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Sports venues are money losers
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MissouriStateBears Offline
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Post: #21
RE: Sports venues are money losers
(04-18-2017 07:30 PM)arkstfan Wrote:  Arenas can be profitable but you really have to be careful about the decisions you make.

Sprint Center in Kansas City, perfect example. Which actually makes more money than it would without a sports tenant.
04-18-2017 08:14 PM
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billybobby777 Offline
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Post: #22
RE: Sports venues are money losers
(04-18-2017 06:59 PM)Love and Honor Wrote:  Read the book Field of Schemes if you'd like a good read on the subject.

It's absolutely fabulous...they give some examples of arenas built in small markets across America with weeds pooping up and grass poking through the sidewalks...no tenants, no events. Just a big massive building in the middle of nowhere sitting empty because a greedy developer talked a small town mayor into putting a game changing venue in their town with the logic," if you build it, they will come" Nope.
04-18-2017 08:20 PM
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Love and Honor Offline
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Post: #23
RE: Sports venues are money losers
(04-18-2017 08:20 PM)billybobby777 Wrote:  
(04-18-2017 06:59 PM)Love and Honor Wrote:  Read the book Field of Schemes if you'd like a good read on the subject.

It's absolutely fabulous...they give some examples of arenas built in small markets across America with weeds pooping up and grass poking through the sidewalks...no tenants, no events. Just a big massive building in the middle of nowhere sitting empty because a greedy developer talked a small town mayor into putting a game changing venue in their town with the logic," if you build it, they will come" Nope.

Reminds me of that episode of The Simpsons where Marge saves the town from the swindler with the monorail, only this is real life. While some cities have wised up and have stopped paying or now demand more private investment, you still see some baffling cases like how Atlanta got a new ballpark with Dallas soon to follow. What were the teams gonna do if they said no, move to Albuquerque?

The irony is that some of those owners are probably kicking themselves over the decision to build new and/or relocate. Who goes to a Tigers or White Sox game for Comerica Park or whatever US Cellular Field is called now? How many more would go to Tiger Stadium or Comiskey Park if they were maintained like Fenway and Wrigley? Similarly, how much fun are the Coyotes having away from Winnipeg in the desert while the new Jets do pretty well?
04-18-2017 10:20 PM
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miko33 Offline
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Post: #24
RE: Sports venues are money losers
(04-18-2017 12:43 PM)Attackcoog Wrote:  
(04-18-2017 12:27 PM)miko33 Wrote:  The articles apply to baseball ball parks; however, it can easily be applied to stadium projects for FB and most likely other sporting venues too.

http://www.richmond.com/opinion/our-opin...af399.html

https://www.wsj.com/articles/new-ballpar...1491912002

The economic projections never pan out. How many universities screw themselves over trying to compete with the FB and BB factories who are only too happy to continue ratcheting up the costs. Out of all schools playing in the revenue sports conferences of FBS (and the main BB counterpart league), only 20 to 30 can actually afford our current levels. UMD is a mess. Rutgers is a mess. Cal-Berkeley is a mess. Vast majority of these schools playing at the highest levels are taking from the general funds to subsidize athletics.

Couple all this with the realities that 1) tuition costs continue to rise at rates higher than annual inflation, 2) states are funding public universities at lower levels than they have in decades and 3) people are wising up to false narrative that all college is good - no matter what degree choice you make.

I don't see how all of this is sustainable over the long term.

Its probably not---but sports isn't really the reason for the issue. These schools have billion dollar budgets. The athletics budgets support much of their own costs with most G5's running deficits of 10-20 million. Most P5's are running athletic deficits of just a few million. Its like pointing to foreign aid in the US budget as the reason for our national debt. Like NoDak said, most stadiums that are responsibly built with a reasonable cost and a significant portion of the funds donated---those will work out fine. A situation like Colorado St is one where I'd be concerned. Overly high cost for a 30K stadium with most of it financed with debt. That situation could easily go bad if ticket sales go south after a poor season or two.

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.
04-19-2017 07:56 AM
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Attackcoog Offline
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Post: #25
RE: Sports venues are money losers
(04-19-2017 07:56 AM)miko33 Wrote:  
(04-18-2017 12:43 PM)Attackcoog Wrote:  
(04-18-2017 12:27 PM)miko33 Wrote:  The articles apply to baseball ball parks; however, it can easily be applied to stadium projects for FB and most likely other sporting venues too.

http://www.richmond.com/opinion/our-opin...af399.html

https://www.wsj.com/articles/new-ballpar...1491912002

The economic projections never pan out. How many universities screw themselves over trying to compete with the FB and BB factories who are only too happy to continue ratcheting up the costs. Out of all schools playing in the revenue sports conferences of FBS (and the main BB counterpart league), only 20 to 30 can actually afford our current levels. UMD is a mess. Rutgers is a mess. Cal-Berkeley is a mess. Vast majority of these schools playing at the highest levels are taking from the general funds to subsidize athletics.

Couple all this with the realities that 1) tuition costs continue to rise at rates higher than annual inflation, 2) states are funding public universities at lower levels than they have in decades and 3) people are wising up to false narrative that all college is good - no matter what degree choice you make.

I don't see how all of this is sustainable over the long term.

Its probably not---but sports isn't really the reason for the issue. These schools have billion dollar budgets. The athletics budgets support much of their own costs with most G5's running deficits of 10-20 million. Most P5's are running athletic deficits of just a few million. Its like pointing to foreign aid in the US budget as the reason for our national debt. Like NoDak said, most stadiums that are responsibly built with a reasonable cost and a significant portion of the funds donated---those will work out fine. A situation like Colorado St is one where I'd be concerned. Overly high cost for a 30K stadium with most of it financed with debt. That situation could easily go bad if ticket sales go south after a poor season or two.

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 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.
(This post was last modified: 04-19-2017 12:17 PM by Attackcoog.)
04-19-2017 08:24 AM
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orangefan Offline
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Post: #26
RE: Sports venues are money losers
(04-19-2017 08:24 AM)Attackcoog Wrote:  
(04-19-2017 07:56 AM)miko33 Wrote:  
(04-18-2017 12:43 PM)Attackcoog Wrote:  
(04-18-2017 12:27 PM)miko33 Wrote:  The articles apply to baseball ball parks; however, it can easily be applied to stadium projects for FB and most likely other sporting venues too.

http://www.richmond.com/opinion/our-opin...af399.html

https://www.wsj.com/articles/new-ballpar...1491912002

The economic projections never pan out. How many universities screw themselves over trying to compete with the FB and BB factories who are only too happy to continue ratcheting up the costs. Out of all schools playing in the revenue sports conferences of FBS (and the main BB counterpart league), only 20 to 30 can actually afford our current levels. UMD is a mess. Rutgers is a mess. Cal-Berkeley is a mess. Vast majority of these schools playing at the highest levels are taking from the general funds to subsidize athletics.

Couple all this with the realities that 1) tuition costs continue to rise at rates higher than annual inflation, 2) states are funding public universities at lower levels than they have in decades and 3) people are wising up to false narrative that all college is good - no matter what degree choice you make.

I don't see how all of this is sustainable over the long term.

Its probably not---but sports isn't really the reason for the issue. These schools have billion dollar budgets. The athletics budgets support much of their own costs with most G5's running deficits of 10-20 million. Most P5's are running athletic deficits of just a few million. Its like pointing to foreign aid in the US budget as the reason for our national debt. Like NoDak said, most stadiums that are responsibly built with a reasonable cost and a significant portion of the funds donated---those will work out fine. A situation like Colorado St is one where I'd be concerned. Overly high cost for a 30K stadium with most of it financed with debt. That situation could easily go bad if ticket sales go south after a poor season or two.

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.
04-19-2017 08:48 AM
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miko33 Offline
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Post: #27
RE: Sports venues are money losers
(04-19-2017 08:48 AM)orangefan Wrote:  
(04-19-2017 08:24 AM)Attackcoog Wrote:  
(04-19-2017 07:56 AM)miko33 Wrote:  
(04-18-2017 12:43 PM)Attackcoog Wrote:  
(04-18-2017 12:27 PM)miko33 Wrote:  The articles apply to baseball ball parks; however, it can easily be applied to stadium projects for FB and most likely other sporting venues too.

http://www.richmond.com/opinion/our-opin...af399.html

https://www.wsj.com/articles/new-ballpar...1491912002

The economic projections never pan out. How many universities screw themselves over trying to compete with the FB and BB factories who are only too happy to continue ratcheting up the costs. Out of all schools playing in the revenue sports conferences of FBS (and the main BB counterpart league), only 20 to 30 can actually afford our current levels. UMD is a mess. Rutgers is a mess. Cal-Berkeley is a mess. Vast majority of these schools playing at the highest levels are taking from the general funds to subsidize athletics.

Couple all this with the realities that 1) tuition costs continue to rise at rates higher than annual inflation, 2) states are funding public universities at lower levels than they have in decades and 3) people are wising up to false narrative that all college is good - no matter what degree choice you make.

I don't see how all of this is sustainable over the long term.

Its probably not---but sports isn't really the reason for the issue. These schools have billion dollar budgets. The athletics budgets support much of their own costs with most G5's running deficits of 10-20 million. Most P5's are running athletic deficits of just a few million. Its like pointing to foreign aid in the US budget as the reason for our national debt. Like NoDak said, most stadiums that are responsibly built with a reasonable cost and a significant portion of the funds donated---those will work out fine. A situation like Colorado St is one where I'd be concerned. Overly high cost for a 30K stadium with most of it financed with debt. That situation could easily go bad if ticket sales go south after a poor season or two.

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.
04-19-2017 09:35 AM
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orangefan Offline
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Post: #28
RE: Sports venues are money losers
(04-19-2017 09:03 AM)MplsBison Wrote:  
(04-19-2017 08:48 AM)orangefan Wrote:  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.

Yeah, all those "Disney World" features like ... free internet access.

Go ask your local college for a trend chart on how much their spending on IT, alone, has gone up over the last 20 years. 07-coffee3

It's also recreational facilities, dorms that are more like luxury apartments than the cinder block castles we enjoyed, enhanced dining opportunities, etc. https://www.forbes.com/sites/caranewlon/...arms-race/
http://www.nationalreview.com/corner/444...-amenities

(04-19-2017 09:35 AM)miko33 Wrote:  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.

Interestingly, the Forbes article says:
Quote:“We found that the lower ability students and higher income students have a greater willingness to pay for these amenities.”

In other words? Harvard University might not spend approximately $700 million to renovate their campus, but High Point University would.
(This post was last modified: 04-19-2017 09:44 AM by orangefan.)
04-19-2017 09:39 AM
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MplsBison Offline
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Post: #29
RE: Sports venues are money losers
Sure ... but dorms and dining halls are usually money makers for schools. So offering better amenities there just allows them to charge more.

Rec sports is also an area where you can charge fees.


Internet access though, is simply expected. So it has to be built into tuition.
04-19-2017 09:52 AM
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Post: #30
RE: Sports venues are money losers
(04-18-2017 08:14 PM)MissouriStateBears Wrote:  
(04-18-2017 07:30 PM)arkstfan Wrote:  Arenas can be profitable but you really have to be careful about the decisions you make.

Sprint Center in Kansas City, perfect example. Which actually makes more money than it would without a sports tenant.

Same deal in Little Rock. When UALR, minor league hockey and indoor football moved out, profitability went up.
04-19-2017 10:05 AM
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wavefan12 Offline
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Post: #31
RE: Sports venues are money losers
(04-18-2017 12:27 PM)miko33 Wrote:  The articles apply to baseball ball parks; however, it can easily be applied to stadium projects for FB and most likely other sporting venues too.

http://www.richmond.com/opinion/our-opin...af399.html

https://www.wsj.com/articles/new-ballpar...1491912002

The economic projections never pan out. How many universities screw themselves over trying to compete with the FB and BB factories who are only too happy to continue ratcheting up the costs. Out of all schools playing in the revenue sports conferences of FBS (and the main BB counterpart league), only 20 to 30 can actually afford our current levels. UMD is a mess. Rutgers is a mess. Cal-Berkeley is a mess. Vast majority of these schools playing at the highest levels are taking from the general funds to subsidize athletics.

Couple all this with the realities that 1) tuition costs continue to rise at rates higher than annual inflation, 2) states are funding public universities at lower levels than they have in decades and 3) people are wising up to false narrative that all college is good - no matter what degree choice you make.

I don't see how all of this is sustainable over the long term.

Bonding is rough, but this is about much more than bottom line economics as sports teams are part of the fabric of the community and quality of life. Should we do a study on the economics of building a playground or park as they would be massive money losers.
(This post was last modified: 04-19-2017 10:11 AM by wavefan12.)
04-19-2017 10:10 AM
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MplsBison Offline
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Post: #32
RE: Sports venues are money losers
(04-19-2017 10:05 AM)arkstfan Wrote:  Same deal in Little Rock. When UALR, minor league hockey and indoor football moved out, profitability went up.

In other words, sounds like public money for indoor venues is a win-win for the community.
04-19-2017 10:21 AM
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miko33 Offline
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Post: #33
RE: Sports venues are money losers
(04-19-2017 10:10 AM)wavefan12 Wrote:  
(04-18-2017 12:27 PM)miko33 Wrote:  The articles apply to baseball ball parks; however, it can easily be applied to stadium projects for FB and most likely other sporting venues too.

http://www.richmond.com/opinion/our-opin...af399.html

https://www.wsj.com/articles/new-ballpar...1491912002

The economic projections never pan out. How many universities screw themselves over trying to compete with the FB and BB factories who are only too happy to continue ratcheting up the costs. Out of all schools playing in the revenue sports conferences of FBS (and the main BB counterpart league), only 20 to 30 can actually afford our current levels. UMD is a mess. Rutgers is a mess. Cal-Berkeley is a mess. Vast majority of these schools playing at the highest levels are taking from the general funds to subsidize athletics.

Couple all this with the realities that 1) tuition costs continue to rise at rates higher than annual inflation, 2) states are funding public universities at lower levels than they have in decades and 3) people are wising up to false narrative that all college is good - no matter what degree choice you make.

I don't see how all of this is sustainable over the long term.

Bonding is rough, but this is about much more than bottom line economics as sports teams are part of the fabric of the community and quality of life. Should we do a study on the economics of building a playground or park as they would be massive money losers.

Parks are not the same types of entities as sports venues in both size and scope. The capital needed to finance a new football stadium is significantly greater than putting in a new playground. Speaking of the pro sports for a moment, the money that is put into the sports venue is an investment for development around the venue plus is meant to act as a draw for people to spend money in the community. This is where the investment fails. On top of that, the money generated by the venue itself is going to a private entity and not into the local gov't.

Depending upon which sport we are talking about, the sports venue is commonly exclusive for only a number of people who spent additional annual fees on seat licenses just for the right to purchase tickets. If you want to see certain NFL teams or college teams play in person, forget about seeing them at their home field unless you pay thru the nose to get the tickets. That's not the same as spending public funds on other activities like museums, parks, symphony halls, playhouses, etc where it's open to all people.
04-19-2017 10:58 AM
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MplsBison Offline
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Post: #34
RE: Sports venues are money losers
Zero different than a city renting a venue space in a public park to a company for their annual picnic, and the company (with more employees than space allows) selling tickets for admission.

The city doesn't get the ticket money.


Zero different. Except that you don't care in this scenario. Because public facilities that host sports goes against your anti-government, anti-taxes, anti-public amenities agenda.
04-19-2017 11:01 AM
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Post: #35
RE: Sports venues are money losers
(04-19-2017 09:39 AM)orangefan Wrote:  https://www.forbes.com/sites/caranewlon/...arms-race/

Interestingly, the Forbes article says:
Quote:“We found that the lower ability students and higher income students have a greater willingness to pay for these amenities.”

In other words? Harvard University might not spend approximately $700 million to renovate their campus, but High Point University would.

Not sure I would draw that conclusion. High income would go to Harvard, and lower ability can be found in a variety of public universities - even the more prestigious ones. The conclusion I would draw would be the dumber students not engaging in longer term thinking while the high income students will pursue the amenities because it is easy for him/her to afford it.

I'd say the majority would be of decent intelligence and of middle class means, which IMHO is the biggest group of future college students who would prefer to pursue the economical approach.
04-19-2017 11:04 AM
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Post: #36
RE: Sports venues are money losers
(04-18-2017 12:27 PM)miko33 Wrote:  The articles apply to baseball ball parks; however, it can easily be applied to stadium projects for FB and most likely other sporting venues too.

http://www.richmond.com/opinion/our-opin...af399.html

https://www.wsj.com/articles/new-ballpar...1491912002

The economic projections never pan out. How many universities screw themselves over trying to compete with the FB and BB factories who are only too happy to continue ratcheting up the costs. Out of all schools playing in the revenue sports conferences of FBS (and the main BB counterpart league), only 20 to 30 can actually afford our current levels. UMD is a mess. Rutgers is a mess. Cal-Berkeley is a mess. Vast majority of these schools playing at the highest levels are taking from the general funds to subsidize athletics.

Couple all this with the realities that 1) tuition costs continue to rise at rates higher than annual inflation, 2) states are funding public universities at lower levels than they have in decades and 3) people are wising up to false narrative that all college is good - no matter what degree choice you make.

I don't see how all of this is sustainable over the long term.

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04-19-2017 12:54 PM
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Post: #37
RE: Sports venues are money losers
(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:  
(04-18-2017 12:43 PM)Attackcoog Wrote:  Its probably not---but sports isn't really the reason for the issue. These schools have billion dollar budgets. The athletics budgets support much of their own costs with most G5's running deficits of 10-20 million. Most P5's are running athletic deficits of just a few million. Its like pointing to foreign aid in the US budget as the reason for our national debt. Like NoDak said, most stadiums that are responsibly built with a reasonable cost and a significant portion of the funds donated---those will work out fine. A situation like Colorado St is one where I'd be concerned. Overly high cost for a 30K stadium with most of it financed with debt. That situation could easily go bad if ticket sales go south after a poor season or two.

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.
(This post was last modified: 04-19-2017 03:45 PM by Frank the Tank.)
04-19-2017 03:44 PM
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Post: #38
RE: Sports venues are money losers
(04-19-2017 03:44 PM)Frank the Tank Wrote:  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.

This triggered the memory of a story. The most popular sports anchor in Arkansas is a guy from Boston who went to Arkansas State. Asked how a kid from Boston ended up at AState he said that he had visions of getting rich racing greyhounds but he wanted to be in TV so he searched for good RTV programs near a greyhound track and came up with AState.

Lost his shirt on greyhounds but built a nice career anyway.

Amenities can vary wildly. Used to work with a guy who went to the University of Arkansas because it was close to several good places to canoe and kayak.
04-19-2017 04:36 PM
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Captain Bearcat Offline
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Post: #39
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.
04-19-2017 05:08 PM
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Post: #40
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.

That totally depends upon your definition of "upper class". We aren't talking about the wealthiest here which actually are less than 5% of the population. I would think the group you are talking about has an adjusted gross in six figures which was once described as the Upper Middle Class. If so then I can buy your illustration. Lower middle class are those who work and live just above the poverty level. The middle middle class are those who earn an adjusted gross over 50,000 but under six figures, and everyone's classifications vary some on those ranges.
04-19-2017 05:14 PM
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