Magic City Classic Deals Spotlight An Inexcusable Lack of Financial Oversight by ASU and AA&MU
By: Donald V. Watkins
Copyrighted and Published on September 25, 2023
An Editorial Opinion
On September 22, 2023, I published an exclusive investigative article exposing the fact that the Alabama Sports Council ripped off Alabama State University (ASU) and Alabama A&M University (AA&MU) in producing the Magic City Classic in 2021. The article analyzed the Council’s Form 990 tax return for 2021, (which is the latest full year tax return publicly available) and four prior years (i.e., 2017, 2018, 2019, and 2020).
The article left thousands of ASU and AA&MU alumni and Magic City Classic patrons bewildered and heartbroken.
This article is about the inexcusable lack of financial oversight by ASU, AA&MU, and Birmingham City Hall over the millions of dollars made and spent from the nation’s oldest and biggest black college football Classic game, from 2017 to 2021. The groups that are hurt by this lack of oversight are the taxpayers of the state of Alabama and city of Birmingham and the loyal patrons who have built the Magic City Classic into the largest football game in the nation between two historically black colleges.
Lax Institutional Oversight Permeates Every Aspect of the Magic City Classic Financial Deals
From 2017 to 2021, ASU and AA&MU utterly and completely failed to: (a) understand the business model used by the Alabama Sports Council (the event producer) and Bruno Event Team (the "event planning manager") to create dynamic economic value for themselves, and (b) leverage their collective clout and resources to maximize Classic-related financial benefits for ASU and AA&MU.
Several months ago, Eventive Sports (formerly known as the Bruno Event Team) provided financial statements to ASU and AA&MU covering the period from 2017 to 2021 for Magic City Classic events. These statements contained bare minimum financial information, with no backup documentation for a proper financial audit of the event’s revenues and expenses.
From 2017 through 2021, the public officials who were supposed to be the guardians of the money produced by Magic City Classic events were NOT doing their jobs.
During the 2021 Fall Magic City Classic weekend, for example, trustees from ASU and AA&MU were busy getting into chic parties, sitting in skyboxes at the game (for free), and dining on catered food and drinks (for free), all while engaging in endless photo ops in and around Birmingham during the 2021 Classic weekend. Yet, the Bruno Event Team charged these extravagant trustee freebies as expense items to each institution.
Additionally, the officials in Birmingham City Hall who were supposed to subject the Magic City Classic events to proper financial due diligence and who pushed city taxpayers to subsidize the Classic with city services, perks, and direct cash to each university simply looked the other way. .
As was the case with the universities, no one inside City Hall served as a guardian of the tax money the city of Birmingham invested in promoting the Magic City Classic events.
We will explain why the city's failure of financial oversight occurred in an upcoming article.
ASU and AA&MU Never Properly Audited the Financial Books and Records of the Event Producers/Managers
ASU and AA&MU have never had full and complete access to the financial books and records of the Alabama Sports Council and the Bruno Event Team for the purpose of conducting proper annual audits on the Magic City Classic events handled by these contractors, from 2017 to 2021. As a result, the universities have never properly audited the money generated and expenses pay in connection with the Classic events during these years.
The financial books and records for the 2022 Magic City Classic, including the Alabama Sports Council's tax return for that year, have not been provided to the Internal Revenue Service or ASU and AA&MU.
In 2021, the Alabama Sports Council reported $5,878,430 in revenues on its tax return for sports events it produced that year. A whopping $3,897,417 (or 66.3%) was derived from Magic City Classic events (i.e., the Fall Magic City Classic and the much smaller Spring Magic City Classic).
As stated earlier, Eventive Sports provided AA&MU with financial statements for Magic City Classic events held from 2017 to 2021. For financial accountability, transparency, and auditing purposes, the financial statements are useless.
A review of Eventive Sports' financial statement for the 2021 Fall Magic City Classic event illustrates this point. [Click here to read this financial statement.]
The financial statement provides virtually NO details on any item of revenue or expense. It is a “bare bones” financial statement for a multimillion dollar event.
No vendor, professional service provider, consultant, or influencer is listed in the financial statement by name, address, amount paid, and nature and scope of services rendered.
No supporting documentation of any kind was supplied to aid the universities in verifying the reasonableness and/or necessity of the expenditures listed.
“A whopping $175,710 in undefined “Miscellaneous” expenses were listed across multiple categories in the 2021 financial statement.
There is $89,351 listed in “Food and Beverage” expenses, with no record of what vendor(s) provided this service. It is not known whether the food and beverage service for the Classic was provided by Five Start Concessions, LLC, which is co-owned by Gene Hallman and Ronald Bruno, or a third-party food and beverage vendor. If Five Star provided this service, in whole or in part, who vetted, waived, and/or approved this conflict of interest? Remember, the Alabama Sports Council paid the Bruno Event Team a management fee of $770,469 for the Magic City Classic events in 2021.
The “Celebrity Fee” is listed as $117,212. Yet, there is no itemization of all of the persons who feasted off this fee, and in what amounts.
There is no explanation for what the non-profit Alabama Sports Council did to earn and/or retain a profit of $401,399 for the Fall Magic City Classic. Likewise, there is no explanation for what the Council did to earn and/or retain $226,039 for the Spring Magic City Classic event in 2021.
In a May 24, 2023, email from Eventive Sports to AA&MU, the Alabama Sports Council’s $716,789 in total Magic City Classic payments to itself in 2021 was characterized as a “management fee” that was charged to ASU and AA&MU on top of the $770,469 “event planning management" fee that was paid to Gene Hallman's Bruno Event Team that year.
Instead of conducting the proper due diligence and full audits on the financial books and records of the Alabama Sports Counsel and Bruno Event Team/Eventive Sports with respect to Classic-related revenues and expenses, ASU and AA&MU merely focused on the amount of money that the Alabama Sports Council paid to each university each year.
Between 2017 and 2021, ASU and AA&MU handled the financial dealings associated with the Magic City Classic like they were beggars in a charity line, rather than major players in a highly profitable college football Classic event.
Who Got the Money?
ASU, AA&MU, and City Hall officials should have been asking the questions raised in this article. They apparently failed to do so -- each year. Why?
Our next article will focus on who got the money from the Magic City Classic, how they got it, and why they did not want their names revealed in the annual financial statements that were ultimately provided to ASU, AA&MU, and the city of Birmingham.
In investigative journalism, there is always a money trail available somewhere. All we did for this story was follow the money and connect the dots.