This (h/t) is a pretty sobering assessment of bond-financed stadium expansions.
Attendance is declining across the board (“Even the University of Alabama, a perennial powerhouse playing in Monday’s national championship game, is reducing capacity in 101,821-seat Bryant-Denny Stadium in Tuscaloosa, White said.”), but spending on facilities continues at almost the same rate as ever.
About $3 billion of bond-financed college football stadium projects are underway or completed over the past five years, according to a Bond Buyer review. That’s down about $300 million from the height of the “stadium arms race” in 2013.
A report from Moody’s Investors Service five years ago found that on average, the athletic operating expenses of Division I universities had nearly doubled since 2004 compared to growth of 58% for total expenses. In that report, Moody’s itemized risk factors for college football, including the threats of lawsuits over head injuries, rising coaching salaries, the threat of disciplinary measures over recruiting and demands for player pay, among others.
What’s an athletic department to do? Why, that’s easy. Go upscale with the fan base and whore yourself out to Mickey.
Five years later, report author Dennis Gephardt, a Moody’s analyst, says that major colleges and universities have managed to maintain athletic revenues through sales of luxury boxes and premium seating along with lucrative television contracts, factors that make empty student seats a less urgent concern. Even the so-called Power Five Conferences — the Atlantic Coast Conference, the Big Ten, Big 12, Pac-12, and Southeastern Conference — have seen attendance fall in recent years.
How troubling are things getting? Take “even Tennessee” as your canary in the coal mine.
The University of Tennessee’s Board of Trustees approved a two-phase, $340 million renovation in November 2017. The work was to be completed by the start of the 2021 season, when Neyland celebrates its 100th year.
The $180 million first phase of the project was to be funded with bonds, fundraising, athletic department revenues and partnerships. Construction was to start this year, but Tennessee’s new director of athletics hit pause on the project.
On Nov.1, Athletics Director Phillip Fulmer, who’s been on the job less than a year, announced that his department is continuing to review the Neyland Stadium Master Plan Renovations.
“To be very clear, I am super excited about the Neyland Stadium project going forward in the near future,” Fulmer said at the time.
Construction on the first phase of the renovation project has been delayed to provide more time for two classes meeting in the south stadium hall to move out, Fulmer said, adding that renovation plans were also under review.
“We simply need time to study all ideas of scope and design as we seek to maximize the fan experience and our return on investment for the next 100 years of Neyland Stadium,” he said.
Attendance at games wasn’t mentioned as a factor that caused the project to be delayed.
Of course not.
Anyway, just think about the likely ramifications of game attendance becoming less financially significant. And despair.