Catch-22s for ISU? Debt load, revenue gaps, NIL and recruiting
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I love the Frank Gehry building (laser center) along the river. The new hancher’s design is in dialogue with the Gehry building, reflecting one another, in not a few ways, across the water.
A variety of styles is good.
the additions to the dental school are good though. Lots of glass. Tasteful. Don’t like the WWII bunker concrete look of the original building. Sucks. Zero grace. Leaden and lugubrious.
Gehry’s building still gets great press and lots of praise. People come to town to see the architecture. See the article below from Architecture Magazine. Also features the incredible art building. Both art buildings - and the laser center - are amazing and won international awards. Sure, a box with corridors is easier to use, but why be boring and lame?
Summer Road Trip: University of Iowa
Aaron Betsky's midsummer migration brings him to the University of Iowa, where he finds statement buildings by Frank Gehry and Steven Holl.
www.architectmagazine.com
Yes. These are my questions too. And they are difficult to spin.
Debt is debt. Inadequate donations. Shaky revenue. Dicey debt to revenue ratios too.
The view across the river is great, but the backside view looks horrible. Plus there is a ton of wasted space on the inside of the building with catwalks and oddly shaped layouts.I love the Frank Gehry building (laser center) along the river. The new hancher’s design is in dialogue with the Gehry building, reflecting one another, in not a few ways, across the water.
A variety of styles is good.
the additions to the dental school are good though. Lots of glass. Tasteful. Don’t like the WWII bunker concrete look of the original building. Sucks. Zero grace. Leaden and lugubrious.
Gehry’s building still gets great press and lots of praise. People come to town to see the architecture. See the article below from Architecture Magazine. Also features the incredible art building. Both art buildings - and the laser center - are amazing and won international awards. Sure, a box with corridors is easier to use, but why be boring and lame?
Summer Road Trip: University of Iowa
Aaron Betsky's midsummer migration brings him to the University of Iowa, where he finds statement buildings by Frank Gehry and Steven Holl.www.architectmagazine.com
The university screwed the pooch by having a hodgepodge design for the campus. The pentacrest all looks great and classic and Gilmore matches them well. Then you have the early 20th century red brick buildings on both sides of the river in the IMU, Halsey, Calvin, ChemBot, Trowbridge, North Hall, Currier Hall, The Fieldhouse, and Kinnick Stadium. Then you get to the mid-century buildings like Phillips Hall, Seamans Center, Biology building, Boyd, Burge, and Van Allen Hall that are just boring from the outside, almost brutalist.
They’ve been doing a better job of making nicer buildings in the last 3 decades though, even if they are more modern looking. Pappajohn Business Building is a very nice, at almost 30 years old, but relatively simple looking building. Pomerantz and Blank are very nice. Plus many of the new fine arts buildings look amazing.
It just would have been nice for them to stick to a motif and then play with that. Are we stone like the Pentacrest? Or are we red brick like so much of the rest of campus? Or are we modern, glass-heavy, designs like the new stuff.
Contrast that with walking through Indiana’s campus and you can see that they had a design they were going for.
Sandstone everywhere. Cutters vs the Frat Boys. Breaking Away. Love the forested center of IUs campus though. My son spent a month at violin camp there in middle school. Love Indiana U. Too bad Bloomington has to be in the state of Indiana though.
My sons and I swam in the quarry featured in the famous oscar winning film. Iconic and timeless.
Having one architectural style is nice but it’s been done. Times change. Iowa has a wide range of styles and some truly world class architecture. Which is why art and architecture and food critics come to town to write articles. Oh, and the writers too.
I am not an accountant, as I said when I answered this before. I did not realize that having debt service make up 10% of a balanced budget was a dire situation. That wasn't the case back when I had a mortgage. In fact, it was considered an extremely healthy situation. I still haven't grasped when and why that changed.
I think it's safe to say that the situation wasn't deemed shaky when it was created. I very much doubt the Regents and the bean counters would have approved the plans had that been the case. Nobody involved is a gambler.
So -- as I said the first time I responded to this question -- you are asking what the reaction will be to the situation changing, despite the absence of hard information about several aspects.
Continuing the mortgage analogy, let's say both husband and wife are employed and one of them is told he/she will be laid off three years hence. Without that salary, if nothing changes, they won't be able to pay all their bills The two of them sit down and go over the future. First, they try to find another job for the one who's going to lose theirs. They also look at cutting spending, maybe restructuring their debt....all the obvious things.
The ISU people are presumably doing the analogous things now.
What the man and wife, and presumably the ISU people, are NOT doing is running around in circles, screaming that the sky is falling.
This!! ISU's athletics and many campus buildings are utterly boring and ugly. And they just keep running with the concrete theme! It's laughable.
Central campus is really nice though.This!! ISU's athletics and many campus buildings are utterly boring and ugly. And they just keep running with the concrete theme! It's laughable.
I know for a fact that a number of posters here don't even know it exists, let alone have seen it. Central campus is, in fact, what a college campus should look like. Including Lake Latrine.
A former financial advisor of mine, who has been on CNBC and always ranked high on Barron's national and lists, wrote three books on debt. Companies use debt to leverage investments. What he wrote about is how high net worth individuals can and should do the same to maximize their return. Of course that requires good terms on the debt. Everybody knows it's stupid to run up credit card debt. They always say it takes money to make money. Debt is one way to get more money.
This doesn't change the fact I don't know anything about Iowa State athletics' debt beyond the debt service.
Central campus is pretty good, beautiful sculptures for sure. Love the sculptures. Better than most. Outside that is just not good at all. Concrete orgasms.
In the B10, I’d say better campuses than ISU would be NW, Michigan, Wisconsin, Iowa, Indiana. ISUs on par with or maybe better than Rutgers and Purdue Haven’t been to others.
Most MAC schools have average campuses. Two MAC schools have much better campuses and architecture than ISU, and more unified “looks” than Iowa: Ohio and especially Miami University. Gorgeous campuses. Both founded at turn of 19th century.
Robert Frost called Miami “the prettiest college that ever was”.
I found an Iowa State financial report for the 2019 fiscal year, which is the latest publicly available. Under Bonds Payable it shows $66,685,000 for Athletic Facilities. That was down from the $69,360,000 in fiscal year 2018.
There are four pages at the back of the report that has 2019 and 2018 financial details for revenue bonds issued for nine different entities of which Athletic Facilities is one. I'm not an accountant, so I won't claim to understand it but present it in the spirit of transparency. Here is a summary of the fiscal year 2019 statement:
CONSOLODATED STATEMENT OF NET POSITION:
There are four pages at the back of the report that has 2019 and 2018 financial details for revenue bonds issued for nine different entities of which Athletic Facilities is one. I'm not an accountant, so I won't claim to understand it but present it in the spirit of transparency. Here is a summary of the fiscal year 2019 statement:
CONSOLODATED STATEMENT OF NET POSITION:
- Total Assets $82,815,102
- Deferred Outflows of Resources $1,429,485
- Total Liabilities $77,688,557
- Total Net Position $6,556,030
- Beginning Net Position $6,537,971
- Change in Net Position $18,059
- Ending Net Position $6,556,030
- Net Increase/(Decrease) $1,087,760
- Operating Activities $14,409,775
- Capital and Related Financing Activities ($13,575,705)
- Investing Activities $253,690
- Beginning Cash and Cash Equivalents $8,884,948
- Ending Cash and Cash Equivalents $9,972,708
Iowa has no campus. The Pentacrest is nice. I suspect you have not seen USU campus.
Iowa State athletics also leases a lot of their newer facilities, like the basketball practice facility. Its off the books, not considered “debt,” but functionally its the same. There’s millions of dollars in obligations not accounted for there. Creative yes, but will cornhole whoever ends up with the house of cards after Pollard.
SUI...why are you (and many isu fans) so scared of simply calling it The University of Iowa?
Wow, that is a very leveraged balance sheet.
Who is USU?
ive been to many campuses. East coast and west coast. Europe.
Great and unique campuses arent about quadrangles only or even mainly. They’re about natural features.
UC Boulder is about the flatirons and front range.
Northwestern is about Lake Michigan.
wisconsin is about Lake mendota.
iowa is about the iowa river. Most of the buildings and even dorms have a view of the river. It doesn’t split the campus. It opens it up. The whole city is turning toward the river now. New parks. Taller buildings with views of it.
And the new hancher is designed like a river boat for a reason.
The vision is still in the planning stages. There are at least two other facility improvements prior to that one. The bridge across University Ave. to connect new parking directly to the Jack Trice Stadium concourse has been approved and will start this fall. The additional parking east of the bridge is necessary before the entertainment district can happen.
Hilton improvements may follow the bridge project, but I don't think it has gone to the Regents for approval yet.
You paint a picture of the Iowa campus which sounds a lot nicer than it was when I was toting books from class to class. It certainly felt like it split the campus back then and left a lot to be desired. But the bars were fun.
Based on what Iowa has borrowed relative to funds raised with donations and paid for with revenues, and its unexpected additional $35M in revenues last year, its debt to asset ratio is probably around 10%, but I don’t have all the numbers.
There has been over $2 billion in new construction on campus since the flood, and by the city, and private developers along and overlooking the mile of river from city park, through campus, and all the way to huge new development anchored by big grove brewery.
I found the Iowa report for 2019. I've changed the Iowa State numbers to red text and have added the Iowa numbers to allow a quick comparison.
CONSOLODATED STATEMENT OF NET POSITION:
- Total Assets $82,815,102 $261,138,000
- Deferred Outflows of Resources $1,429,485 $2,923,000
- Total Liabilities $77,688,557 $231,925,000
- Total Net Position $6,556,030 $32,136,000
- Beginning Net Position $6,537,971 $27,861,000
- Change in Net Position $18,059 $4,275,000
- Ending Net Position $6,556,030 $32,136,000
- Net Increase/(Decrease) $1,087,760 ($5,464,000)
- Operating Activities $14,409,775 $84,260,000
- Capital and Related Financing Activities ($13,575,705) ($17,595,000)
- Investing Activities $253,690 ($1,916,000)
- Noncapital Financing Activities $0 ($70,213,000)
- Beginning Cash and Cash Equivalents $8,884,948 $59,814,000
- Ending Cash and Cash Equivalents $9,972,708 $54,350,000
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I used to have a lot of fun downtown at the bars. I hadn't been down there in years since those days, but I had a work event where we stayed downtown at the hotel. A bunch of us went to Joe's Place that night. I decided the head back to the hotel by myself. The walk back to the hotel was scary. The vibe was totally different that it was when I was younger. Back then it was full of college kids, often overserved but rarely dangerous. What I saw this time was a drug infested place, taken over by delinquent kids that did not look like college kids.
Recently I wondered if it had been cleaned up, but about a month ago saw the news with the video of a guy firing a round at another group as something was going down. Geez, what the heck is going on down there? Clearly not the place it used to be.
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The assets figure doesn't seem big enough to be all assets. Could that be just the value of the assets that have bonds written against them? Here's some text that precedes the financial statements:
NOTE 12 - SEGMENT INFORMATION
A segment represents identifiable activities for which one or more revenue bonds or other revenue-backed debt is outstanding. Investors in Academic Building Revenue Bonds rely on pledged tuition and fee revenue generated by the University for repayment. Investors in bonds of all other bond enterprises rely solely on the revenue generated from the individual activities for repayment. The University’s segments are described as follows:
B. Athletic Facilities Revenue Bonds The Athletic Facilities Revenue Bonds were issued to construct and equip intercollegiate athletic facilities. Revenues pledged for these issues are net revenues of the athletic facilities system.
Thank you for these numbers. Do you ever include links? No one can trust stuff just typed up by people, I'm sorry to say.
Assuming these numbers are not cherry-picked several numbers stand out to me:
Iowa's assets are over three times as valuable as ISU's.
Iowa's net position is almost five times greater than ISU's.
In 2019, Iowa completed a $90M renovation of Kinnick. Before the project, and the original number I stated, they estimated it to cost $80M. They had to borrow $30M for the project, and the remaining $60M was funded through donations and regular revenue. We've already seen that almost all donations for Iowa's athletic programs are funneled through the Iowa Foundation, and those numbers aren't part of the reports to the Board of Regents, though they are reported as revenue to the NCAA. That explained the over $30M difference between Iowa's revenues in 2019 (scroll up a few dozen messages to see this, and the links I gave to the Iowa Foundation, a separate 501c3 with separate governance, unlike ISU's foundation which is directly under the umbrella of the university, with the president chairing their board, and not a separate 501c3.
So what you have here is a year in which Iowa had to pay bills for a $90M renovation and major upgrade to its stadium. But again, I don't really trust your numbers because you prefer just to spout off stuff and provide zero sources. I've been asking for an honest discussion, and what I'm seeing from you in particular is unsubstantiated claims or just flak.
Don't have much time, but it took me twenty seconds to find this article, all based on good reporting and a FOIA request. It proves that the sports - particularly football - programs are in different universes financially.
Here's a direct quote from the WQAD Sports article, which I'm linking here, and which links the documents from the FOIA request.
"Iowa, a member of the Big Ten Conference, made $42.9 million off its football team in fiscal year 2018. That helped the department make nearly $7 million that year. To see the full report from a Freedom of Information Act request, click here.
"I think it goes a long way back to the '50s and '60s when Iowa football wasn't as successful," explained Roe, "but because of the support of the fans, Iowa was always known for having great attendance and great numbers at Kinnick Stadium, and then when Coach Hayden Fry came in in '79 and then coach Kirk Ferentz came 20 years later, that only continued to grow."
The numbers compared to Iowa's in-state rival, out of the Big 12 Conference, are noticeably different. In fiscal year 2018, Iowa State's football program made $20.4 million, netting a total profit of $84,000. Leaders at Iowa State wouldn't comment on the difference, but Roe says the financial support the university gets from its fans, is huge. To see the full report from a Freedom of Information Act request, click here."
Here's a direct quote from the WQAD Sports article, which I'm linking here, and which links the documents from the FOIA request.
Iowa vs. Iowa State football: Which team pulls in more profit for the school
You might think your team is successful on the field, but how well do they do financially? Jon Ketz tells us which team wins when it comes to making money."Iowa, a member of the Big Ten Conference, made $42.9 million off its football team in fiscal year 2018. That helped the department make nearly $7 million that year. To see the full report from a Freedom of Information Act request, click here.
"I think it goes a long way back to the '50s and '60s when Iowa football wasn't as successful," explained Roe, "but because of the support of the fans, Iowa was always known for having great attendance and great numbers at Kinnick Stadium, and then when Coach Hayden Fry came in in '79 and then coach Kirk Ferentz came 20 years later, that only continued to grow."
The numbers compared to Iowa's in-state rival, out of the Big 12 Conference, are noticeably different. In fiscal year 2018, Iowa State's football program made $20.4 million, netting a total profit of $84,000. Leaders at Iowa State wouldn't comment on the difference, but Roe says the financial support the university gets from its fans, is huge. To see the full report from a Freedom of Information Act request, click here."
This is null and void. It was before ISU won back to back National Championships.
And this post is exactly why ISU fans who post here, and on CF, get deservedly pilloried.
You truly believe what you claim, don't you? You're the kind of person who'd walk around Greenwich Village or Morningside Heights or the Upper West Side of Manhattan on garbage night, when there are piles of bags to be picked up curbside everywhere as midnight approaches, and complain that NYC is infested with rats and garbage, and is a shi*t town, and that sometimes people shoot guns.
I wonder where you live and what you do with your time. Do you live in rural Idaho? Are you a prepper or something? You sound old and very, very white to me. Do people who aren't white and old make you uncomfortable?
I cite facts about over $2 billion in new development along and overlooking the Iowa River in Iowa City in the last fifteen years - a ridiculous amount of development that doubtless exceeds the entire value of all the buildings and land in Ames campustown and their so-called "downtown" combined, and you claim that Iowa City's downtown is "infested" with drugs, and that there was a gun discharged this year but no one hurt. Ames has drugs too, and shootings, and assaults, as does EVERY town with people in it, and every town with even a decent sized college.
Iowa City metro area has a population of over 120,000 (a single metro area including coralville, north liberty, and tiffin). Ames is just over 60,000. So much more going on in IC area than in Ames. Iowa City brings in people for festivals that occur pretty much every weekend, and even during the week. Several thousand people were downtown last week Thursday for Taste of Iowa City. I was there. Gorgeous night. I've never - not once - felt unsafe in downtown IC, whether with little kids or alone, and at almost every hour day or night, or anywhere else in the city or metro area.
I use the term SUI as a troll, but that is the actual name. In the '60s, the university dropped the "S" for all practical purposes but it remains the name. It's what is used in legal documents and Regents stuff, unless something has changed.
You really have one hell of a time sticking to a subject, don't you?
True. In the sense of a traditional campus, there isn't one. When your route between classes includes convenience stores and/or taverns, that's one clue.
Why would a lease payment be considered debt service? And from whom does the AD lease the Sukup facility?
Sorry. I should have, but the reports themselves are 64 and 88 pages covering much more than athletics, so it takes some looking to find the athletics stuff. But here you go. I've linked to the page where you can get all the history. Iowa has released the 2020 report, but Iowa State has not, or at least not that I've found. In making the comparisons above I used the latest common year available for both schools, especially in light of the impact covid might have. I would think the ISU 2020 report should be added to the ISU website in the not too distant future
I would like an honest discussion too. Comments like this are not the path to achieving that. Regarding my posts on things like finances that have real numbers, I much prefer to find the reports that have the real numbers, rather than some article reporting those numbers. I think you probably prefer that too.
I don't expect you to accept my reporting of the numbers, just as you shouldn't expect me to accept yours. I try to avoid wrapping too much commentary around the raw numbers, when the numbers speak for themselves.
I do appreciate discovering things like differences between the NCAA and Board of Regents financial reports. I still hope to look at those reports in detail to find the discrepancies and see if they are what we think they are. But that effort got sidetracked when I found these latest reports on revenue bonds.
