ATHENS, Ga. – The University of Georgia Research Foundation is spending faster than it is earning money. The nearly $6 million loss on a television station the foundation bought is only part of the reason for the shortfall.
Foundation board members and UGA administrators will have to reprioritze spending, according to UGA vice president for research and foundation board member David Lee. The board met Wednesday and adopted a 2012 fiscal year budget of $145 million. The proposed budget is equal to the 2011 plan.
The foundation’s assets totaled $48.8 million in 2009 but could decrease by nearly half that amount to $26.7 million by fiscal year 2015, according to projections made by UGA budget planners. Despite the deficit and with federal stimulus dollars shrinking, Lee says UGA researchers are bringing in research grants at a pace that could match last year’s record $176 million. The foundation receives a portion of most UGA research grants and uses the money to promote research at the university.
In 2008, the board voted to spend $5.8 million to acquire WNEG-TV, a commercial television station based in Toccoa. But advertising sales plummeted soon after the sale and the station began losing $1 million per year.
In December, the board approved UGA President Michael Adams’ request to turn the station over to state ownership. With that decision, the station joined Georgia Public Broadcasting’s state network of public radio and TV stations.
During Wednesday’s meeting, the board voted to dissolve the company formed to manage the station, UGARF Media Holdings. They also agreed to sell or donate the station’s studios and other property in Toccoa.
Adams said university funds will be used to repay the foundation’s TV station investment. A specific date for repayment has not been given, but Adams said repayment could be spread out over several years.
The foundation’s failed TV station investment is not the only reason the foundation’s income has fallen. The global financial crisis has caused stock prices, real estate values and other investments to decline.
Licensing and royalty income declined from $30.5 million in 2009 to $6.7 million in 2010 largely because the patent for Restasis prescription eye drops expired.