The Tennessee athletic department is nearly $200 million in debt, leaving the Volunteers as the most financially strained university in the SEC.
According to a report from Michael Smith at Sports Business Daily, the school has suffered from having to pay fired head coach Derek Dooley, who no longer is with the team and has amassed a $200 million debt with just $2 million in reserves. The school hired Butch Jones from Cincinnati after firing Dooley in November after three seasons, but the department still owes Dooley a $5 million buyout and $2 million more to his assistants.
The university has struggled in football over the past few years and has been struggling with attendance and raising revenues. According to the report, "after staggering to losing football seasons in four of the last five years and seeing attendance drop to levels last seen in the 1970s, the Vols find themselves mired in more than $200 million of debt, the most in the SEC, with reserves of just $1.95 million, the least in the conference."
"The bottom line is that, for SEC schools with extraordinary revenues, the profit margin is still very thin," said Bill Carr, a former AD at Florida who now consults with athletic departments on strategy and searches. "Whether it's Tennessee or any other school, if you're not selling tickets at full bore and getting contributions to go with them, and that revenue tapers, it becomes very hard to put away the dollars you need. And then you have some undesired expenses like buyouts, and you can wind up in a negative position. The margin is razor thin for most schools."
The athletic department spends a startling $21 million a year on debt payments, $13.5 million of which comes from the school's stressed $99.5 million athletic budget and the rest from donations.
"We've got to get football healthy," athletic director Dave Hart said. "That's our economic engine. When that program is successful, everybody wins."
According to ESPN.com, the school is also suffering financially due to a number of expansions and upgrades to Neyland Stadium, which cost more than $130 million. The university is attempting to raise reserves into the $50 million range. To help with alumni and fundraising, the level of play on the field will have to be better.
"That's our economic engine. When that program is successful, everybody wins," Hart said.
Tennessee won a national championship in 1998 under coach Phillip Fulmer, but hasn't replicated that success since. Fulmer coached at the school from 1992 to 2008 and won 152 games. The team has been unsuccessful in finding a head coach since Fulmer departed, having hired Lane Kiffin in 2009 before moving on to Dooley in 2010.
In three years with the team, Dooley went just15-21 overall and 4-19 in Southeastern Conference play. The team hasn't finished over .500 since going 7-6 in the final season under Kiffin and 2012 was a struggle for the program as well.
The team hasn't taken home a conference title since winning the national championship in 1998 and the Volunteers haven't been bowl-eligible since 2010. The team was ranked 107th last season in scoring defense, allowing 35 points per game.
According to ESPN.com, "After winning at least eight games for 16 consecutive seasons from 1989-2004 and posting double-digit wins in nine of those years, Tennessee hasn't earned more than seven victories in any of its last five seasons."
The Volunteers opened with a 3-1 record, but then lost six of the next seven games. The team finished with a 37-17 win over Kentucky at home to earn their first conference win of the season.
Junior quarterback Tyler Bray was fantastic despite Tennessee's struggles, passing for 3,612 yards and 34 touchdowns with 12 interceptions. He completed nearly 60 percent of his passes and threw at least four touchdowns in six games this season. In the final game against Kentucky, Bray threw for 293 yards and four touchdowns with zero turnovers.
Dooley has found himself a new job though and will still be collecting money from Tennessee. According to league sources that spoke to ESPN NFL Insider Adam Schefter, Cooley is set to be hired by the Dallas Cowboys as their new wide receivers coach
The Tennessee Volunteers haven't been at the top in the SEC in any major sports over the past few years, but now they are number one in a category they would rather not be.
