Penn State problem: Athletic wish list will be costly
- Penn State's athletics department Monday introduced its wish list for the future of its facilities.
- It was 20-year plan filled with new facilities, pedestrian plazas and a transformed Beaver Stadium.
- Penn State likely will have to raise well over $500 million to pay for everything.
Penn State's athletics department Monday introduced its wish list for the future, a 20-year plan filled with candy-store delights of new facilities, bright pedestrian plazas and a transformed Beaver Stadium.
Through its Facilities Master Plan, the product of a 17-month study, Penn State has created a distinct "athletics district" anchored by a new, 45,000-square-foot "Center of Excellence" and dotted with new places for student-athletes to train, practice and play. It's an ambitious plan, featuring more than a dozen new venues, along with extensive renovations to Beaver Stadium and Bryce Jordan Center, two of Penn State's most important sports sites.
It's clearly an expensive venture, and Penn State didn't divulge a price tag. Penn State likely will have to raise well over $500 million to pay for everything. As a result, Athletics Director Sandy Barbour added a measure of reality to Monday's reveal of blue-sky artist renderings and shiny descriptions.
"We will ultimately build what we can afford," she said.
As it emerges from the costly Sandusky scandal, Penn State's athletics department also is embarking on an extensive plan to modernize its facilities. Penn State has spent plenty on athletics recently ($129 million in fiscal year 2015) and is budgeting for more over the next 20 years.
Fundraising mix: Financing will require a mix of fundraising, debt service, corporate sponsorship and likely some student fees, which the self-funding athletics department normally avoids. In addition, Penn State will explore corporate sponsorships (potentially including naming rights) and public-private partnerships to fund the projects. Student fees could be used for new venues such as the natatorium and tennis center, which will be open for student use as well.
Penn State said that the master plan's first five-year building phase, which will include the "Center of Excellence," natatorium and other projects, will require $120 million in fundraising. A campaign for that will begin soon.
Potential budgets for the next phases, which will include the Beaver Stadium renovation, is "order-of-magnitude stuff" that Barbour said she is not yet willing to share. However, Penn State offered reference points to time and cost by noting one inspiration for the project.
Texas A&M model for Beaver Stadium: Penn State officials said that the Beaver Stadium remodel will be similar to what Texas A&M conducted in renovating its 102,733-seat Kyle Field. That project, completed over two offseasons from 2013-15, cost $485 million.
Kyle Field's overhaul included some of the same suite options, public spaces and facade changes that Penn State plans for Beaver Stadium. Populous, a Missouri architecture firm, led the Kyle Field renovation and produced Penn State's Facilities Master Plan.
Beaver Stadium's renovation, which Penn State officials said would take 3-4 years, likely will cost more than $485 million. Because of that, Barbour said that Penn State saved it for at least the second phase of the 20-year plan.
"Before we do anything with Beaver Stadium, we need to make sure we have that set both to be financed and to be designed and constructed in consecutive years," said Phil Esten, deputy athletics director.
Though Beaver Stadium's capacity is scheduled to be reduced, from 106,582 to about 103,000, revenue-producing suites and club seats will be added. According to the master plan, 84 suites, 127 loge boxes and 3,800 club suites will be part of the stadium. Barbour said fans requested expanded club options in surveys regarding Beaver Stadium's future.
Stadium may be home to more than just football: Revenue-generation is a component of the Beaver Stadium renovation. Penn State will host a concert this summer at the stadium and wants to hold more events there year-round.
Barbour said she has had discussions with the NHL about holding an outdoor hockey game and with international soccer officials about hosting soccer matches. Beer and wine will be available for purchase at such events.
Penn State seeks new revenue streams as its athletics budget grows. Since 2010, Penn State's athletics spending has grown by 27 percent, partly because of the NCAA and Big Ten fines imposed in 2012. But spending on athletics scholarships, coaching salaries and athlete services has gone up as well.
To Penn State's benefit, football revenue has increased (to $75.5 million in fiscal year 2015) as media rights contracts and conference distributions grow. Penn State finished fiscal year 2015 with an athletics surplus of $2.9 million, a sign of recovery from the 2010-12 stretch when the department went from a $14.7 million surplus to a $6 million deficit.
"I think the overall picture is about debt and being very, very prudent about how you use that," Barbour said. "That's something that all of us in intercollegiate athletics today are making sure that we're being really smart about in terms of leveraging our futures."
FUNDING PENN STATE SPORTS
Penn State's athletics budget has grown substantially over the past six years, peaking in Fiscal Year 2015.
FISCAL YEAR, REVENUE, EXPENSES, SURPLUS
2010, $116,118,025, $101,336,483, $14,781,542
2011, $108,252,281, $107,389,258, $863,023
2012, $104,751,464, $110,737,200, $(-5,985,736)
2013, $117,590,990, $117,440,639, $150,351
2014, $125,720,619, $122,271,407, $3,449,212
2015, $132,248,076, $129,349,149, $2,898,927
Source: Penn State athletics financial filings. Penn State's fiscal year runs from July-June.