revenues and expenses, but rather how you asses when revenues have been "earned" and when expenses have been "incurred". Unlike the salary that is earned across multiple years, it's quite reasonable to expense the buyout at the time it is legally/financially incurred (i.e. the firing). Admittedly, there is probably some room for argument in how Purdue would treat this, but I think a lot of accountants would tell you the same thing I am.
Lastly, the contract also stipulates that the buyout is offset by any future wages DH earns through other employment. While true, that would not impact the amount of expense Purdue records today because this offset is not known, nor is guaranteed to occur in the first place. While an amount could surely be estimated (even conservatively estimated), and an argument could be made that nearly every coach gets a second chance... the whole notion of estimating this is in conflict with the conservatism principle for how one records expenses. In this sense, with respect to conservatism you could think of a reduction in expense similar to how you think of revenue (as it has the same impact on net income).
All the above is contrary to pboiler18's response to your question... he is mistakenly thinking about only cashflows and WHEN the payments are made, rather than the accounting treatment. Expense on the books does not always mean cash out the door, and vice versa.
Easily could have renegotiated his contract for another 2 years with the same 6 million dollar buyout over the course of that extended term and then promptly fired him. This could have meant a much easier to swallow 1-1.5 million dollar a year hit instead of 2-2.5 million per year. If an FBS program can't come up with 1-1.5 million a year for a buyout, then there is a lot more wrong with this ship than we know.
and they play in an indoor stadium that only holds in the low 30's, not a really easy school to recruit at, good school though.
Morgan Burke needs to be shown the exit door for giving Hazel such a contract. All that guaranteed money for a coach who had one winning season? That was a joke on our Athletic Dept. and a very poor business decision by our AD. We need new leadership and direction. My hope is that the University announces some sort of transition for a new AD this spring. Morgan has championed replacement plans and the University needs to put one in place for him. Let him work in the alumni assoc or elsewhere until his time is up.
If Hazell is owed $2.2 million a year x 3 years, why would he renegotiate it to $1.32 million a year x 5 years? What's the incentive to wait an additional 2 years for your money?
Wrong, the the indoor stadium seats over 49,000 for football. Thats just a few lest than RA and after last year we don`t need the east side and the north end zone to put fans in. SAD SAD SAD!! Thanks again Morgan
But now we are back to who was the dumbbell that drafted/agreed to the contract in the first place..........MB.
