4/19 9:00 AM - Cal PROVIDES OFFICIAL RESPONSE, LINK AT BOTTOM OF THIS POST
12:00 NOON: UPDATE - AT THE BOTTOM OF THIS POST IS A RECAP OF THE CONVERSATION I HAD WITH RACHEL BACHMAN EARLIER TODAY
Today the Wall Street Journal ran Cal's Football-Stadium Gamble, a very critical look at the funding behind the project to renovate and seismically upgrade The University of California’s 90 year old Memorial Stadium. It’s a simply brutal article. To be clear, the project is behind pace in meeting its financial goals and that is worrisome. I fully welcome and encourage journalists to take critical looks at major projects like these. But I expect the article to be fair, not just present facts in the most negative manner, get other facts wrong, take quotes out of context and give the harshest critic the lion’s share of space.
The article immediately starts off with a misrepresentation of the ESP plan:
But three years into the fund-raising effort, a projected $270 million from the sale of seats has failed to materialize. At the end of December, the school had collected only $31 million in the first three years of the sale. Now it has become clear that the university will have to borrow the vast majority of the money.
Two things are wrong with this. One, it makes it sound like Cal had expected to "collect" the $270M in ESP sales by now. That is simply wrong. The $270M is over the life of the ESP. So those numbers are completely out of context and paint a far worse picture than what is the reality. Secondly, it is not clear at all – not at all – that the University will have to borrow a majority, let alone a "vast" majority of the money to cover the project.
I'll continue after the jump.
Now we move into story telling that doesn’t accurately represent the situation at Cal.
Cal hasn't won its own conference outright since 1975, hasn't played in the Rose Bowl since 1959 and doesn't routinely sell out its stadium. (The school is reducing capacity in the renovation to roughly 63,000 from about 72,000.)
It’s the last part that gets me. Yes, while it’s true that Cal has not regularly sold out its home games, in the abstract that doesn’t mean anything. What matters is the actual numbers. And since 2004, Cal has averaged over 60K people per game and in two of those years averaged 64K+, or more than what the new seating configuration will accommodate! Reading that paragraph, with its parenthetical, makes it sound like Cal is pulling a Stanford and reducing stadium capacity because it can’t sell tickets. My contention is that a responsible journalist, since it’s so key to the point of the article, would have included those attendance numbers, along with the remarkable increase in revenue over that time that football has generated.
Then there is this:
"The nearly half-billion-dollar Cal athletic project encompasses a $321 million renovation of Memorial Stadium that opens Sept. 1 and $153 million for a new multisport training facility. That's far more than Stanford University spent building a new stadium in 2006."
This is as aggravating a piece of journalism as you can have since it is a completely Apples to Oranges comparison. Of course, on its face it’s more than what Stanford spent since we’re also building the Student Athlete High Performance Center.
Add to that, Stanford Stadium is 20% smaller than Memorial. It is on private land, which completely changes the approval and permitting process. It doesn’t sit on a fault line requiring extensive seismic work. Unlike Stanford Stadium, California Memorial Stadium is on the National Register of Historic Places which necessitated its own requirements and expenses. For my money, that paragraph and assessment belies a slant. And it continues:
The total bonded debt for the project, including the training center, will be $447 million. That's apparently an unprecedented amount of borrowing for a college-sports project, far above the $220 million that Minnesota borrowed to build a new stadium in 2009, the $200 million that Washington has borrowed for its stadium renovation and the $148 million that Michigan took out to add luxury seats that opened in 2010.
None of those locations has the seismic requirements of Berkeley, which is obviously a huge part of design and construction cost. In the case of Minnesota they started from scratch, always cheaper than when you have to preserve a historic structure, and they have a much lower cost base. And in the case of Michigan, OF COURSE IT’S LESS since they were only adding luxury seats. Except adding just those luxury seats is almost half the cost of our entire stadium project. Again, I get what she is doing there but without context it’s not particularly helpful or good journalism. And even though Washington's Stadium is located in an area with some seismic activity, only 4%of the cost of new Husky Stadium is for seismic upgrades!
It was also surprising that the reporter barely included quotes from our Athletic Director and that one of the quotes she did include was on out of context and old quote Sandy made somewhere else. It's made worse worse by the inclusion of this:
Even some ardent fans say they're confused and concerned about how the renovation will be funded. "If you read what they say, they always say, if there's a problem and things aren't going to expectations, we'll make adjustments," said Hank Gehman, a longtime season-ticket holder and retired contractor. "I'm just wondering what those adjustments will be. Where will they get millions of dollars a year to cover the shortfall?"
What the reporter doesn't tell you, is that this "ardent fan" is actually a NIMBY who has been opposed to the renovations. A simple Google search would have revealed multiple columns and opinion pieces by Mr. Gehman not only firmly against the University, but distorting the University's positions. It's shameful that the reporter didn't give Sandy better opportunity to present our position. But it's hard to fathom that she either didn't do the research or have the critical judgement in her reporting to better qualify this "ardent fan."
Finally, in an attempt to try and muster some conflict between athletics and academics we have this:
But the television deal also requires Cal to do something unprecedented: play a Friday night home game every other year. This change recently created more controversy on campus after an academic official asked instructors not to schedule midterm exams on Nov. 2, the date of the first such game.
"To ask people not to have midterms seemed like the inappropriate thing to do," said Alice Agogino, a professor of mechanical engineering who sat on the stadium committee in its early planning stages. Balancing the athletic books "shouldn't change academic priorities for the campus," she said."
To the casual reader it sounds an awful lot like Cal was asking for midterms to be canceled (as reinforced in Professor Agogino’s quote). That was not the case. Cal was not suggesting that midterms be canceled, only that they not be held on that particular Friday. Hardly an unreasonable request made more than 9 months out. Further, by having the Friday game, Cal managed to avoid having a Thursday game in Berkeley, which would have had far more negative impact on the campus.
There’s no sugar coating this. This is a brutal article for Cal. It would have been better had it either not come out or had Cal done a better job in positioning the issues. I welcome journalists approaching subjects with a critical eye. Democracy depends on that. But we should expect and demand that they do so fairly while giving each side equal representation. The article failed abysmally in that regard. But it is what is it; let’s see how Cal makes this right.
UPDATE: Earlier today I had a phone call with Rachel Backman, the reporter who wrote the story. I sent her an email this morning with a link to this rebuttal and she was gracious enough to call me back. My strong take from the call is that she does not have an axe to grind. While she lives and has written for an Oregon newspaper, she is a Michigan grad.
To be sure she is skeptical of the financing of the stadium, and as I have said I believe that is a healthy thing. She questions whether or not ESP is really an "endowment" program since it relies on people to continue to pay for their seats and they can opt out at any time. That is a fair point to raise.
She agreed with me that she should have better identified Hank Gehman. She didn't realize he was so anti-Stadium.
We discussed her comparisons to other stadiums. We agreed to disagree on this. As I said, I understand what she was trying to do but the comparison were just totally off, other than being football stadiums. I said it would like be comparing the cost of building a 3000SF home in San Francisco with doing so in Minnesota... She agreed, but still wanted to convey the dollars involved on a comparative scale. She felt she address the earthquake issues earlier in the article.
To me, one of those most disconcerting issues is she thinks Cal has real problems with its PR. For instance, I asked her how she decided to include the point about Cal not selling out a lot of its football games. I mean, we all know that, but it wouldn't be something people outside the area would necessarily know. She said she researched attendance #s and then noted while reading some Cal press releases that when there was a sellout against Tennessee and Oregon for example it was noted, BY CAL, how rare the sellout was. (full disclosure: in the past I have comment to Cal SID how unnecessary and counterproductive including such information was). She also said the Athletic Department had done very little to reach out to her, others were far more accessible for her to speak to.
Anyway, I just wanted to give you some insight into this. While I don't agree with the tone of the article, I am satisfied that the reporter was in fact trying to be fair. I am most frustrated because while I think this article was going to be critical, Cal could have done a far better job of positioning things.
Cal has received $31 million in cash from ESP sales to date. Does this mean the $270 million goal for the program is not realistic?
About 85 percent of ESP participants have chosen to spread their payments over time, which means they are paying annually up to 30 years. As of December 31, Cal had received $31 million in cash from ESP sales, which corresponds to a total projected value of over $144 million to be paid by the end of the payment contracts. The original goal of $270 million remains. The plan has always been for the Athletic Department to use its operating revenues to make debt payments on an annual basis over the next 30-35 years.