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Tell me if I'm way off base on this, but it seems our Athletic Department has accumulated some serious debt in regards to facility upgrades over the past few years. I sat through a few lectures in my sports management class at USC this past semester, and it seemed that the guest speakers (who are in our athletic department) without saying it outright, insinuated we will be paying off debts annually for the next thirty years on bonds because of our recent upgrades.
This is all good for right now, but my question is....if we need to make major upgrades 15 to 20 years from now, which we most likely will because of the progression of college sports, will we be able to do so? Or will our payments on these debts handicap our AD's in the future?
Not really important for the immediate future, but I'm just curious. Maybe I'm completely wrong, but thats what it seemed like to me as I listened to these lectures last year.
This post was edited by uscguydude 22 months ago
I guess it's the same if you buy a house and are paying off the mortgage in 25 to 30 years will you be able to afford maintenance on your house in 15 years what do you do? Hopefully the upgrades will pay off in championships and other things which will increase ticket sales, attendance more apparel will be sold. More kids will go to USC which is more tuition money and you get money from many different avenues like alumni and donations from boosters that make the upgrades worth it.
I look at it as... Could we afford not to?
I also herd that in the long run we did this at the perfect time....because building cost were down due to the economic downturn.
A third thing...College football is experiencing an explosion right now. The money we recieve will only increase.
All in all..I think we had perfect timing and are building with a comprehensive plan...not piece meal....as in the past. In the long run...it will pay off.
With the $$$ in College Sports, football, growing the way it is I do not see this being an issue at all. I am assuming we are locked in a certain rate on these bonds. So with increasing revenue but stable debt, the debt should be paid off sooner or there should be cash for upgrades in future. The Income will keep growing and growing (faster if we keep winning) while debt is decreasing equals paid off in sooner than 30 years.
and typically Elephant in the room means everyone is talking about it but just scared to ask the person in charge (Hyman). I really didnt see anyone talking about this non-issue until you brought it up so its not really an "elephant in the room"
Uh, no. You're completely wrong. An elephant in the room is the very obvious problem that people just try to overlook and avoid dealing with. They're not talking about it at all. It doesn't mean I agree that the debt situation is an elephant in the room, but the OP was in the right context when he asked about it.
Remember, we turned a profit of 3 mil last year. We will have the money to payoff the debt, which is a record low rate. We will be fine
My son's message to Obama, Clemson, and Georgia
College football at the SEC level is business, big business. And in business it is all about investment, return on investment and cash flow. Right now, and for the foreseeable future, USC is in a business with increasing cash flow and strong return on investment. The SEC is waiting for all the lesser conferences to finalize their newest TV contracts and then will expect their deal to better all comers. If you've read some of the articles on outkickthecoverage over the last couple of months about what sort of value the SEC TV deal might be worth then you can easily believe that USC would be foolish NOT to proceed with the investments in these facilities. The numbers are staggering (you have to go all the way back on the site to April to read all the articles speculating on the TV deal).
If USC is getting $60 or $70 million from a TV deal a few years down the road then we'll be very happy that we undertook these projects when they were relatively cheap. The only downside to that much money is our state legislature will likely be scheming on how to get their grubby, greedy little fingers on some of it.
My point was and is that it is normally management that tries to overlook or avoid dealing with said issue. The regular employees are typically talking about the issue but do not want to bring it up to management and management does not want it brought up thus making them address "the elephant in the room". I guess I could of worded it different but not completely wrong...give me 5% credit at least.
but atleast we can agree that this topic is not really an elephant in the room.
This post was edited by KAHWood 22 months ago
Long term capital projects by major corporations are typically financed through debt. There is little to no sense in being fixed asset rich and cash flow poor for these corporations, including USC. Just becuase our rivals in the upstate think like mom and pop, stash the cash under the mattress, and build a bomb shelter in the backyard financiers doesn't mean the smart business people at USC have to. My advice to the OP would be to stop letting uninformed rivals influence your ability to learn/think.
Having said all of that, I think the real elephant in the room is how does USC motivate the city of Columbia and Richland County to beautify the area surrounding the stadium? We're doing our part with the Farmers Market, tearing up the parking lot, and the future of the old ETV building. The condos are there from private developers. The state faigrounds did a good job of sprucing up. It's time the city and county threw some resources down toward the most traveled part of Columbia.
THAT will never happen, the City of Columbia and Richland County are a LEECH on USC, sucking blood and giving nothing back.
You're probably right. If the community doesn't find it important, things will probably stay status quo. In the past, we probably haven't done enough to voice the importance of this issue to our elected officials.
Though, we need to figure out a way to make it happen instead of harping on the past. I'm sure it's not for a lack of effort on behalf of Hyman and Co. Politicians always cave into the public wants, it's how they stay elected. A motivated, well organized, polite but consistent throng of USC grads living in the community who find this issue important would probably work.
I do agree that the area needs to be improved, but, other than buying up the warehouses, what would you suggest government do to help out? Subsidize renovations for them? Sidewalks and oaks? There isn't much publicly owned land there that I can think of.
I also don't have time to teach you how to speak hobo.
OP: If there is another project, 15-20 or 25-30 years from now, we will simply issue another set of bonds and a portion of the proceeds from that debt offering will most likely be used to pay off the remainder of the debt USC is currently carrying.
They could start by building bridges over or tunnels under the existing, well traveled railroad tracks on Assembly and Rosewood. The next thing would be burying the power lines. Those are two expensive, but long term ventures that would greatly help to better position the area for the future. The city and county probably wouldn't have to foot the whole bill.
When we start getting 25-30 mil in TV money as opposed to 17, we will be in good shape.
I'm not worried about it.
I wouldnt be worried about it even if we didnt get a bump in TV revenue. The current concern is that USC is highly leveraged and carrying alot of debt but with interest rates where they are and the direction the program is headed, it was the ideal time to do it.
USC isnt even on the verge of failing and we arent so overly leveraged that we have put ourselves into a corner for the next several decades. Large, publicly funded institutions (and smaller ones for that matter) use bond financing to fund growth initiatives like this. We havent gone over board by any means.
Bottom line: THERE IS NO ELEPHANT IN THE ROOM.
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