davidlee Posted December 18, 2003 Share Posted December 18, 2003 http://www.stltoday.com/stltoday/news/stor...built+on+easter This is in today's Post about new arena. Quote Link to comment Share on other sites More sharing options...
kwyjibo Posted December 18, 2003 Share Posted December 18, 2003 "University officials want it open for the 2005 season to coincide with the university's switch to the Atlantic 10 conference, which has a higher profile than Conference USA." What does the word "higher profile" mean in this sentence? Competitive success, media contracts, Dickie V. mentions?? This simply is not true. "The university plans to borrow about $25 million to be paid off with revenue generated by the arena." This should concern anyone who truly cares about SLU as an institution. Sadly it seems not to. SLU is a wealthy enough institution to weather this but it does not need to. Those "rodeo and circus" events do not inspire much confidence in marketing knowledge. Quote Link to comment Share on other sites More sharing options...
BillikenButch Posted December 18, 2003 Share Posted December 18, 2003 What is wrong with promoting where we are going? I will assure you the A10 will much higher profile that CUSA in 2005. And so the University is borrowing less than 36% of the cost to build the stadium. As someone who is looking out for the best interest of the institution, I have no problem with this. Please enlighten me as to why this is a problem. (maybe you can sway my opinion) Quote Link to comment Share on other sites More sharing options...
Billiken Rich Posted December 18, 2003 Share Posted December 18, 2003 senitment in this forum for a while. Too much capacity is the usual complaint. To heck with Savvis but please keep the rodeos out as long as Tom Frericks is on the team. Quote Link to comment Share on other sites More sharing options...
kwyjibo Posted December 18, 2003 Share Posted December 18, 2003 You are right that the A-10 will have a higher profile in 2005 but that is not what the article said. I admit I did not see it in that light so the problem is bad writing/editing. As for the university taking on debt that will be explicitly paid off by the arena that cannot net nearly enough to cover it, it cannot be good. They will obviously be able to generate a lot of gross revenues but there are high costs involved. Adding low net revenue events like circus and rodeo (even when they get people in the seats cost a lot of money to produce) do not inspire much confidence. I am specifically worried about the impact on the basketball team as well because after the initial honeymoon of the new arena is over, there are a lot of risks of "carrying the water" for that kind of debt. This is why some decent teams have to go be the payee to another program, this is also why some teams cheat. Quote Link to comment Share on other sites More sharing options...
billiken_roy Posted December 18, 2003 Share Posted December 18, 2003 $30,000,000 to pay off. i dont pretend to be a commercial lender or understand revenue bonds in the least. but to try to simplify it on a retail level which i do every day in my job. let's just say they finance the $30m at a rate of 7% for 30 years. (the fact is the actual rate will be much less than that and i am betting it will be retired much sooner than 30 years, but just for example sake.) that is an annual payment of approximately $2.4 million dollars per year. let's not even look at the revenue from rodeo's, concerts, the circus, etc. let's not even look at women's basketball or volleyball. good chance they will barely cover the costs. so let's just say the billikens have to pay the debt with the men's basketball program. i believe this year there were 17 games at the savvis. so let's use that number. 2,400,000 divided by 17 equals about $142,000 per game. if the average ticket price is $15, that equates to 9500 fans per game to "pay the rent". of course with that comes expenses for personell and revenue for concessions. but one would think they could at least wash. it also doesnt take into consideration that the billikens will generate additional income with advertising rights, corporate sponsors, and luxury suite money. it doesnt take into consideration that the billikens will add to their season ticket base just because of the exciting new environment. it doesnt take into consideration that the new arena will probably increase annual "gifts" from boosters as well. and like i pointed out before, we havent even touched on the revenue that can be generated by "non-billiken" events that can now be held there that before were going to the savvis, the eddydome, or the family whatever arena in st charles. the fact is, this is almost a guaranteed winner from where i sit. plus biondi is wisely going to use the leverage of the equity he will have in the facility to spread this over time. at one time i was a big opponent of the arena. but imo, father biondi has done everything right to make this happen and it seems like a no lose to me assuming they indeed raise the $40 million upfront. if my math is flawed, please correct me because as i cautioned up front, commercial/civil finance is not an expertise of mine. Quote Link to comment Share on other sites More sharing options...
willie Posted December 18, 2003 Share Posted December 18, 2003 SLU will issue tax free bonds. The university is a AAA credit. Current rates would put the rate at about 4.75%. So you need to bring your numbers down. Quote Link to comment Share on other sites More sharing options...
jjray Posted December 18, 2003 Share Posted December 18, 2003 >SLU will issue tax free bonds. The university is a AAA >credit. Current rates would put the rate at about 4.75%. So >you need to bring your numbers down. Willie sounds like a banker. Good post. Quote Link to comment Share on other sites More sharing options...
billiken_roy Posted December 18, 2003 Share Posted December 18, 2003 as i said willie, i was using very conservative numbers. my point was that the tickets sold number will be easily attained as our season ticket base alone will cover the bogey needed to sustain the payment. at 4.75% the attendance number needed would drop to about 7500. Quote Link to comment Share on other sites More sharing options...
billiken_roy Posted December 18, 2003 Share Posted December 18, 2003 i saw sluer getting a little excited last night early in the game on an out of bounds call that occurred right in front of you last night. cant you control that guy? ;-) Quote Link to comment Share on other sites More sharing options...
willie Posted December 18, 2003 Share Posted December 18, 2003 I thought the call was correct. Some guys just get carried away. By the way the guy who won the car was Jan's significant other. Quote Link to comment Share on other sites More sharing options...
davidnark Posted December 18, 2003 Share Posted December 18, 2003 I would expect attendance to average over 10,000/game at the new arena. I would also expect significantly increased revenue from the luxury suites being added. SLU will keep the bulk of the money for parking, concessions, advertising, etc. SLU will save over half a million dollars/year on rent payments to the Saviss Center. There is also a huge indirect economic benefit if the arena brings more on-the-court success; this success will result in an increased share of NCAA money and significantly increased exposure for the university. Quote Link to comment Share on other sites More sharing options...
billiken_roy Posted December 18, 2003 Share Posted December 18, 2003 the look on your face while sluer was giving it to the ref was priceless. i was lmao. Quote Link to comment Share on other sites More sharing options...
kwyjibo Posted December 18, 2003 Share Posted December 18, 2003 I am not an expert on the details either. My concern is born out of my natural fiscal conservatism. I have read plenty on the economics of sports to know that dozens of cities and universities have been bamboozled by boosterism. Public universities (who by statute must open the books) show either significant levels of support beyond what SLU has currently or losses. I know UMass loses around a million a year on the Mullins center (hopefully SLU can learn by a key mistake they made and not lock themselves into a high cost event host). I have no major quibble with your estimates (and appreciate the effort), except you sleight the costs of the events themselves (they are most definitely not covered by advertising revenue). There are ways to hide some of these costs in other budgets but overall it will hurt SLU (the cost of security and traffic control alone is not cheap). They are higher, the point is that most arenas have trouble generating net revenues even with pro schedules. I do think SLU has looked at this but see the losses as acceptable (I don't but its not my money). I do think the location near the highway was a very smart move to increase advertising revenue. Hopefully, it will also reduce the disruption of the campus surrounding. Also, I hope the new arena increases attendance and SLU spirit. I just think it is unnecessary as long as Savvis exists so close to SLU. I know SLU has the means and financial strength to carry it off but that does not mean it is smart move. My concerns for the basketball team directly are not motivated at all by cynicism. Quote Link to comment Share on other sites More sharing options...
Schasz Posted December 18, 2003 Share Posted December 18, 2003 There have been some follks (seems like the same ones too) that have been against the Arena project from day one. That's OK as it is a free country, but this project looks as good as a sure thing to me. Hopefully, most everyone will jump on the band wagon, and I will most definitely be making a visit to St. Louis to see some games at the new Biondi Palace...looks like 2005 season. Quote Link to comment Share on other sites More sharing options...
sluer Posted December 18, 2003 Share Posted December 18, 2003 Willie was blocked out. I was closer than the ref. Somebody has to help them. Having said that, I wish that we would have had that crew for the AZ game. Quote Link to comment Share on other sites More sharing options...
kshoe Posted December 18, 2003 Share Posted December 18, 2003 they were so bad. those guys weren't going to let us win no matter what. Quote Link to comment Share on other sites More sharing options...
davidnark Posted December 18, 2003 Share Posted December 18, 2003 Supposedly, the consultants and administrators at SLU crunched the numbers and concluded that if they received approximately $40 million in donations for construction, the annual revenues (conservatively estimated) would cover the debt and operational expenses. The old cliche says you have to spend money to make money. The university believes it is taking a calculated risk that this expense will pay huge dividends for the university in the long run. Quote Link to comment Share on other sites More sharing options...
billiken_roy Posted December 18, 2003 Share Posted December 18, 2003 i have to agree with david. as my rough numbers indicate, 7500 per game attendance will alone pay the mortgage. (i am guessing our current season tix base is over 10k and it will surely grow with the new digs) anything over that plus profits on concessions, sponsors, etc. will pay the overhead and personell. then you would hope any outside promotions would be considered on an event by event basis and be a sure money maker before booking. there was a reason they said get 40 million in hand first. had to be the safe number. if umass built with a much larger debt, i guess they were a little reckless. so far, i have never seen father biondi put slu in such a position on any project. Quote Link to comment Share on other sites More sharing options...
kwyjibo Posted December 18, 2003 Share Posted December 18, 2003 Thanks for letting other people speak. It is mighty big of you. Would you prefer I ask your permission to think what I am thinking because that would be complicated (and not terribly nice)? Quote Link to comment Share on other sites More sharing options...
kwyjibo Posted December 18, 2003 Share Posted December 18, 2003 UMass is NOT losing money on debt. It is losing money on operating expenses. It is possible SLU will not have these problems but your calculations do not take them into account. Are the women going to play at the new Arena? (I think they should, but that means losing money each game). Quote Link to comment Share on other sites More sharing options...
billiken_roy Posted December 18, 2003 Share Posted December 18, 2003 just because there is a game at the arena doesnt mean the same "staff" will be present. i go to the women's games occasionally now and they have hardly any what appears to be paid personell working the game, or if they are paid, i would guess they are paid much lower than a men's game. they use a student as the pa announcer. they have students taking money. i have never seen an "usher" at a women's game or a policeman. when they sell concessions, it is usually what appears to be a student group manning the small stand. the point is, those games that are going to draw less will have less overhead assuming we have some fiscal sense running the show. i am betting that slu at least breaks even on the women's basketball and volleyball games "operating wise" now and i would see no reason that would change. now if we come to a women's game and all the concession stand portals are open and 3-4 workers are just sitting there shooting the breeze due to no traffic, then i got a problem with that. Quote Link to comment Share on other sites More sharing options...
Schasz Posted December 18, 2003 Share Posted December 18, 2003 Pretty freakin testy aren't we...my suggestion...take a cold shower. Quote Link to comment Share on other sites More sharing options...
Tonka Posted December 18, 2003 Share Posted December 18, 2003 This arena thing has been sliced and diced for many many years. This arena became a reality when it did for more reasons than any of us know. It has been pushed and fought against for lots of years. All things finally lined up for this to finally happen. I can assure you that when they looked at ROI, they looked at it both internally and sought professional guidance externally. I'm confident during the assessments and analysis, that conservative figures and hard dollars were used and countless data from outside factors and other projects were analyzed, reanalyzed and then analyzed again. Aside from all of that, if anyone believes that this program would have gone to the next level, without this ever happening, they are wrong. Sure, this program would have gotten better and better with the resources it has now. But if you look at everything, we needed this to happen to go to that next level and consistently stay there. It's all beginning to happen and with my connection to the universe, I feel I had a part in it all! Quote Link to comment Share on other sites More sharing options...
Basketbill Posted December 18, 2003 Share Posted December 18, 2003 I think the A10 does indeed have a higher profile today than the CUSA. It has a better future as a basketball conference than CUSA. You cannot look at CUSA without acknowledging that is is going to collapse as a Basketball conference in one and a half seasons. It is signed and sealed at this point. CUSA will lose arguably its top seven schools in basketball (not counting depaul). Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.