FC: Beaver Stadium renovation Phase 1 to be presented to BOT....
- Thread starter Midnighter
- Start date
Unless I've misunderstood, donations to the athletic department (NLC payments, endowed positions, gifts for specific purposes) are part of the Athletic Department "revenue". when the school talks about "athletics are self supporting" they absolutely are taking those donations into account as part of that brag.
And honestly I don't have any problem with that. But in regards to this specific item, that's why they need to actually get out there for fundraising and not be counting on direct revenue for football and other sports (ticket sales, concessions, TV, etc) to pay for this.
Yeah, that's a big increase.....I'm OUTMath (apologies to LionJim):
PSU Brings in roughly $50 million per year in football ticket/seat license revenue.
So, assuming:
A $700 million spend on renovations, financed by debt
A 5% annual interest rate on the debt
The number of seats in the stadium remains the same (that's certainly not a sure thing), and that the stadium would continue to sell out every game (more or less, ie: whatever they do now)
In order to pay off that debt over 25 years, the average ticket/seat license charge, just to account for that new debt, would have to immediately increase by.... 100%. (Along with, of course, the normal annual ticket increases over time)
To pay it off over 30 years, would have to have an immediate increase of just over 90%.
At current long-term debt rates (which are still relatively low, and assuming PSU's bond issue would be looked on very favorably in the markets) of around 3.5%, the required price increase would be roughly 80%.
And that would assume no other significant CapX spends would be required over the next 25-30 years.
Bottom Line, If PSU ICA has to pay for it themselves - not funded by Pennies from Heaven, Donations, or Tuition Revenue:
Requires roughly doubling average price per ticket - with no negative impact on the market (fan willingness to pay) - for the next 30 years
(Lion Jim can check the math)
Absolutely.
FWIW, I did include those seat license fees/NLC stuff in the revenue figure (because it is revenue for ICA). It typically is broken down as two separate items in the financials (as it should be, IMO), but I combined them together here.
But not endowment giving (which is not "revenue" - though the annual kick off from the accumulated endowment is)
Pro tip for you: you better vote for this, else you're the next alumni trustee election casualty.Math (apologies to LionJim):
PSU Brings in roughly $50 million per year in football ticket/seat license revenue.
So, assuming:
A $700 million spend on renovations, financed by debt
A 5% annual interest rate on the debt
The number of seats in the stadium remains the same (that's certainly not a sure thing), and that the stadium would continue to sell out every game (more or less, ie: whatever they do now)
In order to pay off that debt over 25 years, the average ticket/seat license charge, just to account for that new debt, would have to immediately increase by.... 100%. (Along with, of course, the normal annual ticket increases over time)
To pay it off over 30 years, would have to have an immediate increase of just over 90%.
At current long-term debt rates (which are still relatively low, and assuming PSU's bond issue would be looked on very favorably in the markets) of around 3.5%, the required price increase would be roughly 80%.
And that would assume no other significant CapX spends would be required over the next 25-30 years.
Bottom Line, If PSU ICA has to pay for it themselves - not funded by Pennies from Heaven, Donations, or Tuition Revenue:
Requires roughly doubling average price per ticket - with no negative impact on the market (fan willingness to pay) - for the next 30 years
(Lion Jim can check the math
Not to speak for Barry, but from what I’ve seen, he votes for what he believes is best for PSU, after having done ample research on the financial impact and alternatives (including the cost of doing nothing). Furthermore, he isn’t swayed by “threats”.
Depending on what the numbers look like being a casualty might not be a bad thing. Some might even consider being proactive in that regard.
I heard there might be a casino moving into the borough.Math (apologies to LionJim):
PSU Brings in roughly $50 million per year in football ticket/seat license revenue.
So, assuming:
A $700 million spend on renovations, financed by debt
A 5% annual interest rate on the debt
The number of seats in the stadium remains the same (that's certainly not a sure thing), and that the stadium would continue to sell out every game (more or less, ie: whatever they do now)
In order to pay off that debt over 25 years, the average ticket/seat license charge, just to account for that new debt, would have to immediately increase by.... 100%. (Along with, of course, the normal annual ticket increases over time)
To pay it off over 30 years, would have to have an immediate increase of just over 90%.
At current long-term debt rates (which are still relatively low, and assuming PSU's bond issue would be looked on very favorably in the markets) of around 3.5%, the required price increase would be roughly 80%.
And that would assume no other significant CapX spends would be required over the next 25-30 years.
Bottom Line, If PSU ICA has to pay for it themselves - not funded by Pennies from Heaven, Donations, or Tuition Revenue:
Requires roughly doubling average price per ticket - with no negative impact on the market (fan willingness to pay) - for the next 30 years
(Lion Jim can check the math
Hey, just imagine how Bally’s /Ira can leverage this. Roulette to see where your seat is and what you’ll pay!
That is why they are not borrowing $700M upfront. Need to have fund raising program for the stadium.Math (apologies to LionJim):
PSU Brings in roughly $50 million per year in football ticket/seat license revenue.
So, assuming:
A $700 million spend on renovations, financed by debt
A 5% annual interest rate on the debt
The number of seats in the stadium remains the same (that's certainly not a sure thing), and that the stadium would continue to sell out every game (more or less, ie: whatever they do now)
In order to pay off that debt over 25 years, the average ticket/seat license charge, just to account for that new debt, would have to immediately increase by.... 100%. (Along with, of course, the normal annual ticket increases over time)
To pay it off over 30 years, would have to have an immediate increase of just over 90%.
At current long-term debt rates (which are still relatively low, and assuming PSU's bond issue would be looked on very favorably in the markets) of around 3.5%, the required price increase would be roughly 80%.
And that would assume no other significant CapX spends would be required over the next 25-30 years.
Bottom Line, If PSU ICA has to pay for it themselves - not funded by Pennies from Heaven, Donations, or Tuition Revenue:
Requires roughly doubling average price per ticket - with no negative impact on the market (fan willingness to pay) - for the next 30 years
(Lion Jim can check the math
Barry doesn't have solutions. Only criticisms.
Solutions for $700mm? LMAO. Okay, since stealing is out of the question PSU is left with beg and borrow.
However PSU eventually addresses the situation, they will be compelled to do so from the position of a University with $3.5+ Billion of long-term debt ALREADY on the books. That's just the reality of where we have placed ourselves.
As opposed to a University with under a $1 Billion of existing long-term debt (which was the case just a few years ago)
Public Reports | Office of the Corporate Controller (psu.edu)
Whatever the reasons why, that changes the dynamics moving forward - considerably.
That old axiom - the bane of politicians, pontificators, and idiots everywhere - comes to mind: You can only spend the same dollar once.
As opposed to a University with under a $1 Billion of existing long-term debt (which was the case just a few years ago)
Public Reports | Office of the Corporate Controller (psu.edu)
Whatever the reasons why, that changes the dynamics moving forward - considerably.
That old axiom - the bane of politicians, pontificators, and idiots everywhere - comes to mind: You can only spend the same dollar once.
Add to that picture a nine-figure annual operating deficit.
Math (apologies to LionJim):
PSU Brings in roughly $50 million per year in football ticket/seat license revenue.
So, assuming:
A $700 million spend on renovations, financed by debt
A 5% annual interest rate on the debt
The number of seats in the stadium remains the same (that's certainly not a sure thing), and that the stadium would continue to sell out every game (more or less, ie: whatever they do now)
In order to pay off that debt over 25 years, the average ticket/seat license charge, just to account for that new debt, would have to immediately increase by.... 100%. (Along with, of course, the normal annual ticket increases over time)
To pay it off over 30 years, would have to have an immediate increase of just over 90%.
At current long-term debt rates (which are still relatively low, and assuming PSU's bond issue would be looked on very favorably in the markets) of around 3.5%, the required price increase would be roughly 80%.
And that would assume no other significant CapX spends would be required over the next 25-30 years.
Bottom Line, If PSU ICA has to pay for it themselves - not funded by Pennies from Heaven, Donations, or Tuition Revenue:
Requires roughly doubling average price per ticket - with no negative impact on the market (fan willingness to pay) - for the next 30 years
(Lion Jim can check the math
You have to spend money to spend money.
Don't forget brick sales. All the best playgrounds are funded that way.
To be clear, he doesn't even know if this 9-10 figure unfunded project is even coming up for a vote in a mere two weeks. Talk about dysfunctional.
Gun raffles are always a money maker too. They could hold a big event in the club lounge.
In all fairness, he ran on a watchdog platform so I guess that's what should be expected.
if you're offering to pay for it, I don't imagine that Barry would be opposed.
If placed in a position of responsibility for the potential expenditure of upwards of $1 BILLION (25% of the gross annual revenues for an entity), only an extraordinarily obtuse and unrighteous steward would be "for or against" such a proposal, without first, at a minimum:
- Knowing and evaluating what Mission is being served by the expenditure - and what its priorities and needs are.
- To what degree the expenditure would further and/or hamper that mission.
- What alternatives could be considered to further that mission. What would be the pros/cons/relative efficiencies of each alternative.
- Evaluating the revenue streams and expense streams associated with each alternative.
- Evaluating what meaningful tangential implications - if any - each alternative might catalyze
Etc.
I have many (MANY) questions regarding this proposal, and many other similar proposals - as should anyone placed in a position of responsibility.
I will hope and expect to have meaningful, honest, robust, and forthright discussions surrounding those questions and those uncertainties.
Time will tell.
But only a very, very poor "steward" would come to conclusions, without assuring that they have maximized their ability to make informed decisions.
Don't the stakeholders of the entity deserve AT LEAST that from their proxies?
- Knowing and evaluating what Mission is being served by the expenditure - and what its priorities and needs are.
- To what degree the expenditure would further and/or hamper that mission.
- What alternatives could be considered to further that mission. What would be the pros/cons/relative efficiencies of each alternative.
- Evaluating the revenue streams and expense streams associated with each alternative.
- Evaluating what meaningful tangential implications - if any - each alternative might catalyze
Etc.
I have many (MANY) questions regarding this proposal, and many other similar proposals - as should anyone placed in a position of responsibility.
I will hope and expect to have meaningful, honest, robust, and forthright discussions surrounding those questions and those uncertainties.
Time will tell.
But only a very, very poor "steward" would come to conclusions, without assuring that they have maximized their ability to make informed decisions.
Don't the stakeholders of the entity deserve AT LEAST that from their proxies?
So assuming all of your concerns are addressed, or at least a substantial portion of them, you would be willing to support these efforts. Is that correct? The other shoe here, is that this is only the first piece of the renovation. Shouldn’t we be informed about the whole enchilada? Approving one piece without knowing the costs of the other pieces doesn’t make sense. We’re obviously not going to stop with a half renovated stadium.
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In fairness, every BOT member has a fiduciary responsibility to do what he did. Every ******* one.
When the cost of tickets doubles in the next 3-7 years, and no upgrades are made, then what?
How long has it been since the ticket price was 50% less than it is today?
How long has it been since the ticket price was 50% less than it is today?
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