September 23rd, 2011
Did You Really Think People Would Buy $225,000 College Football Tickets?
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**It’s Sports Week here on the Credit Karma blog! Each day we’ll bring you a post about sports to help kick-off this Fall sports season.**
This is the first in what may be many op-ed pieces we’ll be posting on the Credit Karma blog. Please note that the opinions of the op-ed pieces posted here do not necessarily reflect the opinions of Credit Karma or its owners.
With football season just around the corner, I’m still shaking my head at you.
I was there when it all went down. In the middle of the worst fiscal crisis in your history, the ax came down on every side. To make up for a huge budget deficit, your decision-makers imposed furloughs on great professors, ceased funding to championship athletic teams, and brought on steep tuition hikes. It was the ultimate belt-tightening. But hard choices and sacrifices are made when dealing with debt, and as a personal finance writer, I get that.
Then, it seemed like that ax turned to gold. You moved forward with borrowing $321 million for a massive renovation project of the old football stadium.
I have to be honest; those so-called sacrifices are looking a little sketchy.
As a Credit Advisor, I wouldn’t tell someone in bankruptcy to liquidate their assets so they can buy a bright and shiny Maserati. When dealing with debt and severe budgets, you shave necessary costs—the vacations, premium cable bill, or gym membership—in order to sustain what matters—the mortgage, utility bills, and groceries. I mean, even Obama gets that.
Based on basic personal finance principles, that tells me that great professors and affordable education was expendable, and an awesome stadium was not.
Granted, you had your reasons. The 87-year-old stadium needed seismic retrofitting due to that pesky fault line, public facilities were installed, and access for the disabled was improved. And of course, future football seasons will bring in much-needed revenue, which I can’t argue with. Plus, you weren’t planning to use any state funds, so pat on the back to you.
Instead, you came up with the brilliant plan to finance your stadium’s renovation by selling 50-year rights to 3,000 special stadium seats. At $40,000 to $225,000 a pop.
If this elaborate financing plan works, great, you’ll pay your debts. If it doesn’t work, you’re digging a $321 million dollar hole on top of an existing chasm of budget deficits. Already, seat sales have slowed this year and the New York Times tells me you are only halfway to your goal.
I’ll say one thing, alma mater. You’ve taught me a valuable financial lesson.
Don’t spend money you don’t have. And if you’re a university, don’t spend money you don’t have while you’re simultaneously calling for a 30% tuition hike.
It’s like going on a shopping spree when you already have thousands of dollars in credit card debt, which many consumers can actually relate to. However, as a public institution of higher education, your shopping spree could be mortgaging students’ education.
But hey, maybe you’ll sell all of those $225,000 seats. At this point in the game, I have to root for you. And maybe my credit card debt will magically disappear and leave a Maserati in my driveway. Just maybe.
Keep up the Karma,
Justine Rivero, Credit Advisor