Hello There, Guest! (LoginRegister)

Thread Closed 
Sports venues are money losers
Author Message
miko33 Offline
Defender of Honesty and Integrity
*

Posts: 9,768
Joined: Mar 2010
Reputation: 394
I Root For: Alma Mater
Location:
Post: #1
Sports venues are money losers
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.
04-18-2017 12:27 PM
Find all posts by this user

NoDak Offline
Heisman
*

Posts: 5,320
Joined: Oct 2005
Reputation: 77
I Root For: UND
Location:
Post: #2
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.

If an arena or stadium is donated, it works. Long term debt for sports venues doesn't work.
04-18-2017 12:41 PM
Find all posts by this user
Attackcoog Offline
Hall of Famer
*

Posts: 22,446
Joined: Oct 2011
Reputation: 848
I Root For: Houston
Location:
Post: #3
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.

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.
(This post was last modified: 04-18-2017 12:49 PM by Attackcoog.)
04-18-2017 12:43 PM
Find all posts by this user
miko33 Offline
Defender of Honesty and Integrity
*

Posts: 9,768
Joined: Mar 2010
Reputation: 394
I Root For: Alma Mater
Location:
Post: #4
RE: Sports venues are money losers
I didn't look it up, but it seems like donated venues would be atypical for most schools at div1 (P5 and G5).
04-18-2017 01:04 PM
Find all posts by this user

arkstfan Away
Sorry folks
*

Posts: 20,112
Joined: Feb 2004
Reputation: 569
I Root For: Fresh Starts
Location:
Post: #5
RE: Sports venues are money losers
(04-18-2017 01:23 PM)MplsBison Wrote:  Didn't click on the links or read most of the OP.

Simple as this: much, much more to life then a G-D balance sheet. 07-coffee3

If balance sheets mattered a lot more schools would run in the black.

Pulaski County (Little Rock and neighbors) built Alltel Arena (now Verizon Arena) with very little debt. A short-term county-wide sales tax paid a big part of the cost and naming rights were significant for the time.

The arena located in the city of North Little Rock, produces sufficient income to cover operating expenses and upkeep but not a whole lot more.

In exchange for five years of sales tax we ended up with an amenity. It hosts a number of events that otherwise would not be available to the community. Has it increased tax collections enough to recover the cost? Probably not but the neighborhood park my kids used to play in hasn't been cost recovered either. The city owned golf course in my suburb that used to be private until it went broke has created a reasonably priced amenity that operates in the black until you figure the cost to acquire it but the alternative was the area becomes a subdivision and creates a flood issue in the next subdivision over and increases what the city has to spend to deal with water, sewer, fire protection, police protection, road upkeep, and trash collection, which isn't going to be recovered via taxation in a city with no city real property tax.

The local high school now has a golf team and two local privates have added golf as well. We came out OK even if the balance sheet doesn't prove it.
04-18-2017 02:08 PM
Find all posts by this user
Attackcoog Offline
Hall of Famer
*

Posts: 22,446
Joined: Oct 2011
Reputation: 848
I Root For: Houston
Location:
Post: #6
RE: Sports venues are money losers
(04-18-2017 02:08 PM)arkstfan Wrote:  
(04-18-2017 01:23 PM)MplsBison Wrote:  Didn't click on the links or read most of the OP.

Simple as this: much, much more to life then a G-D balance sheet. 07-coffee3

If balance sheets mattered a lot more schools would run in the black.

Pulaski County (Little Rock and neighbors) built Alltel Arena (now Verizon Arena) with very little debt. A short-term county-wide sales tax paid a big part of the cost and naming rights were significant for the time.

The arena located in the city of North Little Rock, produces sufficient income to cover operating expenses and upkeep but not a whole lot more.

In exchange for five years of sales tax we ended up with an amenity. It hosts a number of events that otherwise would not be available to the community. Has it increased tax collections enough to recover the cost? Probably not but the neighborhood park my kids used to play in hasn't been cost recovered either. The city owned golf course in my suburb that used to be private until it went broke has created a reasonably priced amenity that operates in the black until you figure the cost to acquire it but the alternative was the area becomes a subdivision and creates a flood issue in the next subdivision over and increases what the city has to spend to deal with water, sewer, fire protection, police protection, road upkeep, and trash collection, which isn't going to be recovered via taxation in a city with no city real property tax.

The local high school now has a golf team and two local privates have added golf as well. We came out OK even if the balance sheet doesn't prove it.

Exactly. A stadium is an amenity. At the college level, the stadium is part of the sports program which functions as both a student amenity and as the primary marketing arm of the university. So, if a G5 athletic department is "losing" 20 million---what would a traditional marketing department require to reach the same number of eyeballs, drive that level of donation, create the same number of impressions, while providing the student body with a comparable student amenity (ie--a number of crowd pleasing spectator events designed to attract students)? My guess is it would probably require at least that much money if not more.
(This post was last modified: 04-18-2017 03:20 PM by Attackcoog.)
04-18-2017 03:15 PM
Find all posts by this user
JRsec Offline
Super Moderator
*

Posts: 13,885
Joined: Mar 2012
Reputation: 700
I Root For: SEC
Location:
Post: #7
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.

It's not sustainable for all schools. And for those which can't sustain it you need to get out and concentrate on what you can afford.
04-18-2017 03:18 PM
Find all posts by this user

miko33 Offline
Defender of Honesty and Integrity
*

Posts: 9,768
Joined: Mar 2010
Reputation: 394
I Root For: Alma Mater
Location:
Post: #8
RE: Sports venues are money losers
(04-18-2017 03:18 PM)JRsec 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.

It's not sustainable for all schools. And for those which can't sustain it you need to get out and concentrate on what you can afford.

That won't deter most schools from pursuing it though. Who deserves the most blame in all this - the administrators at borderline schools that shouldn't be playing, or the fact that the system is set up to include too many schools at the top level? No doubt a significant number of schools in the existing P5 have no business being included when we're talking about the levels of commitment - financially - needed to compete.

I think the system is too inclusive based on the money we're discussing. Before you guys get your panties all wadded up, I'm including my school as one of the P5s that should not be competing financially on the levels of OSU, PSU, ND and Alabama.
04-18-2017 03:59 PM
Find all posts by this user
miko33 Offline
Defender of Honesty and Integrity
*

Posts: 9,768
Joined: Mar 2010
Reputation: 394
I Root For: Alma Mater
Location:
Post: #9
RE: Sports venues are money losers
Quote:It's not sustainable for all schools. And for those which can't sustain it you need to get out and concentrate on what you can afford.

Your quote should actually read: "It's not sustainable for most schools. And for those which can't sustain it you need to get out and concentrate on what you can afford.
04-18-2017 04:01 PM
Find all posts by this user
JRsec Offline
Super Moderator
*

Posts: 13,885
Joined: Mar 2012
Reputation: 700
I Root For: SEC
Location:
Post: #10
RE: Sports venues are money losers
(04-18-2017 03:59 PM)miko33 Wrote:  
(04-18-2017 03:18 PM)JRsec 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.

It's not sustainable for all schools. And for those which can't sustain it you need to get out and concentrate on what you can afford.

That won't deter most schools from pursuing it though. Who deserves the most blame in all this - the administrators at borderline schools that shouldn't be playing, or the fact that the system is set up to include too many schools at the top level? No doubt a significant number of schools in the existing P5 have no business being included when we're talking about the levels of commitment - financially - needed to compete.

I think the system is too inclusive based on the money we're discussing. Before you guys get your panties all wadded up, I'm including my school as one of the P5s that should not be competing financially on the levels of OSU, PSU, ND and Alabama.

Miko there might be 40 schools which can afford to compete at the highest level, maybe even fewer.

Right now the top school Texas grosses 180 million and of course puts most of that back into its sports. Consider that Georgia Tech managed just under 50 million last year and the distinction exceeds stark! I'd say there definitely needs to be an investment cutoff for a new upper tier let's say 90 million and up. Then there needs to be a cutoff for those with the investment and revenue levels that are in between 40 million and 80 million with the rest forming a third tier below the 40 million level.

What you would end up with is a much more competitive set of ranges and is somewhat more realistic.

That alone will take care of most of our realignment issues and perhaps it would reign in fan expectations while providing them with a realistic chance to win their strata.

But I guess that might occur when people quit buying cars they can't afford, or living in houses or subdivisions beyond their means, just so they can say "We're just as good as you are!" If you can't be happy being who you are then you are sucker for every dumb*** delusion and scheme that comes along.

It reminds me of a really old Beverly Hillbillies spawned joke from the 60's. A newly rich hillbilly family buys a house in the Hamptons. On a pretty Saturday afternoon their barefoot children wandered into the large yard of their neighbor and the son said to the neighbor, "Hey mister, we are just as good as you are. You have a 2 million dollar home and we have one. You have a yacht and we have one. You have a chauffeur and we have one too." The neighbor replied, "That's right son now go on back home." But the kid just stood there for a minute and then said, "Mister I think we're better than you!" The neighbor said, "I doubt that! How come you think so?" The kid replied, "We don't have no hillbillies living next to us!"

I find cars, home purchases, some clothes purchases, and college football ticket holders, especially tailgaters, generally fall into the same category.

Take care, JR
04-18-2017 04:20 PM
Find all posts by this user
Thread Closed 




User(s) browsing this thread: 1 Guest(s)


Copyright © 2002-2017 Collegiate Sports Nation Bulletin Board System (CSNbbs), All Rights Reserved.
CSNbbs is an independent fan site and is in no way affiliated to the NCAA or any of the schools and conferences it represents.
This site monetizes links. FTC Disclosure.
Powered By MyBB, © 2002-2017 MyBB Group.