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Change was costly at Kansas, while K-State collected cash in 2012

  • Kansas City Star
  • Published Sunday, March 10, 2013, at 7:17 a.m.

One year ago today, the sights and sounds inside Sprint Center provided the backdrop for a year of change in major college sports around Kansas City.

The final moments of Missouri’s Big 12 Tournament championship victory over Baylor counted down, and Tigers fans used the occasion to chant “S-E-C … S-E-C,” with the school’s official departure to the Southeastern Conference three months away.

Through NCAA financial disclosures and tax returns for the 2011-12 financial year, which ended June 30 but recently became available through open records requests, we have a better understanding of the cost of embarking on new paths.

Millions.

Missouri received $13.1 million less than Oklahoma in Big 12 revenue distribution. According to conference tax returns, the Sooners received the greatest chunk at $14.5 million, the Tigers earned $1.4 million. The withholding served as the Tigers’ penalty for departing the Big 12.

Kansas and Kansas State remained in a newly structured and financially healthy and stable Big 12 but still felt changes in their pocketbooks.

Kansas reported an $8.7 million loss for the school year, mostly because of severance payments to fired football coach Turner Gill and the assistant coaches.

Kansas State, meanwhile, reported about $6.7 million less in operating revenue than the previous year. But the Wildcats took in $12.3 million more than they spent, making K-State the only one of the three major Division I athletic departments in the area that reported a 2011-12 bottom line — revenue minus expenses — in the black.

The Wildcats’ financial performance has helped keep $93 million worth of improvement projects such as the recently completed basketball practice facility and the current luxury boxes and press box on the west side of Snyder Family Stadium chugging along.

“It’s so important to have the revenue streams, the ticket sales, the conference distribution, the gifts, increasing,” K-State athletic director John Currie said.

At Kansas, basketball ticket revenue for 2011-12 of about $12 million nearly doubled football ticket sales of $6.5 million. That was the 2011 football season, Gill’s second and final year. By firing Gill after the 2011 season, Kansas was on the hook for the remainder of Gill’s deal, $2 million annually for three years, plus the contracts of the assistant coaches.

Add in the severance for former coach Mark Mangino, who resigned under pressure following the 2009 season, KU has paid $9 million in contracts to football coaches after they were no longer coaching the Jayhawks.

The buyout money was mostly raised through donors. For the past six years, the school has paid its head football coach between $2.2 million and $2.5 million annually.

Current coach Charlie Weis is in the second of a five-year deal that pays him $2.5 million per year.

“Football has always been critical, and conference realignment had just reinforced how much football is the lifeblood of college athletics,” Zenger said.

But Kansas also pays for success. The salary and benefits of basketball coach Bill Self climbed to $4,757,526 for 2011-12, the season that ended with the Jayhawks playing for the national championship.

Kansas State reported a record amount of revenue from conference and NCAA sources — $22 million.

Currie said the Wildcats included income from additional sources on that ledger, such as bowl expense reimbursement from the conference and student-athlete opportunity income from the NCAA.

The Big 12 portion of that income was announced at last year’s annual spring meeting as a record $19 million payout. The money distributed by the Big 12, in almost equal shares, comes from television contracts, bowl games and the NCAA Tournament, most prominently men’s basketball.

But the Big 12’s 2011-12 tax return shows no more than $14.5 million was paid to any school, and Kansas State’s take was a shade less than $14 million.

So, what’s the difference?

It’s the bonus money, the income that Missouri didn’t receive.

Steve Pace, the Big 12’s chief financial officer, said the $45 million up-front money is considered deferred revenue. The Big 12 agreed to a 13-year deal with Fox in 2011, and last year reached agreements with Fox and ESPN to run concurrently through 2025 with a combined value of about $2.5 billion.

But $45 million of that was paid up front. The eight schools that remained in the Big 12 received the money in 2011-12, which pushed their league-distributed income to about $19 million each.

Deferred revenue is counted differently, Pace said. It’s money that would have to be returned if terms of the contract aren’t fulfilled.

Kansas only reported $14 million in conference revenue in 2011-12 but actually received $19.6 million in cash distributions from the Big 12. KU will recognize the $5.3 million in deferred revenue over the life of the 13-year TV contract instead of in one lump sum.

In Manhattan, the effect of the revenue is clearly visible upon entering Bramlage Coliseum from the east. As you walk past the basketball practice facility you see the cranes rising high above the football stadium’s press box.

“You have to keep improving,” Currie said.

And that takes money.

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