Heard about this yesterday at a volleyball tournament -- article is not behind a pay wall. Don't like the sounds of this.
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Sounds like mismanagement played a role in this. Baseball and sports aside. There are likely too many schools/colleges and some need to shutter. As high school kids focus on skills/trades and shy from student loans this will continue.
We will always have a need for 4 year universities, but, as younger people become cost conscious regarding loans, there will continue to be a pull back.
Combine this with a massive drop in college age kids coming up.
Some D3 schools have very large sports teams, to bring in paying students. That doesn't seem to have been the case here.
When looking at schools for my youngest son, I found the Forbes College Financial Grades:
https://www.forbes.com/sites/e...ges/?sh=310641b71097
They give a letter grade for the financial health of hundreds of private colleges and universities, from A+ to D. Birmingham Southern has a C-, and is listed among the "Dunces" - schools whose ratings dropped a lot in one year.
Probably worth checking out if you are looking at small or private schools.
Our 2024 recently committed to a D3, and we definitely looked into the financials, enrollment histories, etc. of the schools. The demographics simply don't favor schools with low endowments (or large decreases in endowment values) and shrinking enrollments. One school we liked used a significant chunk of its endowment to pay off debt, which was a more of a "sideways" move, but it also made some other blunders in the past few years which were acknowledged but still a problem. Nonetheless, this school was scratched from the list.
In a post earlier this year I had mentioned that we looked at financials/endowments and was asked as to why it mattered. A college's financial stability is important -- we don't want 2024 matriculating at an institution that has to start cutting academic/athletic programs to make ends meet.
The privates aren't the only ones having issues -- the University of Arizona situation is certainly getting unwanted attention as noted in the link posted by @CollegebaseballInsights...
The sister (public) university of where my wife and I graduated had an enrollment of almost 25,000 when we were in college -- more than double our school's. That school's enrollment is now about 50% lower, and is smaller than our university's. That same school, while now smaller, still receives about 2/3's of the funds allocated to the system by the state, and recently had to borrow $30 million from our school, which had the money to loan. A history of poor decision-making led to this situation, and that school's current regime doesn't appear to by any closer to solving the problem. The state's financial situation isn't helping, either...
I don't think people fully understand the looming debt bomb for federal/state governments and businesses. High interest rates are probably going to be around for awhile. Usually the government will be able to drop rates to restimulate the economy once a recession hits. But with the huge current fed debt load, a recession will result in falling confidence in the US dollar and the typical buyers of bonds will demand higher interest rates to assume the credit risk. So rates may not go down this time. Already you can see foreign governments dumping US bonds and not buying new issuance. All this is going to severely pressurize colleges with high debt loads when they have to refinance into higher rates. And state universities may not be spared either. That Forbes grade article is great stuff; thank you. Pick your kid's school wisely.
@CollegebaseballInsights posted:
Highlights - what does this even mean?
Johann Rafelski, a physics professor at the school, urged Robbins [UA president] to consider selling the athletics department to an outside vendor, which Robbins noted that he has considered in the past. Doing so, Rafelski added, could help the athletic department turn a profit. “People who are qualified to run an athletics department may turn it into a profit,” Rafelski said. “We could perhaps get a good sales price.”
Although Robbins said selling the athletic department to an outside vendor is an option on the table, he also noted that the university could lease some of the school’s land to bring in income.
If they did that, would athletes be employees, finally?
From a different article:
Robbins cited two major problem areas: the athletics department and financial aid.
During the Covid pandemic, the university lent $55 million to the athletics department, using money from cash on hand. The loan has not been paid back fast enough, Robbins said. Now the athletics department “is going to require some draconian cuts, and we’re just going to have to live with that,” Robbins said. It’s possible Arizona will eliminate some of its 23 sports programs.
And now the athletic director of Texas A&M, talking about who is going to pay Jimbo Fisher's $77 million buyout:
Bjork said the 12th Man Foundation will use unrestricted funds to cover the initial $19.3 million payment. The athletic department will pay the annual distributions to Fisher for the rest of the contract “by growing our revenues and adjusting our annual operating budget accordingly.”
@anotherparent posted:And now the athletic director of Texas A&M, talking about who is going to pay Jimbo Fisher's $77 million buyout:
Bjork said the 12th Man Foundation will use unrestricted funds to cover the initial $19.3 million payment. The athletic department will pay the annual distributions to Fisher for the rest of the contract “by growing our revenues and adjusting our annual operating budget accordingly.”
Texas A&M got a 160mm check from their donors over the weekend to the athletic department.
https://fansided.com/posts/tex...-jimbo-fisher-firing
They'll be fine.
I was actually at Texas A&M for a wedding the previous weekend and watched them lose to Ole Miss at one of the bars. To say there were some unhappy people would be an understatement.
This is the wildest sports story of the year, IMO.
Schools can't pay their bills, students have issues securing loans for their education, but the 12th Man Foundation of TA&M is using unrestricted NIL money that should go to athletes just to get rid of the football coach they couldn't live without!
And apparently his contract does not have an offset clause. So they'll be paying him when he's the next coach at Georiga.
@nycdad posted:And apparently his contract does not have an offset clause. So they'll be paying him when he's the next coach at Georiga.
Jimbo will never coach again at a top P5, at least not as a HC. He won at FSU when he had Jeremy Pruitt as his DC, Tim Brewster as his bagman, Dameyune Craig, and a couple other elite coaches. And he had Jameis Winston. When those pieces were gone, Jimbo was a trash coach.
Is it really necessary to keep it open? I know they have good baseball and what not but why keep pouring money and aid into a school with less than 1000 students? At what point do you just say this didn't work - too bad.
@PABaseball, Birmingham-Southern is/was an excellent academic institution, but, no, poorly managed institutions don't deserve a life raft without a change in leadership. Even then, this school looks like it may be too weak to bring it back to life. Right now it is in discussions for $5 million loans with the city and securing private loans. With no change leadership, this looks foolish. The city has a strong interest in keeping the college open, though, as its closing would impede/jeopardize the plans it has in place for development in that part of town. It will be interesting to see how this plays out as it may serve to be a template for others...