UCF athletics continues to build its budget with move into Big 12

The UCF athletic department’s year-end NCAA budget report shows some of the financial challenges the Knights faced transitioning from the American Athletic Conference to the Big 12.

The department reported $84.6 million in total operating revenue during the 2023 fiscal year (July 1, 2022-June 30, 2023), down slightly from the $89.2 million in 2021-22. UCF reported an operating expense of $88.2 million, an increase from $69 million reported last year, some of which was due to the school’s move to a Power-5 conference.

The report, however, doesn’t paint the complete financial picture because the NCAA doesn’t take into account funding capital projects, operating funds and capital gifts.

While UCF didn’t officially become a Big 12 member until July 1, 2023, the department spent much of the 2022-23 fiscal year working to prepare the athletic department for the transition, including expanding its operating budget.

This process was challenging as the Knights won’t receive their share ($18 million) of the annual revenue from the Big 12 until the 2023-24 fiscal year, and even then the school won’t receive a full share until 2025-26. Adding to the difficulty was an $18 million exit fee UCF faced from the AAC.

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“We’re transitioning to a high-level conference and trying to compete at a very high level from a resource standpoint,” UCF athletics director Terry Mohajir told the Sentinel. “So you’re gonna see ebbs and flows of our budget reports annually.”

UCF is currently near the bottom of the Big 12 regarding its athletic department operating budget, but the Knights hope to push into the top half eventually. With new incoming members Arizona, Arizona State, Colorado and Utah, the league continues to evolve and get stronger.

“The goalpost keeps moving,” said Mohajir. “They’re raising money. They’re building new stadiums and they’re adding new premium areas.”

Part of the challenge facing Mohajir has been paying down operating debt that he inherited when he arrived in 2021.

Even so, UCF’s athletic department continues to invest in itself.

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Since the department doesn’t receive state funding for its operations budget, UCF has been working to put together a reserve fund of $5 million. The funds allow the Knights to have cash to pay bills and day-to-day operations, but that money isn’t included in the NCAA report.

Another part of the long-term investment comes from the Mission XII initiative, created to raise funding for the school’s transition into the Big 12. It’s already paid dividends for various projects across campus, including $12 million worth of upgrades to Addition Financial Arena for basketball and volleyball.

“We’ve had a lot of record-breaking fundraising numbers and ticket sales and revenue records,” said Mohajir.

The athletic department also received approval for $90 million worth of funding from the Orange County commissioners in Tourist Development Tax money, which will be used to redo the football tower at FBC Mortgage Stadium. It’s all part of a proposed football campus that Mohajir believes can help UCF contend in the Big 12 landscape.

Other notes from the NCAA report:

Football generates much of the department’s revenue (45% or $38 million), according to the NCAA report, with $5.2 million coming from ticket sales. Overall ticket sales among its athletic sports went from $5.78 million to $6.24 million in 2022-23.

The Knights finished 9-5 in their second season under coach Gus Malzahn, capped by a 30-13 loss to Duke in the Military Bowl on Dec. 28, 2022.

UCF posted a 6-6 regular-season record during its first Big 12 campaign before losing to Georgia Tech in the Gasparilla Bowl.

Donor contributions increased from $14.3 million reported in 2021-22 to $14.6 million last fiscal year. Those figures only count money spent and not financial commitments made to the department.

UCF received $8.38 million in revenue from the AAC and $1.5 million distributed from the NCAA. The Knights also saw their royalties, licensing, ads and sponsorship increase from $6.8 million to $12.6 million.

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Meanwhile, coaching salaries increased from $14.3 million to $15.1 million and the cost of support staff department-wide went from $12.7 million to $14.3 million.

Other areas that saw increases included recruiting, with football nearly doubling its expenses from $494,932 in 2021-22 to $869,188 last fiscal year. Recruiting expenses went from just over $1 million to $1.57 million.

The department also spent more on fundraising, marketing and promotions last year ($3.33 million), team travel ($4.8 million) and sports equipment, uniforms, and supplies ($2.56 million). UCF nearly doubled the money it spent on athletic facilities’ debt service, leases and rental fees from $5.6 million in 2021-22 to $12.5 million last year.

As UCF continues to work toward being a top athletic department in the Big 12, Mohajir preaches patience throughout the process.

“I’ve asked all of our coaches, support staff, and fans to be patient with us. We’re trying to resource as quickly and efficiently as possible,” he said. “We still have capital projects, donors that have given major gifts that we got to execute on and we got the TDT grant. We’re excited to execute that plan as well. So we got a lot of a lot of things in the hopper.”

Email Matt Murschel at mmurschel@orlandosentinel.com or follow him on X at @osmattmurschel.