KU athletics department says $58.8 million debt ‘manageable’
According to documents from Kansas Athletics Inc. and an interview with its chief financial officer, the athletics department owes about $58.8 million in debt as of the end of the 2011 fiscal year, which ended June 30.
Susan Wachter, Kansas Athletics’ chief financial officer, said the debt was “all very manageable.”
“The debt’s there, but it’s not something we can’t manage,” she said.
Jim Marchiony, associate athletic director, said the debt shouldn’t affect the other athletics operations.
“As long as it stays manageable, it will not and should not hamper us in any way,” he said.
During the last fiscal year, Kansas Athletics spent about $2.5 million on payments toward its debt, according to its financial statements. In addition to these payments, Kansas Athletics is also putting some money aside for a contractual obligation for men’s basketball coach Bill Self, who will be due a $2.1 million retention bonus from his contract in 2013. That payment — similar to retention bonuses for former athletic director Lew Perkins — will be tax-free for Self, so Kansas Athletics will likely pay Self an amount similar to the $3.59 million in gross bonus pay it paid to Perkins in 2009. Wachter said Kansas Athletics is aware of the coming payments and has been setting money aside to cover it.
Here’s a breakdown of where the department still owes money and when it should fall off the books:
Facilities Revenue Bonds: $44,255,000
This category encompasses most of KU’s current debt load. Wachter said the bonds are paying off two major projects:
Renovation to the football stadium undertaken while Bob Frederick was the athletic director. Major renovations done to Allen Fieldhouse, which were completed in 2009. Wachter said Kansas Athletics was able to refinance the football stadium debt at a lower interest rate in 2004.
Kansas Athletics paid about $1.2 million as a debt payment for the projects in the 2010 fiscal year. Wachter said the football stadium debt is set to be retired by the 2023 fiscal year, and the Allen Fieldhouse renovations should be paid off by the 2033 fiscal year.
Notes payable on Anderson Football Complex: $6 million
Wachter said Kansas Athletics will owe $6 million to help pay for the Anderson Football Complex, but, because of the way the debt is structured, the entire $6 million will be due in one lump-sum payment in 2017.
The Anderson Football Complex was completed in time for the 2008 football season. Most of the funding for the project came from private donations from Dana and Sue Anderson, former basketball team captain Tom Kivisto and his family, and other donations.
Contributions payable to the university: $4,727,489
Kansas Athletics has an agreement with KU to pay for some of the debt associated with the Ambler Student Recreation Fitness Center, Wachter said. The athletics department’s payments supported the building of new gyms in the building.
The athletics department paid $465,000 to the university last year, and its total obligation is scheduled to be paid by June 2020, Wachter said.
Long-term debt on Jayhawks Tennis Facility: $2,537,973
The athletics department spent $3.1 million in 2010 to purchase the First Serve Tennis Center at 5200 Clinton Parkway from Mike Elwell.
Kansas Athletics paid $61,040 on the debt associated with the purchase last year and is scheduled to have it paid off by June 2015.
Capital lease obligation for Allen Fieldhouse video board: $1,245,317
Kansas Athletics paid just more than $571,000 toward the debt on the video board last year, and the entire debt is scheduled to be paid by the 2013 fiscal year.
By Andy Hyland