Old Dominion University wants to tear down its old football stadium, Foreman Field, and build a $55 million facility in its place. The university says it can pay for the project without raising student fees, traditionally a major source of funding for athletic programs.
If all goes according to plan, reports the Virginian-Pilot, the east and west sides would be demolished immediately after the 2018 season and rebuilt in time for the ODU Monarchs to play Norfolk State in August 2018. ODU requires General Assembly approval for the project, which appears to be forthcoming. “They have come to Richmond and made a good case,” said state Sen. Frank Wagner, R-Virginia Beach. “It’s fiscally prudent. Everything appears to be a go.”
The new 22,000-seat stadium will hold only 2,000 more spectators than Foreman Field, but it would offer better seats and bathrooms. The stadium could be expanded to 30,000 seats if ticket demand calls for it. A second phase would include a $39.5 million tower containing luxury suites, a stadium club, new press facilities and a new scoreboard, but funding sources have not yet been identified.
“I’ve maintained from day one that this is a proposal we can afford. It does not require any new student fees to pay for it,” said ODU President John Broderick. “In this time of well-deserved scrutiny on the cost of higher education, that was an important part of the decision I made on the scope and cost of the project.”
Bacon’s bottom line: The project may be fiscally prudent in that it does not require an increase in fees, which now stand at $3,076 per year. Almost $1,700 of that sum is classified as athletic fees. But two questions arise: First, are students getting good value for their fees; second, is ODU missing an opportunity to lower fees?
Let’s examine the economics of ODU football stadiums. As a benefit of paying fees, students get free tickets. What’s the value of those tickets? That’s hard to say exactly. Prices vary by seating, with the best seats costing more. But we can use the $199 price tag for new season tickets as a starting point. We’re not far off by assuming that a student’s annual fees entitles him or her to football tickets worth about $200 — assuming he or she attends every game.
But ODU has nearly 25,000 students. Currently, ODU allocates tickets to roughly 6,500 students, according to the Virginian-Pilot. Let’s assume that ODU bumps up the number of student tickets to 7,500 with the new stadium (allocating half to students, half to season ticket holders). That means fewer than one in three ODU students will have an opportunity to attend any given home game. Effectively, that means the value of “free tickets” to ODU students collectively has a market value of about $70.
When ODU calculates its student fees, how much does it charge students for “free” tickets? Is some portion of the fees allocated to supporting the football team and another portion allocated to paying for the stadium? Alternatively, are students charged a portion for the supporting the football program and the stadium as a package? Or does ODU even break out the numbers that way?
I called ODU’s press office yesterday afternoon and asked for numbers on how the administration plans to pay for the new stadium without increasing student fees. I have not yet heard back, but will report what I find out.
All we know at this point is what Broderick tells us: that no new student fees will be required to pay for the stadium. One of two possibilities seems likely: Either the university has cut expenses (renegotiating a contract, for instance) or it is cutting a program or programs previously funded through student fees. In either case, the opportunity existed for the university to reduce the fees instead of build a $55 million stadium. The university chose to build the stadium.
How much money are we talking about? Let’s say that the stadium will be constructed with bonds. Assuming a 30-year amortization and tax-free interest charges of 4% annually on those bonds, that works out to about $2.8 million a year. That averages about $120 per student.
If these numbers are in the ballpark, ODU students will be paying $120 per year to help finance a stadium and receive a $70 value in the form of football tickets in return. In other words, ODU students and their parents are subsidizing construction of the stadium to the tune of $50 per year for the benefit of season ticket holders.
Who are those season ticket holders? Many of them are alumni. Some may be Norfolk-area residents who identify with ODU and love a good football game. Whatever the case, football is a great way to extract money from fans.
As the Pilot reported in January, The Old Dominion Athletic Foundation has 3,000 paying members.
Essentially, all 3,000 paying members of the Old Dominion Athletic Foundation – the school’s private athletic fundraising organization – are ranked on a number of factors. They include how much money they’ve donated, how long they’ve had season tickets and how long they’ve been members of ODAF.
Based on this ranking, 1 through 3,000, fans are allowed to choose their new seats. The reallocation of seats, or “re-seating process” as ODU calls it, happens every [four years] four at Foreman Field. …
If fans increase how much they donate, it’s an opportunity to get better seats. And if they don’t, there’s angst because they’ll likely end up sitting a little farther from the action.
ODU last reallocated seats at Foreman Field in 2013, as the school began the transition into the Football Bowl Subdivision. The process proved to be a financial boon, with ODU raking in $1.5 million more in donations in the first quarter of 2013 than it did in 2012. Much of that increase was derived from fans trying to get better seats.
“I suspect that we’ll see an increase in donations this year as well,” athletic director Wood Selig said.
In other words, ODU will over-charge students in the neighborhood of $50 each, for an annual total of $1,250,000, to subsidize a football program that netted the university $1.5 million in alumni/fan donations in just one quarter. That’s what it’s all about, folks. If ODU plays its cards right, a new stadium will raise even bigger donations for administrators to play with. When will students figure out what’s going on?.