SU BoT will consider request to save 11 sports - Printable Version
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RE: SU BoT will consider request to save 11 sports - BostonCard - 04-08-2021
While undoubtedly true (I work in healthcare where "costs" are a joke), and certainly money is fungible, in this particular case it would be harder to engage in clever accounting to make things look worse because we are talking about marginal costs, not costs averaged over the entire budget. Thus, you can't really shift fixed costs to count under the cut sports (or move revenue to other sports). Thus, the AD referred to "total incremental funding" not "total cost".
That being said, there is still room for some discussion. Scholarship funds are considered a "cost", but that is a cost that the AD is paying to the University, probably at the full cost of tuition, room, and board. But unless those scholarships are being replaced with revenue from full freight-paying students, then the University is actually coming out ahead in that transaction, since many non-athletes who come into Stanford are paying a subsidized rate. You'd really have to figure out what the average student winds up contributing to the University in terms of revenue to really calculate the cost of the scholarships.
BC
RE: SU BoT will consider request to save 11 sports - Goose - 04-08-2021
(04-08-2021, 04:11 PM)BostonCard Wrote: While undoubtedly true (I work in healthcare where "costs" are a joke), and certainly money is fungible, in this particular case it would be harder to engage in clever accounting to make things look worse because we are talking about marginal costs, not costs averaged over the entire budget. Thus, you can't really shift fixed costs to count under the cut sports (or move revenue to other sports). Thus, the AD referred to "total incremental funding" not "total cost".
Sure you can. You can do it any way you want if you don't give out the details of what the numbers mean and where they came from. You can take any fixed cost and ascribe whatever percentage you chose to each sport. Unless somebody knows that you did that, they have to assume you aren't "cheating". However, since you don't give out that kind of information, anything is possible. "Marginal Costs" are what the AD says they are. Honest? No. Easy to do? Yes, because you don't get audited.
RE: SU BoT will consider request to save 11 sports - BostonCard - 04-08-2021
(04-08-2021, 04:34 PM)Goose Wrote:(04-08-2021, 04:11 PM)BostonCard Wrote: While undoubtedly true (I work in healthcare where "costs" are a joke), and certainly money is fungible, in this particular case it would be harder to engage in clever accounting to make things look worse because we are talking about marginal costs, not costs averaged over the entire budget. Thus, you can't really shift fixed costs to count under the cut sports (or move revenue to other sports). Thus, the AD referred to "total incremental funding" not "total cost".
Sure you can. You can do it any way you want if you don't give out the details of what the numbers mean and where they came from. You can take any fixed cost and ascribe whatever percentage you chose to each sport. Unless somebody knows that you did that, they have to assume you aren't "cheating". However, since you don't give out that kind of information, anything is possible. "Marginal Costs" are what the AD says they are. Honest? No. Easy to do? Yes, because you don't get audited.
Unless you are suggesting that Stanford is outright lying, the only percentage of a fixed cost you can ascribe is 0% because by definition, fixed costs are not included in calculations of marginal or incremental costs.
BC
(04-08-2021, 04:06 PM)paloalto Wrote: From a common sense perspective about human nature, would an Athletic Director voluntarily propose slashing a number of sports? Most heads of bureaucracies want to increase the size of their empire. A smaller organization means less power and in the future possibly a corresponding cut in salary.
I heard a fourth-hand rumor some time ago there are admissions officers who don't like Olympic sports athletes from well-off families getting admitted to Stanford. The story I heard they would prefer to give those positions to students from disadvantaged and challenged backgrounds. I have doubts about the rumor and only bring it up to ask the question; Could there be forces at Stanford outside the athletic department who were advocating for the university going away from being a sports school? After a decision was made the AD would have no choice other than to jump on board or resign.
PA, I have heard the same (and it is not just admissions officers; there has always been a tension between people in the school's administration who relish our athletic achievements and those who tolerate it). I don't know whether it is "a reason", "the main reason" or "the only reason", but I am pretty sure that there are some people outside of the athletics department who want some additional flexibility in shaping the class that they can get from cutting the proportion of recruited athletes from about 12% of each entering class to about 9%, and who generally feel that athletics are at best a distraction from the core mission of the University. The Varsity Blues scandal gave ammunition to those forces (whether fair or not), as it became clear that some privileged families were using athletics as a vehicle to gain admission to Stanford, even if it wasn't unearned.
BC
RE: SU BoT will consider request to save 11 sports - winflop - 04-08-2021
My point about revenue declining was specific to P12N. Even if revenue was continuing to grow, expenses grew at a much faster rate, which is the basis for my argument of financial mismanagement.
Regarding costs, the estimate is $4.5M. According to the 36 Sports Strong website, "Cutting the 11 sports saves $6.5M per year, according to Department of Education filings and only $4.5M per year net of the more than $23M endowments several of the cut sports already had in place."
I struggle to understand how $23M in endowments covers $2M per year in costs. That's almost a 9% rate which is not sustainable. However, the University's argument that a $200M endowment is needed has an equally inexplicable basis. I'd say the number is around $100M.
I'm thinking about relocating my football seats to a section that doesn't require a Buck/Cardinal donation. The way the University and the AD has handled this is reprehensible.
RE: SU BoT will consider request to save 11 sports - BostonCard - 04-08-2021
What happens to the endowment for the cut sports. Does it get returned to the donors, or does it get re-allocated?
BC
RE: SU BoT will consider request to save 11 sports - fullmetal - 04-08-2021
(04-08-2021, 04:06 PM)paloalto Wrote: From a common sense perspective about human nature, would an Athletic Director voluntarily propose slashing a number of sports?
We know that Muir has historically proposed cutting sports as a first option when faced with any budget crisis.
RE: SU BoT will consider request to save 11 sports - winflop - 04-08-2021
(04-08-2021, 06:05 PM)BostonCard Wrote: What happens to the endowment for the cut sports. Does it get returned to the donors, or does it get re-allocated?
BC
Did the money go to the AD or was it just commitments?
RE: SU BoT will consider request to save 11 sports - akiddoc - 04-08-2021
(04-08-2021, 04:34 PM)Goose Wrote:(04-08-2021, 04:11 PM)BostonCard Wrote: While undoubtedly true (I work in healthcare where "costs" are a joke), and certainly money is fungible, in this particular case it would be harder to engage in clever accounting to make things look worse because we are talking about marginal costs, not costs averaged over the entire budget. Thus, you can't really shift fixed costs to count under the cut sports (or move revenue to other sports). Thus, the AD referred to "total incremental funding" not "total cost".
Sure you can. You can do it any way you want if you don't give out the details of what the numbers mean and where they came from. You can take any fixed cost and ascribe whatever percentage you chose to each sport. Unless somebody knows that you did that, they have to assume you aren't "cheating". However, since you don't give out that kind of information, anything is possible. "Marginal Costs" are what the AD says they are. Honest? No. Easy to do? Yes, because you don't get audited.
I've seen other universities do the same. Add on a bunch of fixed overhead and claim reinstatement would have to cover that cost. Happens frequently.
RE: SU BoT will consider request to save 11 sports - Goose - 04-08-2021
(04-08-2021, 07:31 PM)akiddoc Wrote:(04-08-2021, 04:34 PM)Goose Wrote:(04-08-2021, 04:11 PM)BostonCard Wrote: While undoubtedly true (I work in healthcare where "costs" are a joke), and certainly money is fungible, in this particular case it would be harder to engage in clever accounting to make things look worse because we are talking about marginal costs, not costs averaged over the entire budget. Thus, you can't really shift fixed costs to count under the cut sports (or move revenue to other sports). Thus, the AD referred to "total incremental funding" not "total cost".
Sure you can. You can do it any way you want if you don't give out the details of what the numbers mean and where they came from. You can take any fixed cost and ascribe whatever percentage you chose to each sport. Unless somebody knows that you did that, they have to assume you aren't "cheating". However, since you don't give out that kind of information, anything is possible. "Marginal Costs" are what the AD says they are. Honest? No. Easy to do? Yes, because you don't get audited.(04-08-2021, 04:47 PM)BostonCard Wrote: Unless you are suggesting that Stanford is outright lying, the only percentage of a fixed cost you can ascribe is 0% because by definition, fixed costs are not included in calculations of marginal or incremental costs.I've seen other universities do the same. Add on a bunch of fixed overhead and claim reinstatement would have to cover that cost. Happens frequently.
BC
Yes BC, I am suggesting that they are cooking the books. I am sure those involved would say they aren't lying, they are only "allocating costs". What is a direct cost and what is an indirect cost is often a matter of accounting policy, not reality. Companies that have CPFF contracts with the DOD have massive overhead costs that are arguably direct costs. They aren't lying, they are just configuring their accounting practices to their best advantage. In that case, the DOD can actually audit them, but it still happens big time. Nobody audits the ADs assertions about what crew actually costs. We can look at their claims and say "That seems way too high to me", but since we don't actually know where the numbers came from and can't verify them if we did, it is a "trust me" situation. I don't, I have seen how this works.
RE: SU BoT will consider request to save 11 sports - winflop - 04-08-2021
(04-08-2021, 08:49 PM)Goose Wrote:(04-08-2021, 07:31 PM)akiddoc Wrote:(04-08-2021, 04:34 PM)Goose Wrote:(04-08-2021, 04:11 PM)BostonCard Wrote: While undoubtedly true (I work in healthcare where "costs" are a joke), and certainly money is fungible, in this particular case it would be harder to engage in clever accounting to make things look worse because we are talking about marginal costs, not costs averaged over the entire budget. Thus, you can't really shift fixed costs to count under the cut sports (or move revenue to other sports). Thus, the AD referred to "total incremental funding" not "total cost".
Sure you can. You can do it any way you want if you don't give out the details of what the numbers mean and where they came from. You can take any fixed cost and ascribe whatever percentage you chose to each sport. Unless somebody knows that you did that, they have to assume you aren't "cheating". However, since you don't give out that kind of information, anything is possible. "Marginal Costs" are what the AD says they are. Honest? No. Easy to do? Yes, because you don't get audited.(04-08-2021, 04:47 PM)BostonCard Wrote: Unless you are suggesting that Stanford is outright lying, the only percentage of a fixed cost you can ascribe is 0% because by definition, fixed costs are not included in calculations of marginal or incremental costs.I've seen other universities do the same. Add on a bunch of fixed overhead and claim reinstatement would have to cover that cost. Happens frequently.
BC
Yes BC, I am suggesting that they are cooking the books. I am sure those involved would say they aren't lying, they are only "allocating costs". What is a direct cost and what is an indirect cost is often a matter of accounting policy, not reality. Companies that have CPFF contracts with the DOD have massive overhead costs that are arguably direct costs. They aren't lying, they are just configuring their accounting practices to their best advantage. In that case, the DOD can actually audit them, but it still happens big time. Nobody audits the ADs assertions about what crew actually costs. We can look at their claims and say "That seems way too high to me", but since we don't actually know where the numbers came from and can't verify them if we did, it is a "trust me" situation. I don't, I have seen how this works.
If the University is going to make this argument then they need to list the people who will be laid off outside of the programs themselves if these sports are cut. Otherwise it's a bunch of crap.
RE: SU BoT will consider request to save 11 sports - BostonCard - 04-08-2021
(04-08-2021, 07:15 PM)winflop Wrote:(04-08-2021, 06:05 PM)BostonCard Wrote: What happens to the endowment for the cut sports. Does it get returned to the donors, or does it get re-allocated?
BC
Did the money go to the AD or was it just commitments?
Based on the text you had quoted, the endowments were already "in place". My guess is that they get re-allocated, unless the gift was given with very significant restrictions that allowed the donor to claw back the money if it wasn't used as intended. I'm not a big enough donor to know or care, but I would guess that there is some way for the money to be reallocated if it cannot be used as it was originally intended.
BC
RE: SU BoT will consider request to save 11 sports - Goose - 04-08-2021
(04-08-2021, 09:10 PM)BostonCard Wrote: I'm not a big enough donor to know or care, but I would guess that there is some way for the money to be reallocated if it cannot be used as it was originally intended.Me neither, but I am absolutely positive the money can and will be "reallocated". Certainly the Stanford's original gift has been "reallocated" many times against the expressed wishes of the founding grant. I suspect in almost all cases the readers of this board endorsed the redirection of the University's funds. Why should this be any different?
BC
(04-08-2021, 08:52 PM)winflop Wrote: If the University is going to make this argument then they need to list the people who will be laid off outside of the programs themselves if these sports are cut. Otherwise it's a bunch of crap.I would suggest you don't hold your breath. We aren't going to get a full, verifiable accounting of what the costs of anything actually are. Even if we did, how can we verify that the numbers are accurate? It is a private university. They don't HAVE to tell us anything. Generally, they have historically done that very well.
RE: SU BoT will consider request to save 11 sports - BostonCard - 04-08-2021
I'm not so naive as to say that the data hasn't been manipulated to look as big as possible, or that the University is beyond reproach. Akiddoc's post reminds me that while I was at Stanford, the University was going through the infamous indirect cost scandal. However, incremental funding (which is similar but somewhat different than marginal cost) has a very specific meaning, and would exclude unrecoverable fixed costs. Since this was a carefully worded letter to the community, I doubt that it wasn't vetted internally (including by a lawyer) or that the word was included accidentally. Had they written "We have calculated that the total incremental funding needed to permanently sustain these 11 sports at a nationally competitive varsity level exceeds $200 million." I don't think that would have changed the reaction and it would have allowed them the latitude to inflate the required funding.
But I have no doubt that the University and AD found other ways to make that number sound scary. For example, in multiple places they talk about the sports being "in a position to achieve competitive excellence on the national level", so it is entirely possible (maybe likely) that they benchmarked against the costs incurred by the highest cost programs, possibly adjusted for cost of living in the Bay Area, to calculate the costs required to achieve competitive excellence on a national level.
BC
RE: SU BoT will consider request to save 11 sports - Griffins78 - 04-08-2021
Internal transfer costs for facilities, parking, security, etc can have a wide range that the AD can charge the 11 sports. That’s how I think they get to $200M
RE: SU BoT will consider request to save 11 sports - Goose - 04-08-2021
(04-08-2021, 09:27 PM)BostonCard Wrote: I'm not so naive as to say that the data hasn't been manipulated to look as big as possible, or that the University is beyond reproach. Akiddoc's post reminds me that while I was at Stanford, the University was going through the infamous indirect cost scandal. However, incremental funding (which is similar but somewhat different than marginal cost) has a very specific meaning, and would exclude unrecoverable fixed costs.BC, it has a specific meaning to you. To an accountant who is trying to produce a given result, it means what he wants it to mean. He can allocate a totally unrealistic percentage of a "fixed" cost to a given sport knowing full well that if that sport goes away there is no practical way to reduce that "fixed" cost. However, he can pretend that you can, and since nobody is going to be able to force him to even detail what those allocations may have been, let alone justify them, he is at no risk. Is it honest? Certainly not, but it is real easy to do.
BC
The infamous indirect cost scandal was never actually resolved, simply papered over. Stanford's overhead is still so monumental that it is a joke. However, expense reports are now audited to the point they have had to hire additional admins just to fill them out. At times people have to write a justification for why a lunch in the cafeteria of some hospital while on the road for the University should be an allowed expense. Glad to see such improvements.
RE: SU BoT will consider request to save 11 sports - fullmetal - 04-08-2021
Are all 25 "safe" sports fully endowed? I find it disingenuous for the AD to throw out a brobdingnagian number associated with the 11 sports cut and declare that it would take that much money to save those sports when I'm pretty sure not every sport is completely endowed.
RE: SU BoT will consider request to save 11 sports - BostonCard - 04-08-2021
(04-08-2021, 09:55 PM)fullmetal Wrote: Are all 25 "safe" sports fully endowed? I find it disingenuous for the AD to throw out a of immense proportions number associated with the 11 sports cut and declare that it would take that much money to save those sports when I'm pretty sure not every sport is completely endowed.
No, it is clear that they are not.
Quote:In fact, even after recognizing the full expense savings resulting from this decision, closing the remaining Athletics structural deficit and ensuring the continued success of our remaining 25 varsity sports will itself require garnering resources that exceed that amount ($200 million), and we are fully committed to that endeavor.
From the response that the AD gave marty, it sounds like the other sports will require raising $380 million.
Quote:We are very aware of the recommendations proposed by 36 Sports Strong and the gifts pledged to date for various sports. At the same time, we are also faced with the reality that the actual amount to permanently endow the 11 discontinued varsity sports is more than $200 million. And this does not include the $380 million in funding needed for the remaining 25 varsity programs to ensure their competitiveness on a national level. Despite Stanford’s tremendous success in past fundraising campaigns, this combined goal of $580 million for Athletics was deemed infeasible based on extensive analysis of the university’s fundraising prospects.
To the extent that it's an argument, it says "we think we may be able to raise $380 million that would allow us to operate 25 programs, but we don't think we can raise $580 million that would allow us to operate 36 programs."
BC
RE: SU BoT will consider request to save 11 sports - donkey687 - 04-08-2021
I have been saying for months now and everything the athletic department says is consistent with the simple explanation.
This is about money and concentrating resources in the highest priority sports.
Bernard believes that our 25 priority sports need to have budgets to compete with the biggest budgets at other schools. In order to match these big budgets at other schools, he believes we need to raise $380 million and we can't afford to support the 11 lower priority sports even though their budgets are smaller. In order to fund 36 sports at the highest level, an additional $200 million endowment is needed above the $380 million fundraising goal for the 25 high priority sports.
Bernard's logic is flawed and un-Stanford like for two reasons.
1) We do not need to spend at the highest levels in every sport to be competitive.
2) We do not need to be the #1 program in every sport. It is okay that our wrestling program is ranked 20th and only occasionally produces an All American. The wrestling program has value and those wrestlers still contribute to the student body. Harvard has 45 varsity sports. It is okay if some of our sports look more like Harvard than Ohio State. Harvard is more of a peer school than Ohio State and we are competing with Harvard for top student athletes in many of these cut sports. Football needs a big budget. Fencing doesn't.
RE: SU BoT will consider request to save 11 sports - akiddoc - 04-08-2021
Stanford can raise 580 million if they want to. They don't want to do that, and I can think of several reasons why. They have raised over a billion in the past, and that was before the advent of the super billionaire class of Stanford entrepreneurs that would love to put their names on something at Stanford.
RE: SU BoT will consider request to save 11 sports - BostonCard - 04-09-2021
(04-08-2021, 10:25 PM)donkey687 Wrote: Harvard has 45 varsity sports. It is okay if some of our sports look more like Harvard than Ohio State. Harvard is more of a peer school than Ohio State and we are competing with Harvard for top student athletes in many of these cut sports. Football needs a big budget. Fencing doesn't.
Harvard has also had to defend itself against a lawsuit alleging that it systematically discriminates against applicants of Asian descent, during which time it emerged that 43% of White admits to Harvard are legacies, athletes, on the "dean's interest list" or children of faculty and staff, 3/4 of whom probably would not have been admitted otherwise (https://tyleransom.github.io/research/legacyathlete.pdf). The combination of increased awareness of these facts, the Varsity Blues scandal, increased pressure to diversify the student body (especially in light of the George Floyd killing and subsequent nationwide reckoning) and decreased tolerance for disadvantaging Asian applicants are all at least as important as the cost savings. I know you think this squarely on Muir'sshoulders, but as you note, the numbers don't add up, the savings are trivial compared to the backlash, and independently raising the money has been turned down by the University, with the Provost responding to inquiries as to why raising the money wouldn't reverse the cuts with "I cannot give you the answers you want".
I agree with my pediatric colleague that Stanford could raise $580 million if it wanted to, and has done so in the past. They just don't want to do it to save these sports, which means they don't want the sports "saved".
BC