When University of South Florida officials presented an initial budget for a $340 million on-campus football stadium last month, chief financial officer Richard J. Sobieray stood behind the figures being used to justify one of the biggest decisions in school history.
“I’m a conservative CFO in nature,” Sobieray said then at the board of trustees’ finance committee meeting, “and I think if I had issues with this I would definitely express them.”
As the full board prepares for Tuesday’s vote on whether to authorize $200 million in debt for the Bulls’ proposed 35,000-seat facility, the Tampa Bay Times shared the financial projections with three academics who study stadium economics. Their reactions ranged from cautious optimism to downright disbelief.
“I don’t know if I’d call it economic malpractice,” said College of the Holy Cross economics professor Victor Matheson, who literally co-wrote the book on sports economics, “but it’s pretty close to it.”
Where the money is coming from
USF expects a few sources to contribute $140 million upfront: $50 million in donations through the USF Foundation; $31 million from the capital improvement trust fund (which generally pays for facilities through student fees); and $59 million from the sale of broadband equipment and licenses. No public tax dollars or state funds are included in the proposal.
The school plans to borrow the remaining $200 million over 20 years at an expected interest rate of 5.5%. That amounts to an annual debt service of about $17.8 million. Only nine schools in the country made larger athletic payments on debt, leases or rentals last year, according to the Knight Commission on Intercollegiate Athletics; only the University of Virginia was not among the two richest leagues (the Big Ten and Southeastern Conference).
USF intends to pay down that debt primarily through the new revenue streams a stadium will provide — things like concessions, naming rights and donations for premium seats. In order for the stadium to fund itself, that revenue must make $17.8 million more than its added expenses (like maintenance).
Concern No. 1: USF won’t make enough new money
Projections from a consulting group show $20.5 million in revenue against $5.3 million in expenses during the first year (expected to be 2026). Factor in the money USF would have earned from games at their current home, Raymond James Stadium, and the leftover $13 million isn’t enough to cover the debt. But that’s only the first year.
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The figure grows to $18 million in Year 10 and $24 million in Year 20. Matheson compared it to a common homebuying practice: buy the most expensive house you can afford now with the expectation that future raises at work will make the mortgage payments easier later.
Though Matheson accepts that general idea, he has a different issue with the numbers. In the 2021-22 fiscal year, the Bulls brought in $18.7 million in football-related revenue, according to figures submitted to the U.S. Department of Education. That means the stadium must essentially double the team’s revenue if it will pay for itself.
“It’s just not obvious at all to me that this new stadium will generate an extra $17 million a year in revenue versus their current situation,” said Matheson, the past editor at the Journal of Sports Economics and co-author of “The Economics of Sports.”
One option is to use the stadium for things beyond football and women’s lacrosse — a point Sobieray made at last month’s meeting. The possibilities are unclear until the designs are finalized, so they aren’t showing up yet in projections.
The University of West Florida’s Gil Fried is wary.
“It could be years before they get those additional concerts and things like that,” said Fried, who oversees the school’s sports management program as the chairperson of the department of administration and law. “That’s a lot harder to do than to say.”
Every stadium is different, but the $220 million Canvas Stadium that Colorado State University opened in 2017 provides some context into what USF might face.
In the 2022 fiscal year, the university counted $16.3 million in revenue from the new stadium against $2.8 million in expenses. That’s a net income of $13.5 million. After transferring $3.6 million to the athletic department and making the $12.6 million in bond payments, Colorado State showed a shortfall of $2.7 million. Reserve funds and COVID relief donations covered the gap.
Concern No. 2: The projections are intentionally rosy
Daniel Larson isn’t sold on some of the details at USF, like $8.3 million expected from donations for premium/priority seating. But Larson, an associate professor at the University of Oklahoma’s Department of Health and Exercise Science, said the overall revenue and expenses “don’t seem incredibly out of whack.” He does, however, question the source.
USF projections were done by the consulting firm Conventions, Sports and Leisure International. Reports like this are routine, and Larson said they’re almost always overly optimistic.
Fried is even more direct.
“I’ve never once seen a company that has been hired to do a feasibility study or a financial analysis and say, ‘Don’t build it,’” said Fried, who also edits the Sports Facilities & the Law newsletter. “If they say that, they’re not going to be hired again.”
Concern No. 3: USF continues to struggle with attendance
USF and the outside experts we consulted agree a stadium would lead to an attendance spike, at least for the first few years.
“You start having a losing record, and that could torpedo itself very quickly,” Fried said.
Even if the Bulls start winning after four consecutive losing seasons, other issues could arise. The projections call for $60 general tickets. Fried questioned whether that’s affordable for students.
The feasibility study assumes an average attendance of 31,130. The Bulls have hit that figure in only six games over the last four years; five came against big-name opponents.
Scheduling trends could make those types of opponents less likely to visit by the time a stadium opens. The Atlantic Coast Conference is discouraging its teams from playing road games against schools in midmajor conferences, like USF’s league, the American Athletic Conference. That decreases the odds that big local draws like Florida State University and the University of Miami will play at USF in the future.
If the SEC moves from eight conference games to nine, that’s one fewer nonconference game available for the Bulls. The University of Florida and the University of Alabama both cited the chance to play at an NFL stadium as one reason why they agreed to schedule USF. That selling point disappears if the Bulls move from the Bucs’ home, Raymond James Stadium.
USF and the University of Central Florida don’t have room on their schedules for a nonconference matchup anytime soon, so the Bulls will lose out on that rivalry gate, too. Will fans in a crowded sports market keep coming for games against Florida Atlantic University or the University of North Texas and what Matheson called a “distinctly lower tier of competition?”
Concern No. 4: The unknowns
Though every project of this scope comes with risk, this one has more uncertainty because of external circumstances.
Fried sees the potential benefit of an on-campus stadium to attract commuters or online students to dorms, where USF can rake in room-and-board revenue. But there are other factors to consider. Schools across the country are bracing for an enrollment cliff as the number of college-age people drops in the next few years. Women have traditionally been less interested in college sports than men, but they now make up 60% of enrollment.
“You’re making numbers right now,” Fried said, “but those assumptions can change pretty quickly, and that will significantly affect the revenue stream.”
So, too, will other issues beyond USF’s control, like new rules that allow athletes to profit off their name and image.
For years, schools built gaudy facilities to try to attract talented recruits. How much less important will those buildings be in the coming years now that players can be paid legally under name, image and likeness provisions? If the rules evolve so teams start paying players directly, the Bulls will have to address another major expense while paying off their $200 million debt.
“Those kinds of things all roll into a mess and make it kind of unsure what’s going to happen …” Larson said.
Then there’s the instability of the sport itself. It’s not hard to envision big-time college football breaking away from the NCAA. That scenario doesn’t bode well for a midmajor university like USF.
Neither does the way the Big Ten and SEC are concentrating power as Division I-A moves toward the possibility of one or two superleagues.
Perhaps USF needs to invest to have a shot at breaking through to a major conference when the next round of realignment occurs. Matheson rejected it as a “terrible” Hail Mary.
“You’re throwing $350 million on something that you know is going to lose money for you under almost any scenario,” Matheson said, “with a small percentage chance that you end up losing less.”
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