The new UC Berkeley stadium is highlighting budget priorities at universities around the country. The school now owes $445 million on the stadium and a new athletic facility, sucking up 20 percent of the athletic budget just for interest. The fear now is that the debt will eventually divert funds from academic programs.
The plan, according to a new report in the San Francisco Chronicle, was to finance the bulk of the stadium by selling premium seats for between $40,000 and $250,000, securing the seat for 40-50 years.
Seat sales have stagnated at just 1,875, well short of the 2,902 target.
"We said it wouldn't work out. They never should have done this," computer science professor Brian Barsky told the Chronicle. "The prices are too high. It was doomed to failure."
As the Chronicle points out, last year's on-the-field performance isn't helping: "The football team lost nine out of 12 games, a record so grim that head coach Jeff Tedford was fired. In all, not the sort of performance that entices many fans to surrender $40,000 for a lifelong seat, much less $250,000 for an even better view of the heartache."
The financial burden of major college sports on the host school has been a subject of increasing concern. Last year, USA Today reported that only 22 of 227 NCAA Division I schools were cash-flow positive.
"Among the top 100 schools, the 22 that had a surplus in 2011 nearly quadrupled their excess since 2005. The remaining schools did not generate enough to cover their operating expenses; their median deficit was 67% higher than in 2005," USA Today reported.
Last month, USA Today updated its report with very similar results, particularly noting the vast differences in revenue even among schools in the same conferences. Rutgers, heading for the Big 10 conference next year, "spent $28 million more than it generated — a deficit it covered with about $18.5 million from the school and $9.5 million in student fees," USA Today reported. "This constituted a slight improvement over 2011, when Rutgers spent $28.5 million more than it generated."
Eric Schulzke writes on national politics for the Deseret News. He can be contacted at email@example.com.