Joined: Jun 2010
I Root For: UC
Location: SD & Cincinnati, USA
RE: Sports venues are money losers
(04-19-2017 03:44 PM)Frank the Tank Wrote:
(04-19-2017 09:35 AM)miko33 Wrote:
(04-19-2017 08:48 AM)orangefan Wrote:
(04-19-2017 08:24 AM)Attackcoog Wrote:
(04-19-2017 07:56 AM)miko33 Wrote: I've seen this argument before - that athletics is a small part of an overall university so who cares if they overspend a little. Their scope is small so no big deal. I also saw in another thread that you equated college sports to being a marketing arm for universities, and that the deficit spending (dipping into the general funds) is not a big deal because of the advertising generated thru sports. I get that too. However, I think you are not completely seeing the future trends and what has been happening to universities. To broaden the scope of this response, I see the following phenomena happening at the universities:
- The majority of states are not subsidizing all public universities to the levels they used to.
- With annual costs exceeding the rates of inflation, the ROI for an increasing percentage of bachelor degrees offered is poor.
- More kids are deciding to complete their first 2 years at community colleges to help contain costs
- Attending classes online is becoming more popular and requires less time on campus - and in some cases zero time on campus
All of this points to larger percentages of people moving away from the traditional concepts of the college experience that we experienced a generation or 2 ago. We're going to see significant changes to the universities in the future. How that will look, I'm not 100% sure. I imagine most states will take a "circle the wagons" approach for their "best" public universities, and IMHO if they were smart funnel more money towards the community colleges and trade schools. This will put significant pressure on the mid-tier schools that are not the "brand name" schools but also not low enough to be the trade schools for students pursuing associate degree level and skill level jobs. That doesn't touch upon what I expect to see is fierce competition between the "branded" public universities for students thru online classes. I expect competition to become more fierce.
I know what your response will be - especially to the last few sentences above - that college sports becomes more important as a means to market schools to differentiate the products. I think it will be too late for that. I think the schools - the public universities specifically - will be commoditized. The dominant mechanism will become price, then geography a distant second and the rest will become background noise.
I don't disagree with any of that. I'm merely saying the runaway costs of college have very little to do with athletics. In other words, the money athletics is "losing" would likely have to be spent on traditional marketing and alternative student amenities if you didn't have a D1 athletics program.
In Texas, Gov Perry had an initiative to create a quality public 4 year college degree that would cost just $10K. It now exists, but it requires jumping through a lot of hoops and is only available in limited locations. So, if you don't live near those locations, you'll need room and board which runs up the cost to near traditional contract college levels. The answer is a state wide system that utilizes the local community colleges, on-line facilities, and at least one of the major state systems---to create a $10K degree that's accessible no matter where you live in the state. That way, you can live at home while you finish the degree, minimizing costs. It shouldn't really be that hard to create in today's connected internet environment. Its time has come.
The flipside is that there is a large group of students that want the high end college experience, not just a degree at the lowest cost. They want Disney World not Walmart. Schools cater to this group since it often includes the students that are in the highest demand, however it drives up the cost for everyone. Those complaining about the high cost of education generally ignore that this is a significant factor driving the cost. However, I applaud those trying to create value options for students and their families.
That could very well be true. However, even for this group of students the cost of attendance may cut into their time on campus and thus ultimately governed by finances. Your best and brightest - those who can get a full academic ride - and even those who can get scholarships for some type of achievement - will likely still go to campus. Even some of the poor who will get grants and scholarships for poverty may be too. However, the majority of the kids will be middle class and will need to carry some level of debt even pursuing the cheaper alternatives. We'll see how it unfolds in the future, but I suspect with these types of changes you won't see the same level of alumni donations as in years past because the experiences will be much more in line with Walmart than Disney.
There's some validity to what you're stating, although the broader issue for society is that the "middle class" is really not that large. Instead, we have a large upper class and a large lower class. The income distribution is more barbell-shaped as opposed to having a bulge in the middle.
As a result, the upper class segment that is attracted to and willing to pay for amenity-filled colleges is likely larger than what you're arguing. For instance, there are around 1.7 million people that live in DuPage County and Lake County in the Chicago suburbs and they're two of the highest income counties in the nation. Just those two counties alone graduate tens of thousands of students each year that have the grades, test scores and finances to attend a whole slew of colleges. Now, cost certainly matters even to higher income people. However, in these "mass affluent" communities, they're generally not choosing fewer amenities for lower tuition. Instead, they're choosing lower tuition for schools with similar amenities, e.g. Indiana University offering enough money to make it less expensive than in-state tuition at the University of Illinois.
I think the news media focuses too much on the wealthiest 1% (similar to how so many news stories about college life use Harvard as a proxy). However, it's really the top 20% that disproportionately fill up the top tiers of universities in large numbers and they're quite picky. Cost is certainly a big factor, but they also take into account prestige, program rankings, amenities, environment and other factors beyond simply straight cost. These aren't small numbers of students -- they're enough to fill up the classes at the top 100-plus universities in the country.
Note that "amenities" can be interpreted in different ways. Some of those might be the big-time sports programs that we talk about here. Others could be the fact that they're liberal arts colleges with smaller class sizes. Others could be a location in a highly desirable area, such as NYU in Manhattan. The amenities that are important for each individual student are going to be different, but the point is that colleges that are competing for the "mass affluent" generally need *some* type of hook beyond just straight cost.
I agree that the focus on 1% is overblown. But the middle class is not disappearing. A lot of people (particularly politicians) profit by spreading this myth, but it's still a myth.
My little brother and my grandma both technically are in poverty according to US government statistics. They'd fall in the lower end of the "barbell." But "college poor" and "retired" are a lot more similar to "middle class" than they are to "poverty."
Simple income distributions don't tell the full tale. Think of it this way: how many people who are younger than 30 or older than 65 earn over $100,000? It's almost zero; only people from 30-65 (44% of households) have a chance to earn over $100,000 a year. Yet despite this, 25% of American households earn over $100,000 a year.
The dynamics are very different from 1970, when most 22 year olds had been working full time for 4 years, and there were few retirees. These days people spend a lot lower percentage of their lives working their "real" job where they earn peak incomes.
Once you account for a person's age, the vast majority of Americans are solidly middle or upper-middle class.