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SEC reports 2024 fiscal year deficit after expansion payments to Oklahoma, Texas
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- SEC reports 2024 fiscal year deficit after expansion payments to Oklahoma, Texas
Headed for a revenue windfall from new television arrangements and its expansion this school year, the Southeastern Conference had a slight income downturn during its 2024 fiscal year, as well as a deficit for year, the conference's new federal tax records show.
However, revenue distributions to its schools for a year ending Aug. 31, 2024, included $27.5 million apiece to Texas and Oklahoma — which joined the conference on July 1 — and slight increases in the amounts provided to the 14 incumbent members.
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The incumbent schools received an average of about $52.5 million during fiscal 2024, according to the document, up from about $51.3 million per school in fiscal 2023 .
The SEC's fiscal 2024 payments were detailed in a document provided by the conference this week in response to a request from USA TODAY Sports.
The new return also included commissioner Greg Sankey's total pay for the 2023 calendar year: Nearly $4.3 million, including nearly $4.2 million in base pay. That's an increase of just over $675,000 (nearly 19%) from his total reported for 2022 and makes this first time Sankey has been above $4 million in annual compensation.
The SEC is the first of the Power Four conferences to release its tax records for fiscal 2024. Its per-school distributions likely will be surpassed by the Big Ten's, based on fiscal 2024 NCAA financial reports the schools have been releasing and Iowa state board of regents budget documents from this past July showing the University of Iowa's revenue from the Big Ten for fiscal 2024 being projected as nearly $62 million . The Big Ten generally provides its longest standing members with equal amounts.
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The SEC's fiscal 2024 payments were detailed in a document provided by the conference this week in response to a request from USA TODAY Sports.
The distributions to Oklahoma and Texas were a combination of the schools getting back the refundable application fees that they paid to the SEC in August 2021 and receiving transition payments that were funded by ESPN. Both of these arrangements were detailed in the respective amended and restated new member agreements to which the parties agreed in May 2023 .
Oklahoma and Texas athletics departments spokespeople said in respective statements to USA TODAY Sports that their application fee was $15 million and the transition payment was $12.5 million.
The new tax record shows the SEC with nearly $840 million in total revenue for fiscal 2024, a roughly 1.5% decline from the nearly $853 million it reported for 2023.
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The new revenue total still keeps the SEC on a path toward $1 billion to $1.1 billion in revenue during its 2024-25 fiscal year, with the additions of OU and UT, ESPN/ABC taking over the Saturday afternoon football TV package that CBS previously held and the College Football Playoff's expansion to 12 teams.
The conference's expenses, primarily the distributions to the schools, increased to almost $899 million from just over $823 million.
The conference attributed the $59 million deficit primarily to accounting procedures and the timing of its receipts of certain revenues, compared to the timing of payments. For example, the Oklahoma and Texas transactions, the SEC said in a statement: "Specifically, for the current year tax return, the Conferencepaid out two amounts to member schools that were recognized as revenue inprior years but shown as expenses in the current year tax return."
The SEC said it also had this type of circumstance with regard to its revenue and per-school distributions from its contract with the Sugar Bowl and ESPN. The game had been part of the College Football Playoff once every three years. In those years — one of which was the 2024 fiscal year — the SEC would get no money from the Sugar Bowl-ESPN contract. So, it said it held back some revenue from each of the two years when it did get paid under the Sugar Bowl-ESPN contract to "stabilize" school distributions in a year such as 2024.
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Under the terms of their new member agreements, Oklahoma and Texas are set to receive no money from the SEC's primary revenue-sharing pool in 2024-25. However, they stand to collect millions through football- and men's-basketball-specific distributions that exist under the SEC's bylaws. The could receive additional money through other specially negotiated terms . They are set for full shares starting in 2025-26.
SEC loans update
The new documents showed that as of the end of the 2024 fiscal year, the SEC continued to have $350 million in outstanding loans it took in 2021 to provide each of its schools with a $23.3 million advance on future conference distributions to ease the budgetary impact of the COVID-19 pandemic.
The conference paid $24.6 million in interest on the loans in 2024. The means that, through Aug. 31, 2024, the conference had paid a total of about $56.5 million interest.
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But the SEC said in a statement that it began repayment of the loan in October 2024 – during its 2025 fiscal year – and the conference now has settled on a plan to repay the loans over three years. So, while conference revenues and school distributions are likely to grow substantially in 2024-25, those distributions will be smaller than they otherwise would have been.
In addition to the loan interest, the SEC reported spending just over $4.3 million on outside legal fees and nearly $1.3 million on lobbying. Both amounts represent increases of more than 50% over the amounts reported for those items in fiscal 2023.
SEC commissioner's pay
Sankey's pay, and that of other conference executives, is reported on a calendar-year basis. IRS rules require non-profit organizations to report pay amounts for the most highly paid employees base on the calendar year completed during their fiscal year. For the SEC, that's 2023.
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In July of that year, the conference announced a contract extension with Sankey that it said Thursday is set to run through June 30, 2028.
The new document showed that he was not the only conference executive to get a substantial pay increase in 2023. Deputy commissioner Charlie Hussey's total pay increased by just over $200,000 to a little more than $860,000. Associate commissioner Tiffany Daniels' pay climbed by more than $115,000 to nearly $565,000.
"Our key leaders are often approached with other opportunities and salary adjustments reflect the importance we plce on retaining highly effective leaders," Sankey said in a statement provided by the conference.
This article originally appeared on USA TODAY: SEC reports deficit for 2024 after Oklahoma, Texas payments
