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Meanwhile, across the Bay... - yvonne - 04-18-2012

Cal's Football-Stadium Gamble
Amid a Costly Renovation, the School Is Short of Its Funding Goal; Tapping Campus Funds?

http://online.wsj.com/article/SB10001424052702304432704577350214257041598.html

The 59er Insider partisans call this a hit piece, saying it unfairly emphasizes information from longtime football critic Brian Barsky, and does not appropriately quote the athletic director.

Interesting pieces from the article:

Quote:But three years into the fund-raising effort, a projected $270 million from the sale of seats has failed to materialize. At the end of December, the school had collected only $31 million in the first three years of the sale. Now it has become clear that the university will have to borrow the vast majority of the money.

Quote:The stadium situation comes at a time of financial anxiety on campus. After the state legislature last year slashed $650 million from the University of California system's previously $3-billion budget, tuition at UC schools rose 17% for in-state students and 5% for nonresident ones, prompting student protests and sit-ins on the Berkeley campus. With California already leading the nation in tuition increases, the UC system has said that annual tuition spikes could range from 8% to 16% over the next four years.

Also controversial is a plan to open the gates to more nonresident students—who pay higher tuition. At Berkeley, the proportion of undergraduate students who pay nonresident tuition is 16%. The school said its goal is to increase that figure to 20%.

Quote:The total bonded debt for the project, including the training center, will be $447 million. That's apparently an unprecedented amount of borrowing for a college-sports project, far above the $220 million that Minnesota borrowed to build a new stadium in 2009, the $200 million that Washington has borrowed for its stadium renovation and the $148 million that Michigan took out to add luxury seats that opened in 2010.

Last fall, I pointed out here that that a large number of ESP (seat licenses) had not sold. This article indicates that that continues to be the case. It also indicates that UCB students and California taxpayers will be on the hook for it. It also means that fewer California residents will be able to attend the state university. Many Californians are already looking to send their children to neighboring states under the Western University Exchange (http://www.wiche.edu/wue), which enables high school students to attend member institutions at rates lower than the traditional out of state rates.


Re: Meanwhile, across the Bay... - fullmetal - 04-18-2012

At what point do kal partisans acknowledge their own little inconvenient truth?

Re: Meanwhile, across the Bay... - Farm93 - 04-18-2012

Memorial Stadium sits on a fault line and was no longer to code, so I can give the UC a pass on needing to do something.

However, the new stadium and the AD extras always seemed too expensive to me for an AD, a University and a State that were deep in chronic budget problems.

The need to compete for top talent with the benefits and goodies has pushed many towns and cities into severe financial hardship in California, and yet those public officials continue to keep their jobs.  The UC AD's choices seem suspect, but I don't think this particular choice will be too difficult for the system to absorb.

But in four or five years when Stanford types go to a Big Game and walk through the campus with cracking sidewalks and fading campus signage, just remember that those maintenance people probably were let go to cover the debt payments from a series of expensive projects, like the stadium.  ;)

Re: Meanwhile, across the Bay... - OutsiderFan - 04-18-2012

Sorry if I am a broken record, but every California citizen should have been outraged when Barbour, et. al. let Tosh Lupoi go to Washington at such a delicate time for the football program. Let me explain...

Barsky is a broken record, academic blowhard, with no understanding of or appreciation for just how valuable an asset well-performing football and men's basketball programs can be for the school.  He is a product of a tax payer funded, no accountability bureaucracy with a sense of entitlement, and no concept of how college sports properties are only going to become more valuable as live programming and sports properties become the primary platforms on which to deliver advertising media. 

ESP seats were dreamed up as a way of financing the CMS renovation.  They might have worked at some other school, but California is a temple to mediocrity and operates with no accountability to anything or anyone.  The original plan was to make donors pay up-front for their seats, but the market reality was nobody was going to make a commitment to give their money to an AD who oversees 5-7 or 7-5 programs and has exactly zero Rose Bowl appearances in 50+ years.  So, California decided to make the seats payable annually.  People can lock in their seats, but they have no obligation to pay more than a year at a time. 

One would think the UC leadership might recognize a cause-effect relationship between the lousy performance of the football program and the lack of ESP-based funding.  One would think someone at the UC executive branch would look at the amount of money potentially poised to be saddled on the backs of California tax payers, and take pro-active action to make sure the conditions were in place to make the Cal football program perform at a level that would increase ESP commitments.  Of course, one would be wrong. 

Recruiting is the lifeblood of any program.  California was blessed with one of the best recruiters in the country, a guy poised to stockpile California's roster with talent never before seen in Berkeley.  The guy was even an alum who grew up near the campus.  Yet the very first time someone from another school tried to hire him away, Cal let him get away, to a conference and division rival no less.  It's bad enough that Tedsel was given his contract extension with no buyout the school could afford in the event he turned in the types of seasons that would make the ESP CMS renovation financing plan a failure, but letting the ace recruiter on the West Coast go just absolutely validates why nobody should trust California's AD with its money.  They could not have done a better job to ensure the failure of the ESP plan than if they junked it when Lupoi left and just said "California tax payers, you got it covered."

Making matters worse, alums are so indifferent to whether California wins in football because the team has almost always underperformed during their years on campus, that there is never any pressure put on the administrators to win.

Tedsel, Barbour, the chancellor, the regents, all need to be told that they either come up with the revenues to pay for the stadium renovations, or it comes out of their personal hides, the university budget, and/or the UC system's budget.  Tell UCSF they can't hire a promising young doctor because Cal let Tosh Lupoi go. Tell UC Davis they can't buy a new microscope technology because California's football team went 5-7 this year and season ticket sales have dried up.  Unless California's AD, school leadership, and UC regents are held accountable for their performance, there is no chance anything is every going to change.






Re: Meanwhile, across the Bay... - yvonne - 04-18-2012

The article does point out that 70 percent of the costs were for seismic upgrade. That couldn't have been cheap for a stadium that sits atop an active fault.

I fail to see the strong correlation you're tying between "every California citizen," and losing Lupoi, OutsiderFan. Sure, he was a great recruiter, but a lot of that stemmed from being able to be a pal with the kids. That would seem a little strange five years from now. I guess that you're trying to say that because he pulled in good recruits, the team would be more likely to win, and the wins would translate into enough ticket buyers to pay for the stadium. Pinning all that on an assistant coach seems a bit far-fetched. Moreover, no matter how good the players are, the players have to be coached to produce. Looking at the number of former 59ers in the pros, it appears the UC-B has had plenty of talent, but having those players has not resulted in championships. So, I really can't see how you're tying an ill-financed stadium to the loss of a single coach.

Cal had to build a stadium to keep up with the arms race in football. They facilities they had were decrepit. Now, every Pac-12 team except Colorado and SC will have a stadium that has been upgraded in the last 10-15 years. Most, including Stanford, will have upgrades to other football facilities. (An Arrillaga Center upgrade has been approved.) The 59ers had to upgrade. The problem is in the scope and the financial planning around financing it.



Re: Meanwhile, across the Bay... - LuckE2Bhere - 04-18-2012

Did they have to build on the fault?  Gotta believe that there were less expensive options somewhere else in the vicinity, but when "someone else is paying" (i.e., an ever-shrinking pool of taxpayers), why not write a blank check, in the name of tradition?!?  :'(

Re: Meanwhile, across the Bay... - yvonne - 04-18-2012

Apparently, it's on the National Register of Historical Buildings, so it could not be razed.

Re: Meanwhile, across the Bay... - OutsiderFan - 04-18-2012

(04-18-2012, 09:22 AM)Yvonne link Wrote:The article does point out that 70 percent of the costs were for seismic upgrade. That couldn't have been cheap for a stadium that sits atop an active fault.

I fail to see the strong correlation you're tying between "every California citizen," and losing Lupoi, OutsiderFan. Sure, he was a great recruiter, but a lot of that stemmed from being able to be a pal with the kids. That would seem a little strange five years from now. I guess that you're trying to say that because he pulled in good recruits, the team would be more likely to win, and the wins would translate into enough ticket buyers to pay for the stadium. Pinning all that on an assistant coach seems a bit far-fetched. Moreover, no matter how good the players are, the players have to be coached to produce. Looking at the number of former 59ers in the pros, it appears the UC-B has had plenty of talent, but having those players has not resulted in championships. So, I really can't see how you're tying an ill-financed stadium to the loss of a single coach.

The School near Oakland had to build a stadium to keep up with the arms race in football. They facilities they had were decrepit. Now, every Pac-12 team except Colorado and SC will have a stadium that has been upgraded in the last 10-15 years. Most, including Stanford, will have upgrades to other football facilities. (An Arrillaga Center upgrade has been approved.) The 59ers had to upgrade. The problem is in the scope and the financial planning around financing it.

Yvonne, Lupoi leaving isn't the reason, it is both another example of and a metaphor for why California is in the situation it is in.  If the school or alums cared about winning 50 years ago, the stadium might have been re-done years ago.  It could have been easily funded by donors.  The Lupoi situation is just one in a long list of symptoms of a much greater disease.  Had California kept Lupoi and cashiered Tedsel, the program would have some life breathed in to it.  If it ever got a coach who could perform, and held him accountable for performing, donations would increase and more ESP commitments would happen.

Here's something to ponder.  Stanford razed its own historic stadium and built a new one in an attempt to make the football program stronger.  The objective was to get it done ASAP, and efficiently.  At California, the CMS project is more about having a project to work on than it is about having a winning football team.  Someone above cited the proof.

The fact is 70% of the project cost went to retrofitting because the CMS renovation was more about being a cool engineering project than being a pragmatic and responsible expenditure.  It wasn't planned to be funded by taxpayers, but UC never put measures in place and held people accountable to make sure it never could become a tax payer liability. 

Another reality.  California's donor class and school brass were more concerned about "preserving the old CMS" because it was a memorial to WW1 vets than about being economically prudent.  The stadium should have been razed (I have to think there are ways to raze historical landmarks) and a new one built. Instead, UC decided to pay extra to maintain the old facade build on top of a strike-slip fault line (that will never stop moving and tearing the stadium apart.  It's sheer lunacy to do what UC allowed to happen.  They could have built a new stadium where Edwards Track Stadium is.  They could have built near Golden Gate Fields.  There were other options, all with drawbacks, but none that would be so costly.  Not one of the reasons had anything to do with improving the football program, because the primary goal is not to improve the football program.  Until California realizes that having the football program succeed is the objective, it never will.






Re: Meanwhile, across the Bay... - Farm93 - 04-18-2012

OutsiderFan,

Great points really.  From an "insider" point of view, I suspect.

As a Stanford fan living in California this subject is tricky.  I understand the UC at B wants to be competitive in the conference.  I am happy as a Stanford fan when reality misses those conference dominating aspirations over there.  So on the field performance and failure is easy for me to assess.

Off the field, I also understand that the UC at B needed a stadium.  I was always a bit annoyed that donors could not find funds in advance.  And yet other mega-state schools have used the same "We will pay later, honest" strategy.  This is one of the many reasons the college football is dominated by state schools since private institutions can't play that game.  Still, the sticker price of the project was stunning.

And yet, I can't divorce my Stanford concerns from my Cali concerns.  The Stanford fan in me thinks it is funny that UC at B needed so much money to complete a rather minor renovation and that it took so much time.  The whole project just assures me that UC at B AD is simply not in Stanford AD's league.  And yet, as a taxpayer, I think I am outraged that the UC at B even tries to complete programs like this.

The UCLA AD has amazing budget discipline, so it is possible.  UCLA does OK in football and amazingly well in athletics without a $500 million dollar stadium complex on campus.  Is it really too much to ask the UC at B students to ride BART for three or four stations and attend games in Oakland?  Given the stress and strain to the entire state and the UC system that rent at Oakland would feel like a real shared sacrifice type move.  But then, I can't tell if that is my Stanford desire to crush UC at B mindset or if that is my taxpayer seeing the State need to get more creative at cutting costs.

Oh well, what is clear is that Big Game 2014 tickets will probably run $150 per seat.

Re: Meanwhile, across the Bay... - OutsiderFan - 04-18-2012

Farm93,

You hit on a great point.  California should have just rented out Oakland Coliseum.  The university, alums, and community don't support the program enough to warrant California having its own stadium if it can't pay for it.

Build up the program, the fan base, and get to the point there is demand for a new on-campus stadium.  Create an upswell of support for a new stadium and then get it built, with someone and/or some institution to fund it.

If California were to fold the football program, it would happily continue with the stadium renovation because it's such a cool project.  And it will be happy to continue being an also ran Pac-12 football program with shiny new facilities, potentially paid for by California tax payers. 

Re: Meanwhile, across the Bay... - terry - 04-18-2012

Yes, UCBerkeley needed to do something about the stadium. But it didn't need to take on the biggest stadium construction debt ever in the history of college athletics. It didn't need to spend almost $500 million. And it didn't need to undertake that project and incur that debt WITHOUT HAVING THE MONEY, sticking the taxpayers with the bill. That is an outrage. Sandy Barbour has bungled the finances of that athletic department so badly that it's a miracle she still has a job.

OutsiderFan -- I don't think the issue here is that the university has refused to allow the football program to be successful. UCBerkeley's football program under JeffTedford has been the most successful football program they've had in over 50 years. The last 10 years have been a high point for UCBerkeley football in terms of the W/L record. UCBerkeley has been winning consistently. If the success of the last 10 years isn't enough to generate support for the program, it's unreasonable to think UCBerkeley will ever maintain enough success to generate support for the program.

And come on, don't tell me that the stadium seat licenses are a failure because Tosh Lupoi left. That's just silly.

Re: Meanwhile, across the Bay... - OutsiderFan - 04-18-2012

(04-18-2012, 07:13 PM)terry link Wrote:And come on, don't tell me that the stadium seat licenses are a failure because Tosh Lupoi left. That's just silly.

I said Lupoi leaving is symptomatic of a greater disease.  If Lupoi was retained, it would have made a statement that the program is committed to winning, which would result in more support.  I know of many, many California alums/fans that won't spend another dime on California's football program until major changes are made.  Lupoi leaving was a last straw for many people.

Good Stuff... - 71Bear - 04-19-2012

Thoughtful posts re: a situation that has gone from bad to worse...

I am in the minority of California partisans because I believe that Barbour has totally botched the entire situation.  Let's review the biggest problem, shall we...

An $8 million annual deficit - unconscionable during a time when tuition is being raised to levels none of ever dreamed of  (heck, I paid $100/quarter, with a $20 discount for attending the summer quarter and received an unparalelled education both inside and outside the classroom).

Promises have been made to cut the deficit to $5 million by 2014 but I am very skeptical.

NO, I repeat, NO deficit should be permitted.  The department should be entirely selfsustaining.  Zero subsidies should be allowed.

I am a strong advocate for slashing as many sports as necessary to eliminate the deficit.  Whatever the NCAA minimum is - that is what should be funded (nothing more).  I sugget football, men's and women's hoops, women's volleyball and aquatic sports.  All this nonsense about self-funding baseball, etc. is just another smoke screen.  Baseball should have been allowed to die, along with the other sports that were on the block last year.

The notion of a full array of sports is ludicrous - few, if any, public schools offer the number of sports that are offered at my Alma Mater.

I think the WSJ article was poorly written because of the failure to conduct basic research but the essence of the article was accurate - my Alma Mater has lost its way...

As for the Lupoi comment...  I am glad that he left. and I blame JT for allowing Lupoi to have the level of influence that he had over recruiting.  No good manager ever allows an employee to possess that kind of leverage.  JT dropped the ball.  Period.  As for Lupoi, he essentially blackmailed the program with his demands.  There was no way he could have been satisfied.  You can't have a guy like that working for you.  Now he is Washington's problem...

Disclaimer:  I gave up my football season tickets (and my string of 50 straight Big Games) and withdrew all financial support of the athletic program two years ago because I was disgusted with the direction Barbour was taking the program. 



Re: Good Stuff... - yvonne - 04-19-2012

(04-19-2012, 01:12 PM)71Bear link Wrote:I am a strong advocate for slashing as many sports as necessary to eliminate the deficit.  Whatever the NCAA minimum is - that is what should be funded (nothing more).  I sugget football, men's and women's hoops, women's volleyball and aquatic sports.  All this nonsense about self-funding baseball, etc. is just another smoke screen.  Baseball should have been allowed to die, along with the other sports that were on the block last year.

That was what UCLA did. Cutting the championship contending men's gymnastics program was extremely unpopular, and many fans railed against Title IX in the wake of the cutting, but the move has not hurt the strength of overall athletic program. I love the breadth of Stanford's athletic programs, but it's better to be good -- and profitable -- at a few things than mediocre at many.

Quote:As for the Lupoi comment...  I am glad that he left. and I blame JT for allowing Lupoi to have the level of influence that he had over recruiting.  No good manager ever allows an employee to possess that kind of leverage.  JT dropped the ball.  Period.  As for Lupoi, he essentially blackmailed the program with his demands.  There was no way he could have been satisfied.  You can't have a guy like that working for you.  Now he is Washington's problem...

I agree that it was poor management to allow a non-coordinator to have such leverage over the program's recruiting. However, I disagree with your perception of Lupoi. Many kal partisans viewed TL as this sort of saintly figure who was doing all he could for alma mater dear, almost to the point that I wonder whether they thought he would work for free. Then when he left, he became this cutthroat über villain. The truth is somewhere in between. He was a guy making a career choice. It was a matter of every man having his price. Washington threw out enough money to make it worthwhile, and he probably felt his career mobility would be hampered by staying too long in one place.

Quote:Disclaimer:  I gave up my football season tickets (and my string of 50 straight Big Games) and withdrew all financial support of the athletic program two years ago because I was disgusted with the direction Barbour was taking the program.

I've heard that song from other long time kal fans. It's a shame. Seriously.

Re: Meanwhile, across the Bay... - yvonne - 04-20-2012

Wilner wrote this story that follows the WSJ piece.

A UC Berkeley vice chancellor tries to downplay the impact, but it actually comes out looking even worse!

Quote:But John Wilton, Cal's vice chancellor for administration and finance, said that even in a worst-case scenario -- in which Cal sells just 70 percent of the premium seats before its June 2013 deadline -- the fund established to service the bonded debt would not run out of money until 2038.
"We have a long time to take action,'' he said, adding that university officials "will do everything we can'' to avoid using state money.

What's really a head scratcher is that UC officials based their plans on an expectation of raising three to five times as much as Texas and Michigan did for similar projects.

Re: Meanwhile, across the Bay... - Farm93 - 04-20-2012

It is odd accounting, I wish I could get away with that when requesting funds for projects with my employer.

$35 million seems to have been raised to date.  Many of those dollars are in first installment type payments.  Lump the projected future payments into the total and the expected value climbs to $145 million.  $145 million is <<< $447 million, but even $145 million is not really there.  The AD's leadership seems to believe that people will see the stadium and realize that rather than sitting at the 35 yard line without a PSL they will want to saddle themselves with a seat license or a seat license payment plan and sit at the 40 yard line.

I suspect, those at the 35 yard line, or even corner end zone, will be happy to save $80,000 and will not subscribe as the UC projects.  Perhaps they will realize that they now need that money to pay for their children's UC or CSU tuition!!

But I bet it will get worse.  Some of those that signed up for the PSLs likely feared they could be shutout of a soldout stadium if they did not sign up.  Now that reality is clearly short of those fears, and the UC at B does not appear to be on a multi-year BCS run, many with pay as you go fees will realize that they can slide over 5 yards and save big money.

What happens exactly if $35 million does not turn into $145 million, but only $50 million.  And what happens exactly if the rest of the fans realize that they don't need to buy "premium" seats to get access to the games.  "Will do everything we can" include raising ticket prices for all seats by 50+% or will the option become to create a special student fee or will the plan be to take UC at B general funds and force tuition increases or will the plan be to simply beg the state for a bailout.

In good news...at least this phase of the multi-phase project is on schedule and on budget.

Re: Meanwhile, across the Bay... - OutsiderFan - 04-20-2012

Wilner didn't go into specifics, like mentioning letting Lupoi go, but the conclusion is the same:  California isn't going to raise the money it needs with a mediocre football program, and it takes great talent to win.  Making the Spring Game a real game to increase program interest might have worked a little bit had Tedsel not raised his giant middle finger to Cal fans by closing all Spring practices, including to the media.

People like 71Bear can get all righteous over what a bad guy Lupoi is and how California is better off without him, but just like California doesn't have the luxury of having its own stadium if it can't pay for it, neither does California have the luxury of letting guys like Lupoi go, no matter what a douche he might be.  When you are taking public funds to pay for a stadium that hosts a sport the university and its constituency hardly cares about, you have no right whatsoever to be picky.  If someone can deliver results and produce value, you keep him.  When your debt is paid off, then you can hirer the model citizen.

Like it or not, Lupoi was the key to pushing California's football program to a level it could generate the demand to pay off its debt so it doesn't come off the backs of tax payers.  Might another guy be able to recruit like Lupoi?  Maybe.  But given how rare elite recruiters are, and given Lupoi was a California alum, it is highly doubtful.  Might a new coach be able to create more demand for ESP  commitments?  Yes.  But Cal doesn't have the base of support to push for and pay a proven, elite coach to excite anyone. 

On the ESP issue itself, you would have thought California's leadership might have learned a thing or two from the Raiders' PSL fiasco.  Thankfully for the Bares, the club seating is on the side opposite the TV cameras see.  They won't be able to see all the empty seats at the 50 yd line as a result of the fact California can't sell enough ESP seats, so they remain empty because California can't sell them on a per game basis and still maintain pricing integrity for the poor saps who buy ESP seats. 

They actually did this at AT&T park.  They sold seats to donors for 2x that they later sold to non-donors for x.  It's amazing how truly incompetent the people in California's AD are.  They are so bad, one might conclude there is willful intent to have it this way.


Re: Meanwhile, across the Bay... - Roberton3 - 04-20-2012

You're ignoring the political cost of keeping Lupoi.  In addition to the brobdingnagian tuition increases, the UC system has also implemented a lot of budget cuts that have really hurt faculty and staff.  So the students and parents are feeling like they're getting totally screwed financially, the faculty and staff are feeling like they're getting totally screwed financially -- and in that atmosphere, you're advocating giving a brobdingnagian raise to a total douchebag, when athletics is already losing money hand over fist?  Even if it were a great idea from a purely financial standpoint, you'll never get everyone else to believe that, so from the standpoint of university politics it would have been a disaster.

Re: Meanwhile, across the Bay... - 76lsjumb - 04-20-2012

I never realized it before, but OutsiderFan spelled backwards is...

Tosh Lupoi!  ;D

Re: Meanwhile, across the Bay... - OutsiderFan - 04-20-2012

(04-20-2012, 08:56 AM)Roberton3 link Wrote:You're ignoring the political cost of keeping Lupoi.  In addition to the of extremely large proportions tuition increases, the UC system has also implemented a lot of budget cuts that have really hurt faculty and staff.  So the students and parents are feeling like they're getting totally screwed financially, the faculty and staff are feeling like they're getting totally screwed financially -- and in that atmosphere, you're advocating giving a of extremely large proportions raise to a total douchebag, when athletics is already losing money hand over fist?  Even if it were a great idea from a purely financial standpoint, you'll never get everyone else to believe that, so from the standpoint of university politics it would have been a disaster.

It's not like Lupoi's salary would be coming from the state budget.  Private donors would have paid the cost, just like Tedsel's contract.  That said, your point is well-taken.