Unbelievable. But not surprising.
I like the one where they are invited to the Big 10 and Ohio State immediately changes their schedule so they can play ISU right away.
Catch-22s for ISU? Debt load, revenue gaps, NIL and recruiting
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I like the one where they are invited to the Big 10 and Ohio State immediately changes their schedule so they can play ISU right away.
That's a lot to digest and analyze with speculative questions not many can answer. So it took me right back to the 2022 budgets to see what is reflected in the current fiscal year for both schools. If these debts are a huge burden the budget should reveal that.
- Iowa has an expense line-item for Facility Debt Service of $16,409,466.
- Iowa State has an expense line-item for Debt Service of $9,811,694.
There are a couple of other line-items of interest relating to deferred maintenance which you mentioned in your post. Iowa State combines Capital Projects and Deferred Maintenance so there is no detail on how it's split. I list the closest thing that may be related in the Iowa budget for comparison, although I don't know if these are similar things.
- Iowa has an expense line-item for Buildings & Grounds of $10,553,878.
- Iowa State has an expense line-item for Capital Projects/Def Maint of $7,111,000.
Two years ago the athletic department took over management of the Iowa State Center. The Center includes many facilities that are not athletics related, but it was deemed it could be better managed by athletics, I think largely because of some grander plans for the area. Despite managing the facilities, I don't know that it means the athletic department gets the revenue or is burdened with all the expenses of these non-athletic facilities. That's a key question that needs answered before worrying about how deferred maintenance will affect the athletic budget. Even if it becomes part of the athletic department budget, it could just as easily go back on the University's books if the athletic department revenues take a big hit from losing a big media payout. It's hardly fair to dump something like this on a department if it's unable to support it. I think the bigger issue with Stephens is that it's operation has not been paying for itself and that needs to change.
Note: I had to edit your quoted post and some of my response to fit within the 10,000 word limit.
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I read that 50% as from their current TV contract which is $2.6B/13 years, but they were in line to increase that significantly come renegotiation time. To put it in perspective, the B1G's current contract is $2.6B/6 years and there are estimates that it will grow to $4.6B/6 years upon renewal.
I've been there for a wrestling match shortly after the athletic department took over management. It was a lot of fun with the typical pre-show drinks and social hour. I sat in one of the closer loges and felt pretty sophisticated while we waited for the match to start. I felt underdressed. It was an unusual setting.
It wasn't a big name team, but it was fun. I don't care if they ever do it again, but they might.
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It's even worse if you really think about it. The current G5 schools have never been P5 or become accustomed to P5 resources and P5 money. They've grown organically into their budgets and have had to raise money and finance their facilities with those budgets.
ISU is in for severe shock because not only do they have to learn to live in a new budget reality but they also have this massive amount of debt they took on assuming they would have future cash flows to service that debt. Now that money won't be there but the debt payments still come do what do you do? You have to slash your operating budget even further to cover the debt. On top of it, the prettier the digs the higher the cost to maintain such digs.
ISU is the equivalent of upper management of a small town company who lives in the million dollar house out at the country club who just got fired while owing a $600,000 mortgage on the house. He's got no way to pay for it now. No local job prospects that can pay anywhere near his former salary. No where he can go to make that kind of money. I'm sure some of you have seen that situation play out in real life. This is history altering for ISU athletics.
Point is they are not only going to fall back to G5 levels of resources, they are going to struggle to keep up with G5 schools due to the massive debt service that hangs over them.
Iowa State's revenues have grown rapidly in recent years. If that revenue drops because of a lesser media deal, it could put Iowa State back in the territory they operated in for years. It won't be the end of Iowa State athletics. It will require adjustment, but how much depends on how much revenue is lost and how much time there is to adjust to it.
By the time this all gets resolved, it's entirely possible the revenue doesn't drop at all. With so much money being thrown around for live TV, there may still be someone willing to pay similar dollars in 2025 as the current budget. The issue could be that the SEC and Big Ten media revenues distance themselves even further from the Big 12. You fall further behind even with stable revenues.
It is worse than your analogy. Imagine if that guy’s employer did massive layoffs and there was no other employer in town. Then he’s stuck with a house that he can’t afford and nobody in town can afford to buy from him. ISU has no potential buyer for their overbuilt assets. They are going to need to hope that they turn into some sort of football powerhouse that draws large crowds and lots of TV appearances, ala Boise State 15 years ago, in order to bring in revenue to pay for their stuff.
Also, to maintain Div 1 status, ISU can’t drop any men’s sports and have to drop no more than 2 women’s sports. The requirement is at least 7 of each or at least 6 men’s and 8 women’s. And there must be at least two team sports for each gender. But if they drop any women’s sports they risk a Title IX issue.
My biggest fear is the BoR deciding that they will take Iowa’s Big Ten money and give it to ISU to keep their sports alive at the D1 level. Which would be a horrible mistake as it would be the death of competitiveness for both programs.
I think some posters here are engaging in wishful thinking when discussing the future financial tribulations of the ISU athletics department. But you get your jollies where you can. This is still America.
We already did that. Before OU and TX announced anything! Wake the hell up.
The walking bridge is estimated to cost $10 million. Two donors have each pledged $5 million. So that shouldn't be a factor.
ISU is looking at taking a $20 million+ haircut in their annual revenues. That's like living a Covid year every year in perpetuity. This is way worse than many of you Clone loyalists can imagine. The financial future is bleak, even worse when you consider the debt obligations for an AD that is overbuilt for the financial future you are facing.
The phrase "whistling as you're walking by the graveyard" comes to mind.
The phrase "whistling as you're walking by the graveyard" comes to mind.
The Big 12 is in the middle of a 13 year $2.6 billion media deal. That works out to an average of $20 million per team per year. To lose $20 million per year when that deal expires would mean the Big 12 would receive nothing for its tier 1 and tier 2 media rights in the future.
If that's the case the move to the MAC shouldn't be too painful. Good luck!
I ran some numbers on Texas and Oklahoma exiting before the last fiscal year 2024/2025. According to the best number I could find each Big12 currently gets $38.8M from media rights. Since both TX and OU will play a Big 12 schedule this FY that leaves 3 FY's to pay a penalty upon. Even without TX/OU ESPN is on the hook for 3 more FYs to broadcast Big 12 events. What TX/OU could do is agree to divide their $77.6M/FY among the remaining 8, ie Isu would get $38.8 plus$9.7M, which is 1/8 of $77.6M. This would done over the last 3 FYs. ISU would be getting $48.5M/FY for those last 3 FYs. I'm sure TX/OU can each survive without the $38.8/FY.
What intrigues me is the number of ISU fans that believe the Big Ten will expand and a membership will open by 2025. I believe any expansion openings are at least 11 or 12 years away. The demographics point to a desire to add members like Virginia and North Carolina. Both are AAU members and in population growth areas. Each attract huge research dollars. They offer significant value over Kansas or ISU.
I'm still in the camp to add no one.
What intrigues me is the number of ISU fans that believe the Big Ten will expand and a membership will open by 2025. I believe any expansion openings are at least 11 or 12 years away. The demographics point to a desire to add members like Virginia and North Carolina. Both are AAU members and in population growth areas. Each attract huge research dollars. They offer significant value over Kansas or ISU.
I'm still in the camp to add no one.
How about this for all of the Clone fans that don’t think this is a big deal. Leave here immediately, call the university, and tell them that you want to stay in the Big 12. Then come back here in 10 years and talk to us. We’ll see who is right.
If the Big 12 poaches BYU and can find one other decent team like a Houston, they will survive as long as nobody else leaves. But the amount of money coming in will plummet as there won’t be any super large fan base left in the conference to drive a media deal. And that conference wouldn’t deserve power status in football, while it could retain it for basketball.
But if Kansas, WVU, Texas Tech, and Okie State were smart, they’d be looking elsewhere for conference membership and could probably get it with the PAC 12 or ACC. If any of those dominoes fall, it is all over for the conference.
If the Big 12 poaches BYU and can find one other decent team like a Houston, they will survive as long as nobody else leaves. But the amount of money coming in will plummet as there won’t be any super large fan base left in the conference to drive a media deal. And that conference wouldn’t deserve power status in football, while it could retain it for basketball.
But if Kansas, WVU, Texas Tech, and Okie State were smart, they’d be looking elsewhere for conference membership and could probably get it with the PAC 12 or ACC. If any of those dominoes fall, it is all over for the conference.
1. I'm not going to respond to the last graf because I'm not in the camp that thinks the BiG is an option.
2. I think the $38.8 million a year is not just media rights, but the total conference payout, which would include bowl revenue, NCAA tournament revenue, et.
3. My understanding is that there are three financial issues related to OU and UT departing the conference.
(a) There is a penalty for not giving 18 months notice. That doesn't apply.
(b) Each departing team is obligated to pay the conference an amount equal to what it received for the previous two years. That's roughly $40 million a year each, or a total of $160 million to be split 8 ways.
(c) The Big XII owns the Tier 1 and Tier 2 media rights for both Texas and Oklahoma through the 2024-25 season. In other words, if Texas hosts Alabama in November of 2024, the Big XII has the rights to televise it.
I could be wrong about any of that; moreover, it's highly unlikely (IMHO) that the lawyers won't be busy negotiating to adjust those numbers.
My point is NOT that the departure of the two teams isn't a big deal. It is, and it poses a major financial challenge to ISU in the long run. My point is that the world isn't going to end the day after tomorrow. ISU has several years before the financial pinch hits.
I'd welcome comments and corrections from serious posters who are informed of the facts. The rest of you guys can do whatever you want;; it's your board.
I enjoy the change in tactics. Recently you could only look at numbers from your pivot table and from a very narrow time frame. Now you are able to project forward and use information from someone else’s spreadsheet. Nice job expanding your skill set. Now let’s look at ratings and viewers……
Please remember this... That said, you are pretty reasonable for a clone.
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As mentioned couple of times above, BOR, State of Iowa, etc are not going to let ISU tank. Debt forgiveness, reallocation of money from Iowa to ISU, whatever. Taxpayers will wind up paying for ISU debt one way or another.
Just wanted to say I legitimately appreciate your posts — you seem like a really chill guy. Thank you for being willing to have an actual conversation instead of a pointless pissing match back and forth.
I’d say that my primary concern for ISU isn’t necessarily what the “final” outcome of all of this will look like. It’s the damage that could be done while everything is in limbo. This will likely hurt recruiting (possibly this year, most likely in future years). Then the financial hits come, and at that point, combinging the financial stress with suboptimal recruiting, it may be hard to keep elite staff on board.
Can we please, please have an honest discussion, not one with half-truths and quarter-truths?
Fact: Iowa completed $145M in renovations and additions to Kinnick, the new football complex, etc., in recent years, and had to borrow only $30M to do it. All the rest was from donations and regular revenue from the program. Zero tax dollars.
Fact: ISU just completed an $80M renovation of JT Stadium and had to borrow $60M to do it, involving the Board of Regents to get those bonds approved.
I cited publicly-available sources for all the above. Those numbers tell the real story, and the fact is that ISU is very exposed to risk in servicing their debt, especially now that the B12 has imploded and no other P4 conference will invite them. Full stop.
You take the above facts and you do some massaging of numbers and leave us with the impression that Iowa's debt (service) load is greater?
Seriously?
I can do that too.
A cyclone fan gets a mortgage for $100K, nearly 4% interest, 30 year. Her debt service is $473/mo
A hawk fan gets a mortgage for $50K, same interest, 10 year. His debt service is $504.
See?!? Mr. Hawk fan is in a worse position, right?
Whatever.
You didn't even reveal the terms of the bonds, then pretended to compare.
The above has been the propaganda strategy for Clone fans everywhere and on this board. Just muddy the waters and delude themselves in the process.
Let's get real. Please.
I don't have all the information. One reason why I posted because I'd like to understand.
I'm guessing that Iowa borrowed $50M last year because of very dire predictions about C19's effect on athletics, but then a few months later was able to have half a season, and as I cited in the OP, their revenues were $36M higher than expected, so they've been repaying a very short-term debt back very quickly. Since ticket sales this year are ahead even of 2019, looks like revenues will again exceed expectations.
Iowa's in an extremely strong and enviable financial position. And they have by far the best conference in sports behind them, a conference in which they are among a handful of leaders.
Iowa's FB program is ranked by the Wall Street Journal FOURTH in the 14-member B10 in revenues, well ahead of Wisconsin and Nebraska and very slightly behind PSU, and on par with Nebraska and Wisconsin in valuation. Iowa is in great shape going forward. Outstanding shape.
Let's just have an honest discussion, and let's cite sources rather than throw numbers around like high schoolers or make ridiculous claims like conspiracy theorists.
I'm guessing that Iowa borrowed $50M last year because of very dire predictions about C19's effect on athletics, but then a few months later was able to have half a season, and as I cited in the OP, their revenues were $36M higher than expected, so they've been repaying a very short-term debt back very quickly. Since ticket sales this year are ahead even of 2019, looks like revenues will again exceed expectations.
Iowa's in an extremely strong and enviable financial position. And they have by far the best conference in sports behind them, a conference in which they are among a handful of leaders.
Iowa's FB program is ranked by the Wall Street Journal FOURTH in the 14-member B10 in revenues, well ahead of Wisconsin and Nebraska and very slightly behind PSU, and on par with Nebraska and Wisconsin in valuation. Iowa is in great shape going forward. Outstanding shape.
Let's just have an honest discussion, and let's cite sources rather than throw numbers around like high schoolers or make ridiculous claims like conspiracy theorists.
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And I also want to share my admiration and appreciation of Lone Clone. He's among the few humble voices of reason and objectivity on this entire board, whether clone or hawk fans. Thank you, kind sir!
I don't wish ill on ISU. I do think ISU has a critical role in higher education in the region, has some programs that Iowa lacks (Ag, Vet Med, architecture, fashion design). I don't think that Pollard's strategy to "build up" ISU by tearing down Iowa is, frankly, Iowan. We're exceptionally good people in this state. I've lived all over, and you won't find nicer people anywhere.
But money is a different story.
Iowa and ISU are in different leagues in sports, and different tiers as academic institutions. The Board of Regents has tried a procrustean bed approach to funding over the years, cutting Iowa's legs off and stretching ISU to fit. That strategy to bring Iowa down closer to the level of other institutions is a bad one. In Ohio, for example, tOSU has twice the percentage of money from the legislature as other institutions like Miami University, and that situation has existed for many decades. The result is that their funding priorities build up tOSU to the detriment of other institutions, but to the benefit to the entire state.
I'm just citing numbers and asking questions and drawing conclusions and asking for clarification, trying to understand.
I wish some people on this board - hawk fans and others - were more fact-based, more honest, more Iowan.
I don't wish ill on ISU. I do think ISU has a critical role in higher education in the region, has some programs that Iowa lacks (Ag, Vet Med, architecture, fashion design). I don't think that Pollard's strategy to "build up" ISU by tearing down Iowa is, frankly, Iowan. We're exceptionally good people in this state. I've lived all over, and you won't find nicer people anywhere.
But money is a different story.
Iowa and ISU are in different leagues in sports, and different tiers as academic institutions. The Board of Regents has tried a procrustean bed approach to funding over the years, cutting Iowa's legs off and stretching ISU to fit. That strategy to bring Iowa down closer to the level of other institutions is a bad one. In Ohio, for example, tOSU has twice the percentage of money from the legislature as other institutions like Miami University, and that situation has existed for many decades. The result is that their funding priorities build up tOSU to the detriment of other institutions, but to the benefit to the entire state.
I'm just citing numbers and asking questions and drawing conclusions and asking for clarification, trying to understand.
I wish some people on this board - hawk fans and others - were more fact-based, more honest, more Iowan.
Thanks for the kind words. You may want to take them back sometime.
For the record, Psyclone is one of the most fact-based posters I've seen, on this or any other board. I may be prejudiced because we have shared a beer or 12 from time to time. What's happening to him here is the same thing that happens to me regularly. He is saying "the house is white on this side" and being castigated because there is a board on the back of the house that is orange.
And it isn't "Iowan" to exaggerate the difference, academically and/or athletically, between the two state schools. It's Iowa message board. I am reminded of what happened when I transferred from ISU to Iowa, a story too long to relate here.
For the record, I am very amused by your reference to treatment by the regents. The truth is that in the past, particularly when UI grad Terry Branstad was governor and Hawkeye mega-donor Marvin Pomerantz was chairman of the BOR, there was a concerted effort to restrict ISU growth. They took away WOI-TV and tried mightily to eliminate the ISU journalism program.
Now....did I make factual errors in my post about the financial implications of the defection of OU and UT?? I would really like to know if I did, lest I make the same mistakes again.
Good luck. Psyclone thinks that even with the departure of OU and TX, they can have future athletics revenue that is unchanged.
You have to keep an eye on lone clone, he hates the hawks and on occasion will spin the facts if it makes Iowa look bad.
He makes a lot of snide comments in regard to Iowa and this forum as well.
I get it. I'm not going to ride the Lone Clone train though and act like you're some swell guy.
Looks like Branstad / Pomerantz were doing what ALL other states do in regards to funding: make sure their state has a clear Flagship university and a truly national brand. Helps the entire state. Ohio has done it since forever. Michigan. Texas. Virginia. California (Cal Berkeley, UCLA second). Washington. Hell, even Cornell University gets huge funding from the State of NY (not all their colleges are public).
Any compromises just screw things up. Dividing the pie evenly just ensures that no one gets nearly enough to compete on a regional, national, and global level.
ISU has its niche and it's mostly Iowa-focused. Most ISU grads stay in Iowa, especially Ag, Vet,
Iowa's niche and brand is both local and national.
ISU has 16% grad students, mostly in Ag and Veterinary Med and related fields
Iowa has 28% grad students, mostly in Humanities, Law and Medicine and related fields
Iowa is larger, enrollment 32,535. ISU is at 31,825
So these are quite different universities, and they should stay that way. State funding will continue to decrease, so things like sports branding and especially affiliations like conferences are extremely important. Iowa will continue to lead the way in the B10, and in Iowa, going forward, and this era of state funding "parity" wasn't successful insofar as ISU can't leverage itself into parity with the big boys, including Iowa.
As for personalities on the board: I'm interested in facts and good discussion. It's possible to learn things here. And it's possible to act like Iowans and not let the cancerous cable-news shout-fests and crazed conspiracy theories pollute this or any community.
Facts exist. Facts matter in discussion and in communities more than anything else. Facts trump opinions. Facts will get us all out of the mess of mass delusion.
Where do facts get discovered and verified? At institutions like Iowa and Iowa State. We so often forget that, disparage researchers and academics, and think this is just about football. Even with NIL, it's still about students and learning and creativity and discovery, and the entertainment of sports is just icing.
Any compromises just screw things up. Dividing the pie evenly just ensures that no one gets nearly enough to compete on a regional, national, and global level.
ISU has its niche and it's mostly Iowa-focused. Most ISU grads stay in Iowa, especially Ag, Vet,
Iowa's niche and brand is both local and national.
ISU has 16% grad students, mostly in Ag and Veterinary Med and related fields
Iowa has 28% grad students, mostly in Humanities, Law and Medicine and related fields
Iowa is larger, enrollment 32,535. ISU is at 31,825
So these are quite different universities, and they should stay that way. State funding will continue to decrease, so things like sports branding and especially affiliations like conferences are extremely important. Iowa will continue to lead the way in the B10, and in Iowa, going forward, and this era of state funding "parity" wasn't successful insofar as ISU can't leverage itself into parity with the big boys, including Iowa.
As for personalities on the board: I'm interested in facts and good discussion. It's possible to learn things here. And it's possible to act like Iowans and not let the cancerous cable-news shout-fests and crazed conspiracy theories pollute this or any community.
Facts exist. Facts matter in discussion and in communities more than anything else. Facts trump opinions. Facts will get us all out of the mess of mass delusion.
Where do facts get discovered and verified? At institutions like Iowa and Iowa State. We so often forget that, disparage researchers and academics, and think this is just about football. Even with NIL, it's still about students and learning and creativity and discovery, and the entertainment of sports is just icing.
Good post, largely agree. Your analogy regarding psy is actually backwards. Psy sees the orange board on the back of the house and claims the house is orange. Ignoring the fact that 98% of the house is white. Review his methods on his ‘fact based pivot table’ where he will only look at 2020 numbers. Because those are the only ‘facts’ that support his premise. The singular orange board doesn’t make the house orange. That would be why I challenge the ‘facts’ and how he selectively uses them.Thanks for the kind words. You may want to take them back sometime.
For the record, Psyclone is one of the most fact-based posters I've seen, on this or any other board. I may be prejudiced because we have shared a beer or 12 from time to time. What's happening to him here is the same thing that happens to me regularly. He is saying "the house is white on this side" and being castigated because there is a board on the back of the house that is orange.
And it isn't "Iowan" to exaggerate the difference, academically and/or athletically, between the two state schools. It's Iowa message board. I am reminded of what happened when I transferred from ISU to Iowa, a story too long to relate here.
For the record, I am very amused by your reference to treatment by the regents. The truth is that in the past, particularly when UI grad Terry Branstad was governor and Hawkeye mega-donor Marvin Pomerantz was chairman of the BOR, there was a concerted effort to restrict ISU growth. They took away WOI-TV and tried mightily to eliminate the ISU journalism program.
Now....did I make factual errors in my post about the financial implications of the defection of OU and UT?? I would really like to know if I did, lest I make the same mistakes again.
That is absolutely wrong. He is very specific in what he says...which is why some of the posters here can't understand him. In your example, he went out of his way to AVOID claiming the house was orange. You and others made an incorrect assumption and ran with it.
OK, in view of your comments about Psyclone, you have to appreciate the irony/humor in the fact that you are comparing 2019 Iowa enrollment to 2020 ISU enrollment.
In any case, your fellow posters here have been claiming for years that the fact ISU is bigger isn't relevant to any discussion.
ISU has had a larger undergraduate enrollment than Iowa in most years since WW2, and has had a larger overall enrollment for the past several years.
My bad on enrollment numbers, and wasn't trying to be deceptive, but there aren't major changes in enrollment year to year. Both schools have been growing. Iowa keeps building new dorms and private apartment towers keep going up downtown, mostly for students. My main point was about the different characteristics of the student body, with Iowa's percentage of grad students being nearly twice that of ISU's.
Thanks, but I've been involved in my share of pointless pissing matches.
I agree the uncertainty is going to hurt recruiting, quite possibly with some of the current verbal commits. It also will give more ammunition to opponents who have been beating the "Campbell won't stay" drum to recruits.
I didn't think you were intentionally being tricky. But FWIW, ISU is bigger. I think they are
In an unrelated matter, I found the Regents issuing $59.9 million in revenue bonds for the ISU athletics department last year; duration is 20 years, didn't find the interest rate.
You could clear up something for me. You dismissed the fact that ISU is budgeting less than Iowa for debt service, pointing out that Iowa borrowed less than ISU for renovations and additions. But since the whole point of this discussion is ISU's cash flow, isn' t ISU's annual debt service the most relevant factor?
For sure — and to be fair, Campbell has proven how loyal he is beyond a reasonable doubt. I just think this will *really* test that.
That's valid. Do you know where to find a breakdown by year? I don't have those details. Regardless it all rolls into conference distributions, which I do have and have posted.
