Wags;842864435 said:

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Are you saying that Cal wasnt overly optimistic with their projections that were 3 to 5X more than programs like TEXAS and MICHIGAN?

Thats really the bottom line here, right?

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I'm not saying that at all. What I'm saying is ruminating over past mistakes won't change the debt level, ESP sales or football revenues. The I/a deficit doesn't get cured lamenting stupid projections and other stupid moves. In business, we don't like whiners, we like people who fit things, and Carol Christ has this dumped in her lap and seems to be taking the initiative to fix it.

wifeisafurd;842864512 said:

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I'm not saying that at all. What I'm saying is ruminating over past mistakes won't change the debt level, ESP sales or football revenues. The I/a deficit doesn't get cured lamenting stupid projections and other stupid moves. In business, we don't like whiners, we like people who fit things, and Carol Christ has this dumped in her lap and seems to be taking the initiative to fix it.

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In public institutions we like accountability, not people who say it doesn't matter why it went bad. We can both try to fix the problem and try to understand how it happened simultaneously.

OaktownBear;842864389 said:

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I preface this by saying I love Memorial and I personally would advocate for a more expensive price tag, but no we didn't "have to" get the seismic work done. There were other options like building a smaller stadium on the Edwards + site that would have been on much more stable ground (and where Memorial's original architect wanted the stadium to go. Or like building on an off campus site. Or like playing in the Colisseum or AT&T. Would those have been worth the savings? Feasible? No savings at all? I don't know because they were never realistically looked at as solutions. And while I and everyone else here might get misty eyed about Memorial, a lot of people who would foot the bill don't, and they had a right to a reasonable analysis.



I preface THIS by saying our facilities were criminally bad. But, no, we didn't "have to" do that. Was it a disadvantage? Absolutely. A $200M disadvantage? That is questionable. Did it make sense to build new earthquake facilities on a fault line in an extremely difficult site? Only if you were basically trying to hitch the wagon to a stadium retrofit. The facilities could have been less expensive. Heck, you could have made them part of a new stadium at Edwards.

I will also say that many academic disciplines have really bad facilities.



Good question. Understand, though, the project was hugely more expensive because of the fault line and the requirement to preserve Memorial.


Memorial won't be around in 200 years let alone 2000.

Versailles is incredible. Louis XIV looted the people of France to pay for it and well "Apres moi, le deluge"

In the late 1800's, Mad King Ludwig built an incredible, and incredibly expensive castle for his own pleasure. He finished and said "You know what? I'm going to build another EVEN BETTER castle!" His body was found in the lake six weeks later. And people love touring his castle to this day.

You know what the Pyramids and Versailles and Ludwig's castle and Memorial stadium all have in common? 1. I'm happy they exist. 2. I can be so because I didn't have to pay for them. Honestly, I don't think the joy that the Pyramids or Versailles have brought the world are worth the suffering and death many Egyptians and French endured because of them. And at least those people should have had a vote.

Honestly, what you are arguing here is exactly why people hate government today. Spend a whole lot of someone else's money to get something that benefits me. Fact is that if the athletic department had brought the cost of the project to the campus and asked for a vote, it would have crashed and burned. If you want to argue a plan of we need to build it, so do it and figure out the consequences later, how do you argue that it isn't the athletic department that should live with the consequences?

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We got something big accomplished. It's regrettable that it was done in such a way that we have all this debt, it really is, but we got something big accomplished. This will benefit more than just you or me, it will benefit the whole university. Think of the glory, man, the glory!

I don't know if anyone ever crunched the numbers on doing it at Edwards. Did they? Bobodeluxe mentioned having a Stanford-type stadium there...

Yuk!

As far as why people hate government today, I disagree. People haven't hated our government when we've accomplished big things (think Marshall Plan, highway system, the Apollo program). They hate government when government pisses away its revenues, with nothing big to show for it. Heck, we're running a federal deficit now, with a huge national debt, but if Trump were actually massively rebuilding the infrastructure like he said he was going to, instead of running off his mouth and his Tweeter, he might actually be popular. (Not the wall, though, of course!)

I also don't feel too bad about the stadium expenditure because it's basically a drop in the bucket when you look at all the money in the Bay area right now. A lot of people are rolling in a lot of money. Some of this money needs to be "redirected", like to our stadium. Yes there are much greater needs for the money, certainly, even within the University, but we can have our stadium and there's plenty of money left over for other things.

Look, I actually abhor the idea that college sports has come to this (the "arms race" and all), but it is what it is and we need to compete. Before you pick apart my words again, okay, we don't "need to" compete, just as we didn't really "have to" do the seismic work or "have to" upgrade our facilities. We don't really "have to" do any of this stuff, even have a sports program. But we "should".

Cave Bear;842864518 said:

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In public institutions we like accountability, not people who say it doesn't matter why it went bad. We can both try to fix the problem and try to understand how it happened simultaneously.

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It is now well understood where the problems occurred and the new Chancellor is willing to admit that, and to demonstrate to donors why it won't happen again. Other than firing Brostrom, which the Chancellor can't do, there is no one left to hold accountable. They are all gone. Like I said, the time now is to fix I/A's problems, which clearly don't involve making the same decisions. Whining doesn't cure the present deficit or future deficits. It just means a large post count. Moreover, it seems to me in public institutions we have too many leaders that just kick the can down the road rather than fix things.

Oski was obviously born under a bad sign:

Recessions happen - not like that one - what, two or three times a century?

Teddy asked for, well demanded, a high end "performance center". He didn't ask for half the cost to be spent mitigating the ramifications of digging a hole next to a crumbling stadium just to build it. Don't even mention the bad juju of rankling the likes of Chief Running Dumpster. Oops.

The early 21st century apparent turnaround in Cal Football fortunes was a mirage, blessings on DrunkOski, and other long banned soothsayers. The short upward trend in ticket sales was random noise.

Some unknown kid from the Chico area happened to be fully qualified.

Football is in danger of becoming pass.

Half a billion is a lot of fixing, even in the Bay Area.

wifeisafurd;842864556 said:

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Whining doesn't cure the present deficit or future deficits. It just means a large post count. Moreover, it seems to me in public institutions we have too many leaders that just kick the can down the road rather than fix things.

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We also seem to have some totally inept Administrators.
People that clearly wouldn't cut it in the private sector.

http://www.sfgate.com/education/article/UC-ripped-again-in-latest-audit-that-finds-11956728.php

A state audit released Thursday rips the University of California again - - - this time for bungling a plan to streamline its payroll systems.

The payroll overhaul will cost UC nearly $1 Billion.... triple the expected cost.... and will take five years longer than planned, says the audit that is the third deep dive into UC finances this year."

Big C_Cal;842864520 said:

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We got something big accomplished. It's regrettable that it was done in such a way that we have all this debt, it really is, but we got something big accomplished. This will benefit more than just you or me, it will benefit the whole university. Think of the glory, man, the glory!

I don't know if anyone ever crunched the numbers on doing it at Edwards. Did they? Bobodeluxe mentioned having a Stanford-type stadium there...

Yuk!

As far as why people hate government today, I disagree. People haven't hated our government when we've accomplished big things (think Marshall Plan, highway system, the Apollo program). They hate government when government pisses away its revenues, with nothing big to show for it. Heck, we're running a federal deficit now, with a huge national debt, but if Trump were actually massively rebuilding the infrastructure like he said he was going to, instead of running off his mouth and his Tweeter, he might actually be popular. (Not the wall, though, of course!)

I also don't feel too bad about the stadium expenditure because it's basically a drop in the bucket when you look at all the money in the Bay area right now. A lot of people are rolling in a lot of money. Some of this money needs to be "redirected", like to our stadium. Yes there are much greater needs for the money, certainly, even within the University, but we can have our stadium and there's plenty of money left over for other things.

Look, I actually abhor the idea that college sports has come to this (the "arms race" and all), but it is what it is and we need to compete. Before you pick apart my words again, okay, we don't "need to" compete, just as we didn't really "have to" do the seismic work or "have to" upgrade our facilities. We don't really "have to" do any of this stuff, even have a sports program. But we "should".

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"They hate government when government pisses away its revenues, with nothing big to show for it"

Social security and Medicare aren't big enough for you? 😀

Big C_Cal;842864364 said:

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Well, I was more posing the question, rather than starting off with an opinion. I realized something was messed up to cause all this debt. Part of the equation really hit home for me last November, when a buddy of mine invited me to join him in ESP during Big Game and there were TONS of empty seats. I asked him if it was because of the rain and he said, actually, that most were just unsold seats. He then went on to quote the argument about "economic downturn + football downturn". Yes, I know this was more of an explanation of the unsold ESP seats, rather than the debt as a whole.

So this thread has been enlightening for me.

I will say, though, that we had to get the seismic work done and we pretty much had to get the amenities and training facilities upgraded and we did that. I'm not sure what we could've gotten done for 70% of the price. Was that a proposal that was looked at?

I'm sure I could be skewered for this analogy, but when we look at the Great Pyramid nowadays, we don't see the 45,000 Egyptians that worked as slaves, nor the 1532 that died in project accidents*, nor the massive debt incurred. We just see that pyramid... and it is amazing.

That is the way huge public facilities investments work sometimes. It's a good thing to have, but you can't afford it, but you do it anyway. Later, you're glad. Maybe this will force the University to take on some of the IA debt somehow. That would probably be a good thing. Meanwhile, we have increased the chances of eventually having a Top Twenty football program, year in and year out.

My wife drives a Prius now, but I'll think twice when she starts talking about something new.

* made up numbers... never even been to Egypt

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I am not quarreling with the economic arguments. But I am quarreling with your historical references. Current leading historical analysis is that slaves did not build the Great Pyramid. Workers were mainly volunteers along the lines of the workers who built the great cathedrals of Europe. It was an exercise in faith.

Maybe this could be an appropriate lesson for Cal Fans.
"Keep the faith, Bears!"

Part of the problem is that some of the people making the decisions today refuse to recognize how government construction has really worked for the last 50 or more years.

Having promoters, like the President, calling the shots means that having the project approved is all that matters. The President has no concept of where the $1 trillion for infrastructure needs to be spent or how much of the 'decrepit' infrastructure will actually be restored. Government Contractors know that projects are sold by the sizzle not the actual requirements or specs. The Oakland side of the Bay Bridge needed only one third of the bridge upgraded for seismic reasons, the portion between the cantilever bridge and the toll plaza that rested on wood pilings. However the alternatives presented for choice were an expensive method for replacing the wood pilings, versus an attractive new design replacing the whole Oakland side for almost the same price (which was totally unrealistically low). Contractors count on the Government estimate and their bids to be much less than actually required in new construction; they make their profits on change orders that jack up the final price. Also these 'change orders' are generally not included in financial analysis of projects, even though they are anticipated. Analysis of project costs after the fact is too late to accomodate these serious costs. The Bridge has hundreds of thousands of captive customers to pay for cost overruns; Cal does not.

The seismic 'upgrade' of CMS was wildly ambitious and much greater than the actual need. 3/4s of the stadium was on land fill and the press box was actually an independent,
seismically safe structure inside the stadium shell. The areas of greatest seismic threat were a couple of areas sections at each end of the field where the fault passes under. These sections could have been rebuilt to allow for earth movement underneath; at a fraction of the cost of the preferred retrofit. Cal chose to do far more than was required and used the 'seismic scare' tactic to enhance the project and that accelerated the cost growth. One method for evaluating the seismic scare is determining how long after the seismic event the facility could be functional, not fully functional but back in operation. For a hospital it is 48 hours after a seismic event the hospital resumes caring for patients (it doesn't have to be 100% operational, just admitting patients). However designating the building for another use that is less time critical can make the building 'seismically safer'. I know of one DOD, multi-story, hospital that was determined to be unsafe because in a large earthquake all the floors above ground level would pancake to the ground. In that scenario, the hospital would be unable to resume operations in 48 hours and was rated as seismically unsafe. DOD did not have the money for a retrofit so
it closed the hospital and made it into a computer center. In a large earthquake the floors will still pancake to the ground, however computer centers at that time did not have the requirement to be operational in 48 hours so for it's new use the building was seismically safe. Of course this was facilitated by not using the original seismic engineers to evaluate the buildings ability to withstand a large earthquake as a computer center. Seismic assessments are used to justify elaborate enhancements and cost growth, CMS is just another example. Trouble is that the decision makers were given a choice between nothing and pie in the sky, when there were intermediate options unexplored.

Big C_Cal;842864520 said:

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We got something big accomplished. ...

As far as why people hate government today, I disagree. People haven't hated our government when we've accomplished big things (think Marshall Plan, highway system, the Apollo program). They hate government when government pisses away its revenues, with nothing big to show for it. Heck, we're running a federal deficit now, with a huge national debt, but if Trump were actually massively rebuilding the infrastructure like he said he was going to, instead of running off his mouth and his Tweeter, he might actually be popular. (Not the wall, though, of course!)

I also don't feel too bad about the stadium expenditure because it's basically a drop in the bucket when you look at all the money in the Bay area right now. A lot of people are rolling in a lot of money. Some of this money needs to be "redirected", like to our stadium. Yes there are much greater needs for the money, certainly, even within the University, but we can have our stadium and there's plenty of money left over for other things.

Look, I actually abhor the idea that college sports has come to this (the "arms race" and all), but it is what it is and we need to compete. Before you pick apart my words again, okay, we don't "need to" compete, just as we didn't really "have to" do the seismic work or "have to" upgrade our facilities. We don't really "have to" do any of this stuff, even have a sports program. But we "should".

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GivemTheAxe;842864627 said:

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I am not quarreling with the economic arguments. But I am quarreling with your historical references. Current leading historical analysis is that slaves did not build the Great Pyramid. Workers were mainly volunteers along the lines of the workers who built the great cathedrals of Europe. It was an exercise in faith.

Maybe this could be an appropriate lesson for Cal Fans.
"Keep the faith, Bears!"

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I don't know if I would say that is leading historical analysis vs. one of the latest theories. There is newish archeological evidence that they were treated much better than previously assumed. Well fed. Given medical treatment. Given proper burials. But they still suffered brutal physical consequences from the work. I don't think there is any new evidence showing whether their work was voluntary or forced other than the fact that the old image of the pyramid worker was something no one would volunteer for and maybe the kinder, gentler version was more likely to be voluntary. However, if you use slave labor for extremely physical work, it makes sense to keep them well fed and healthy. There is no written record regarding slave vs. voluntary and the archeology is inconclusive.

OaktownBear;842864643 said:

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I don't know if I would say that is leading historical analysis vs. one of the latest theories. There is newish archeological evidence that they were treated much better than previously assumed. Well fed. Given medical treatment. Given proper burials. But they still suffered brutal physical consequences from the work. I don't think there is any new evidence showing whether their work was voluntary or forced other than the fact that the old image of the pyramid worker was something no one would volunteer for and maybe the kinder, gentler version was more likely to be voluntary. However, if you use slave labor for extremely physical work, it makes sense to keep them well fed and healthy. There is no written record regarding slave vs. voluntary and the archeology is inconclusive.

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Sort of sounds like how the Giants treat their groundscrew, minus the well fed.

GivemTheAxe;842864627 said:

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I am not quarreling with the economic arguments. But I am quarreling with your historical references. Current leading historical analysis is that slaves did not build the Great Pyramid. Workers were mainly volunteers along the lines of the workers who built the great cathedrals of Europe. It was an exercise in faith.

Maybe this could be an appropriate lesson for Cal Fans.
"Keep the faith, Bears!"

---

To be honest, I just pulled that "pyramid knowledge" out of my... er... out of the sky. Imagine that. And on the most intellectual college sports bulletin board in the land, to boot. And now here I sit, shameless.

Basically, this is all Monday morning quarterbacking. Just to add my .02, there were posters at the time who said if Cal football moved permanently to the Oakland Coliseum or AT & T, they would not follow, because of the loss of the college atmosphere of playing on campus. Well, that atmosphere is substantially reduced anyway, because of the plethora of night games, the promotions, etc., etc. as we chase revenue to fill the deficit hole. Also, there were posters when ESP and the donation tiers were announced who complained about the likelihood they would be moved from their seats, claiming that in a bygone era they had been promised those seats in perpetuity as long as they remained season ticket holders.

The bottom line to me is that the stadium project occurred in an atmosphere of decades of neglect of the football facilities, and in the rosy glow of Tedford's success, and his contract clause that allowed him to leave with a minimal or no buyout if the facilities weren't upgraded. Despite that, not enough people were willing and/or able to make the commitment to the fundraising that was actually needed to do the project as originally intended. Since we have never had a John Arrillaga who would step forward and just write the whole thing himself, it was either abandon the project that was proposed, lose the coach and recede back to mediocrity, or move forward with fingers crossed. We moved forward, and got stung. Could it have been done more cheaply. Probably. Would that have satisfied Tedford. Who knows? I wish Christ luck in fixing the problem now, because none of the alternatives are particularly good ones. My assumption is that some sports that don't have major donors attached to them will be cut on the men's side, and others will have roster reductions, which in turn will allow us to go back to Prong I of Title IX and make cuts on the women's side as well. That's assuming Wilcox doesn't make a miracle turnaround in football that raises ticket sales substantially over the next couple of years, despite the issues with the night games.

Part of the reason we went big is the university doesn't otherwise support ICA. People realized this was the one chance in the next 75 years to get anything done. If the university was an actual partner with ICA and some level of trust and respect existed perhaps we could have gone smaller and made incremental improvements.

Playing off campus was a loser idea from the start. Same for Edwards field. That is some serious Monday morning QB'ing going on there.

The seismic work had to happen. As a practical matter the facility upgrades had to happen.

tequila4kapp;842864793 said:

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Part of the reason we went big is the university doesn't otherwise support ICA. People realized this was the one chance in the next 75 years to get anything done. If the university was an actual partner with ICA and some level of trust and respect existed perhaps we could have gone smaller and made incremental improvements. Playing off campus was a loser idea from the start. Same for Edwards field. That is some serious Monday morning QB'ing going on there. The seismic work had to happen. As a practical matter the facility upgrades had to happen.

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Many schools play off campus including UCLA, SDSU, Arkansas and Miami. There are various options available in the Bay Area. I'd say everyone who was in favor of if this boondoggle and bought in to those numbers have to chip in $1 million more each to cover the hole.

tommie317;842864801 said:

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Many schools play off campus including UCLA, SDSU, Arkansas and Miami. There are various options available in the Bay Area. I'd say everyone who was in favor of if this boondoggle and bought in to those numbers have to chip in $1 million more each to cover the hole.

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Students already have trouble arriving to Cal games at Memorial Stadium. Do you think they're going to waste 3 to 4 hours commuting to Levi's Stadium?

What other options are there? AT&T Park? Stanfurd Stadium? the on-its-last-legs Oakland Coliseum? Spartan Stadium?

Also, home games give alumni a chance to reconnect with the university. How much money would the campus lose from alumni rarely visiting campus? What other days offer this opportunity? Cal Day?

Also, the main graduation ceremony was moved from the Greek Theater to Memorial Stadium, allowing more people to attend.

BY comparison, UCLA and SDSU are commuter schools, so location on or off campus is not as big an issue. And SDSU is so close to the old Murph that when the city proposed tearing it down, SDSU wanted to annex the land to expand their campus. When growing up my family used to park in Oakland and walk to CMS for football games; however their are no other suitable stadiums within a 30-45 minute walk from the Cal Campus. By comparison, LSU's Death Valley stadium is actually student housing when home games are not scheduled. CMS planners needed to develop non-football uses for the facility and then costs could have been shared instead of depending on pie in the sky financial projections.

tommie317;842864801 said:

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Many schools play off campus including UCLA, SDSU, Arkansas and Miami. There are various options available in the Bay Area. I'd say everyone who was in favor of if this boondoggle and bought in to those numbers have to chip in $1 million more each to cover the hole.

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wifeisafurd;842864116 said:

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I'm going to respond to Oak because I view him as the "rational Cal fan" and he is quite good at finding the flaws in other's arguments.

I believe there was many mistakes in planing and implementation of the SAHPC and Memorial rebuild, which are both financial, planning and construction in nature. While I think these misstates are instructive, they were made by individuals who are now gone (admittedly Brystorm still is around), and they have resulted in sunk costs. The debt service is what the debt service is today, and while some tinkering with ESP is possible, we are left on the revenue side with essentially in the same position that exists today. If I had a crystal ball and was in power, I would have likely recommended following the UCLA route and renting a stadium or look at other options as Oak suggests. IMO, you have to look forward and '71 has a pretty good summary what logically will happen.

As I said in another thread, the debt issue has different components, and while important is not the end all to what ails I/A. The revenue stream to repay the debt, to the extent it relies on one program, football, is unreliable as revenue from that program will vary on how well the program is winning (which likely will vary over time), and football TV revenues which also is likely to vary as the platform for broadcasting is changing, and for other reasons which involve a discourse on TV sports that no wants to read. Moreover, the structure of the debt is overly sensitive to interest rates. If rates go up, reinvestment of capital fund proceeds could even exceed the interest due. Interest rates stay low, the more negative variance there is from the original model. Bottom line is any reduction in the debt means a far more stable athletic department. That said, I don't see how Cal I/A gets the benefit of the revenue produced by a football team with competitive facilities and ESP from build-out of clubs and not pay the related debt service. I can see how a forward thinking Chancellor would find it beneficial to reduce the debt for reasons that are in the University's interest, especially if she can get big brother UC (who was asleep when it came refinancing the debt in the lower interest rate environment before the Regents imposed a credit limit due to reckless borrowing the the UC level) will underwrite some portion of the debt in order to avoid paying for new land costs (and to expedite housing that would otherwise take years more and ****-off the City of Berkeley with land acquisition involved). This is a win-win. And my guess is there are other plans at work to get the debt more manageable.

That doesn't mean there can be business as usual because the current model of football paying the deficits of so many teams doesn't work, and in the long run gets worse. IMO, you can't cut teams in such a horrible way that you alienate donors and end-up with a net loss of money (see Sandy Barbour). But making programs more accountable for reducing their operating deficits or other prudent financial driven incentives or disincentives make sense. Or change the current business model over some time period. But the status quo doesn't work regardless of whatever this Chancellor can do about the debt issue. The good news is the new Chancellor actually wants to do something to make I/A work in the future and is reaching out to different stakeholders. The newspaper writers simply don't understand the issues involved; although, Wilner at least has a general understanding (he just doesn't understand the specifics). Anything you read in the Comical or most publications is garbage, and all poster do here is beat each other-up over inaccurate information.

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Can you explain your comments about the impacts of interest rates? Another poster said the rates are fixed. I'm confused.

okaydo;842864806 said:

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Students already have trouble arriving to Cal games at Memorial Stadium. Do you think they're going to waste 3 to 4 hours commuting to Levi's Stadium?What other options are there? AT&T Park? Stanfurd Stadium? the on-its-last-legs Oakland Coliseum? Spartan Stadium?Also, home games give alumni a chance to reconnect with the university. How much money would the campus lose from alumni rarely visiting campus? What other days offer this opportunity? Cal Day?Also, the main graduation ceremony was moved from the Greek Theater to Memorial Stadium, allowing more people to attend.

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If students aren't showing up now plus freshmen are not free anymore, relatively low attendance (much due to losing, many due to scheduling), and donations are fairly dry then I guess there is no difference if the stadium is on campus or 20 miles away. I prefer AT&T Park or Levi's. Yes they are not very close to Berkeley but they are in the two largest population areas in the bay with a lot of alumni

The AT and T season was pretty bad-low crowds, low spirit.

GB54;842864822 said:

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The AT and T season was pretty bad-low crowds, low spirit.

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Agreed. At first it was a novelty, but the charm wore off quickly, and student attendance in particular suffered. I drive 300+ miles each way to come back "home" for the game day experience and more. If games were played in San Francisco, Oakland, or somewhere other than on-campus, i stay home and enjoy the games on TV. I am confident I'm not alone in this view.

GB54;842864822 said:

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The AT and T season was pretty bad-low crowds, low spirit.

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Football in a baseball stadium is never good.

Imagine day games at Levi's

From Deadspin's Why Your Team Sucks, 49ers edition:
http://deadspin.com/why-your-team-sucks-2017-san-francisco-49ers-1797328541

Wags;842864611 said:

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We also seem to have some totally inept Administrators.
People that clearly wouldn't cut it in the private sector.

http://www.sfgate.com/education/article/UC-ripped-again-in-latest-audit-that-finds-11956728.php

A state audit released Thursday rips the University of California again - - - this time for bungling a plan to streamline its payroll systems.

The payroll overhaul will cost UC nearly $1 Billion.... triple the expected cost.... and will take five years longer than planned, says the audit that is the third deep dive into UC finances this year."

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I hear you. Don't even get me started on UC. How Janet N. still has a job is beyond my comprehension. That still doesn't help the I/A budget.

Everybody needs to calm the eff down. Everybody is thinking about these debt repayments in terms of current dollars. We are all so trained by the financial community to hate inflation that we don't understand how we benefit from inflation. Inflation will be Cal's friend as we pay off this debt. Let's assume 2% inflation / year for the duration of this debt repayment (and 2% is historically low). We currently pay $18M and in real dollars that amount will go down every year. Also, that means when the debt jumps to $26M in 2032 we are only paying $19.2M in today's dollars. If inflation is 4% we're only paying $14.1M in today's dollars in 2032. The debt is due in 2112. With 2% inflation that is only a $5.4M payment in today's dollars ($37M in nominal value). With 4% inflation that is a $0.8M payment in today's dollars. I think it's fair to guess that inflation over the next 100 years will be 2% - 4% if America is still a country worth playing college football in.

Viewed differently, if 50 years ago (1967) you established a $1 repayment plan. Today the earnings behind that plan are $7.34.

Cal isn't alone in this. The entire country is awash in debt - public and private. The country would benefit greatly from higher inflation which reduces the burden of debt for Cal, the public sector, and the private sector. Inflation haters are trained to say that inflation is theft and bad for us, etc. But here's the key - historically, INFLATION HAS ONLY BEEN SUSTAINED WHEN DRIVEN BY WAGE GROWTH. Cal football, and the country overall would benefit from inflation around 4% for a sustained period of time. That would greatly reduce the debt burden to Cal and every student debt and mortgage holder out there.

Cal's biggest issue is making sure I/A revenue growth meets or exceeds inflation. If that is the case then over time the debt will take care of itself, if we can manage the near term difficulties.

dajo9;842864880 said:

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Everybody needs to calm the eff down. Everybody is thinking about these debt repayments in terms of current dollars. We are all so trained by the financial community to hate inflation that we don't understand how we benefit from inflation. Inflation will be Cal's friend as we pay off this debt. Let's assume 2% inflation / year for the duration of this debt repayment (and 2% is historically low). We currently pay $18M and in real dollars that amount will go down every year. Also, that means when the debt jumps to $26M in 2032 we are only paying $19.2M in today's dollars. If inflation is 4% we're only paying $14.1M in today's dollars in 2032. The debt is due in 2112. With 2% inflation that is only a $5.4M payment in today's dollars ($37M in nominal value). With 4% inflation that is a $0.8M payment in today's dollars. I think it's fair to guess that inflation over the next 100 years will be 2% - 4% if America is still a country worth playing college football in. Viewed differently, if 50 years ago (1967) you established a $1 repayment plan. Today the earnings behind that plan are $7.34. Cal isn't alone in this. The entire country is awash in debt - public and private. The country would benefit greatly from higher inflation which reduces the burden of debt for Cal, the public sector, and the private sector. Inflation haters are trained to say that inflation is theft and bad for us, etc. But here's the key - historically, INFLATION HAS ONLY BEEN SUSTAINED WHEN DRIVEN BY WAGE GROWTH. Cal football, and the country overall would benefit from inflation around 4% for a sustained period of time. That would greatly reduce the debt burden to Cal and every student debt and mortgage holder out there.Cal's biggest issue is making sure I/A revenue growth meets or exceeds inflation. If that is the case then over time the debt will take care of itself, if we can manage the near term difficulties.

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The debt is due in 2112 but I'm pretty sure we will need another new stadium/renovation or 2 by then and what will their cost be? A billion each? That's if college football even exists in 20 years let alone 100 years

dajo9;842864819 said:

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Can you explain your comments about the impacts of interest rates? Another poster said the rates are fixed. I'm confused.

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It relates to our ability to invest funds for profit and use those funds to pay off debt, not the debt proper.

southseasbear;842864858 said:

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Agreed. At first it was a novelty, but the charm wore off quickly, and student attendance in particular suffered. I drive 300+ miles each way to come back "home" for the game day experience and more. If games were played in San Francisco, Oakland, or somewhere other than on-campus, i stay home and enjoy the games on TV. I am confident I'm not alone in this view.

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Agree

southseasbear;842864858 said:

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Agreed. At first it was a novelty, but the charm wore off quickly, and student attendance in particular suffered. I drive 300+ miles each way to come back "home" for the game day experience and more. If games were played in San Francisco, Oakland, or somewhere other than on-campus, i stay home and enjoy the games on TV. I am confident I'm not alone in this view.

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I agree 100%. I fly down for a game each season. A big part of that is to experience the campus and community again and to be reminded of/relive those great college years. If the game were anywhere else I'd just stay home and watch it on tv.

I'm okay with all your reasons why we must have on campus stadium. Just that Everyone who supported the fuzzy math to get it done must commit an additional $1million over the next 30 years pay it off.

tequila4kapp;842864905 said:

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I agree 100%. I fly down for a game each season. A big part of that is to experience the campus and community again and to be reminded of/relive those great college years. If the game were anywhere else I'd just stay home and watch it on tv.

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Even though I live in the East Bay, this is my sentiment, as well, and the reason I started this thread. Posters have given me some great detail on how we mishandled the project, but when I look at all the other options that we might've had, I think I'm glad we did it this way. Sure, I wish we had handled it better.

One of the problems mentioned, regarding the debt, is that we're really in the dog house with the Academic Senate types. Well, we've always been in their dog house. Okay, now they have some valid reasons, but still... In fact, now we have some leverage over them: We really need to invest in winning football, in order to pay off the debt. Sure, this is a little more "hard ball" than I usually like to play, within the University, but maybe it was time.

I also like Dajo's point about the debt maybe not being as big a problem as it seems. My first class at Cal was Econ 1, with Professor Sutch, and I remember him downplaying any problems with the national debt (though he cited other reasons, too). Yes, I get that our debt is a little different, but in some ways it isn't.

"Money is just ink in bankers' books!" (but good football facilities are a 50-75 year tangible asset)
- Richard Sutch

UCLA is not a valid comparison - they have never had an on-campus stadium, sharing the Coliseum with USC before moving to the Rose Bowl. You don't miss what you never had. Also, I personally enjoyed going to AT &T in 2011, and I have to travel 100 miles to the games. But that year was probably the worst-attended season ever, or at least since I have been going to games in the mid-60's. Granted, the team was only Ok but they at least had a winning season. And I went to the game at Levis stadium where the Oregon fans probably outnumbered the Cal fans. So no, an off-campus stadium would not work.

tequila4kapp;842864893 said:

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It relates to our ability to invest funds for profit and use those funds to pay off debt, not the debt proper.

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This is indeed what wifeisafurd seems to have been alluding to: a plan in which you borrow money at (fixed) tax-exempt muni bond rates, then reinvest the proceeds of the borrowing at higher taxable rates. The delta between your investment returns and your borrowing cost is used to subsidize your borrowing cost. There are many potential problems with such a plan. But I know next to nothing about the stadium financing plan so I will refrain from further commentary...

Larno;842865017 said:

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UCLA is not a valid comparison - they have never had an on-campus stadium, sharing the Coliseum with USC before moving to the Rose Bowl. You don't miss what you never had. Also, I personally enjoyed going to AT &T in 2011, and I have to travel 100 miles to the games. But that year was probably the worst-attended season ever, or at least since I have been going to games in the mid-60's. Granted, the team was only Ok but they at least had a winning season. And I went to the game at Levis stadium where the Oregon fans probably outnumbered the Cal fans. So no, an off-campus stadium would not work.

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Att park season was a temporary, one off season so it's hard to judge just on that season alone. As a season ticket holder I even skipped it cuz they screwed me over. Again, Levi's was also an exception case as a weekday night game build as the first ever football game at Levi's vs an opponent that travels extremely well and was highly ranked. I expect the that the true results would be better than those cases.

FuzzyWuzzy;842865028 said:

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This is indeed what wifeisafurd seems to have been alluding to: a plan in which you borrow money at (fixed) tax-exempt muni bond rates, then reinvest the proceeds of the borrowing at higher taxable rates. The delta between your investment returns and your borrowing cost is used to subsidize your borrowing cost. There are many potential problems with such a plan. But I know next to nothing about the stadium financing plan so I will refrain from further commentary...

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I hate professions that make other people take the risk and loss if their fuzzy math came out unrealistic at the end by a large margin. Perhaps there could have been some insurance or outcome based contract we could put in place (besides defaulting)