04-13-2015, 07:55 PM
BC,
It is accounting. But let's take the opposite view for a second.
In the coming years UCB's "Intercollegiate Expenses" will skyrocket. They will likely soar to become #1 in the Pac-12 on intercollegiate spending. Why? Because the debt payments on their excessive fault-line renovations will be part of their annual budget. Now, we can go back and forth about whether a stadium's debt payments should be included, does that mean that historic renovation excesses should be included? Does that really count?Â
I think one could argue that it is far more important to understand what a school is spending on the students than where the money is coming from. The Stanford AD has an operating budget of $110 million. I can assure you the incoming revenue from the golf course is not matching expenses 1 for 1. The VAST majority of the golf course revenue, an asset like the endowment, or the stadium, or the parking around the stadium, will go directly to funding the operations of intercollegiate athletics. In fact, more of the golf revenue drops cleanly to the bottom line than a lot of other traditional sources we likely would agree should count (concessions, parking, MBB gate, WBB gate, etc.)
If it feels better for some to say that is not "real" money then OK I guess. It may not be growing exponentially like TV revenue, but if I am a worker in the AD it is just as much a part of the budget as the MBB gate. Just a touch more reliable these days.
Same goes for IM fees. Some institutions have to rent parks for cross country meets or softball fields. They can't capture IM revenue because they don't have fields to spare. Here too, the IM money DAPER gets is cleanly falling directly to support DAPER. There are very, very few costs associated with capturing that IM revenue, and that revenue becomes available because of one of the most treasured assets of all, land.
I just struggle to understand how endowment assets are cool and should count, but land (golf courses) and land (fields) and facilities (stadiums), all assets too, should not count. THAT would seem to be odd accounting to include the revenue from one set of assets (investments) but not the other (land) in this notion of real intercollegiate revenue.
It is accounting. But let's take the opposite view for a second.
In the coming years UCB's "Intercollegiate Expenses" will skyrocket. They will likely soar to become #1 in the Pac-12 on intercollegiate spending. Why? Because the debt payments on their excessive fault-line renovations will be part of their annual budget. Now, we can go back and forth about whether a stadium's debt payments should be included, does that mean that historic renovation excesses should be included? Does that really count?Â
I think one could argue that it is far more important to understand what a school is spending on the students than where the money is coming from. The Stanford AD has an operating budget of $110 million. I can assure you the incoming revenue from the golf course is not matching expenses 1 for 1. The VAST majority of the golf course revenue, an asset like the endowment, or the stadium, or the parking around the stadium, will go directly to funding the operations of intercollegiate athletics. In fact, more of the golf revenue drops cleanly to the bottom line than a lot of other traditional sources we likely would agree should count (concessions, parking, MBB gate, WBB gate, etc.)
If it feels better for some to say that is not "real" money then OK I guess. It may not be growing exponentially like TV revenue, but if I am a worker in the AD it is just as much a part of the budget as the MBB gate. Just a touch more reliable these days.
Same goes for IM fees. Some institutions have to rent parks for cross country meets or softball fields. They can't capture IM revenue because they don't have fields to spare. Here too, the IM money DAPER gets is cleanly falling directly to support DAPER. There are very, very few costs associated with capturing that IM revenue, and that revenue becomes available because of one of the most treasured assets of all, land.
I just struggle to understand how endowment assets are cool and should count, but land (golf courses) and land (fields) and facilities (stadiums), all assets too, should not count. THAT would seem to be odd accounting to include the revenue from one set of assets (investments) but not the other (land) in this notion of real intercollegiate revenue.