PASSHE Institutions Merging

[iupgroundhog]

Same reason Cheney did.

Cheyney has redefined itself and its mission (albeit with a whole lot of help). Going to a model of bringing in African-American students from modest means to focus on academics and personal development is the way forward they chose and it appears to be working better than anything else they did in the past. At Cheyney, there is a bigger picture than having a football team, just because it will bring in $1 million in revenue per year. Trying to be like everyone else, following the standard model, did not work for Cheyney over the course of a long, painful period of time.

Plus, I would say their small enrollment played a factor. If you have only a few hundred students and you go with a slate of sports teams and end up with half of your student body being there because of athletics (see Seton Hill), well, that simply does not fit the new Cheyney model.

The bottom line is that Cheyney is rehabbing their situation pretty well without intercollegiate athletics (I know they have some programs on a limited basis) and the overall future success of the institution, or salvation of it, outweighs any 'revenue' derived from enrolling football players.

[boatcapt]

I get that academics (even business and economics faculty) are generally not businessmen nor think like them, so I don't expect them to always make the most astute business decisions. But universities also employ executive-level business managers and internal data managers. Cheyney's president is not an academic - he was an executive with Highmark. He's actually a Cal U alum too. But cutting athletics was a really short-sighted decision I've railed on before. He balanced the budget but he didn't fix the revenue shortfall that caused the budget issues. The more difficult, smarter decision would have been to create a plan to run athletics as efficiently as possible to maximize net tuition revenue. Their biggest challenge is turnover in students & coaches. There is almost no scholarship money and facilities are pretty bad, so coaches leave. Students also leave plus their target demographic is the most vulnerable to dropout. Good players transfer.

In the merger plans, both conglomerate task forces researched the possibility of cutting athletics at 2 of 3 campuses because everyone thought "Hey we're cutting millions of dollars in expenses!" But then they realized that nearly all students will transfer when you cut their program - even those within a year of graduation if they have eligibility remaining - thus making the revenue shortfall even worse.

The PASSHE schools don't have a spending problem, even though to some it appears that way. They have a revenue problem - and the revenue problem is because they have an enrollment problem. The enrollment shortfalls keep getting compared to 2010. That doesn't seem like that long ago but it was also at a significant demographic peak in high school graduates. Every PASSHE school had their highest enrollment to date in 2010. But similar to comparing life to pre-pandemic life, we have to go back to pre-peak enrollment of the late 90s and early 00s to see where everyone was relatively stable and private schools weren't using 50% coupons to lure middle class students. If the PASSHE schools could get back to their 20-25 years ago enrollment (which some say is attainable), they would be in a VERY different place financially.

Sounds like my ex-wife. She didn't have a problem spending my money...The problem was that I didn't make ENOUGH money to cover her spending!!!!!

[boatcapt]

I'll post something internal for a particular PASSHE school. In FY 19-20, they had 90 students on the football team. Here is the financial breakdown:

Revenue
Tuition & Fees Paid: $986,335
Room & Board Paid: $637,425
TOTAL REVENUE: $1,623,760

Expenses
Personnel: $498,932
Operating: $171,573
TOTAL EXPENSES: $670,506

REVENUE LESS EXPENSES: $953,254

This is a team that had a losing record. All athletic scholarship dollars in PASSHE are "real" dollars generated by sponsorships, donations, or guarantee payments from away games.

Nearly all 90 students attended this school because of football. If football leaves, nearly all 90 students will leave and take their tuition with them. For PASSHE schools, NCAA teams hit the budget the same as D3 programs. The only expenses are operating and personnel. So if PASSHE School X cuts football, they cut $670k from the budget. But then they also lose $1.6M in revenue.

So if football is such a cash cow for a school, why did Cheyney cut it (and other sports as well)? For that matter, why did Mansfield cut their program?

[Fightingscot82]

I get that academics (even business and economics faculty) are generally not businessmen nor think like them, so I don't expect them to always make the most astute business decisions. But universities also employ executive-level business managers and internal data managers. Cheyney's president is not an academic - he was an executive with Highmark. He's actually a Cal U alum too. But cutting athletics was a really short-sighted decision I've railed on before. He balanced the budget but he didn't fix the revenue shortfall that caused the budget issues. The more difficult, smarter decision would have been to create a plan to run athletics as efficiently as possible to maximize net tuition revenue. Their biggest challenge is turnover in students & coaches. There is almost no scholarship money and facilities are pretty bad, so coaches leave. Students also leave plus their target demographic is the most vulnerable to dropout. Good players transfer.

In the merger plans, both conglomerate task forces researched the possibility of cutting athletics at 2 of 3 campuses because everyone thought "Hey we're cutting millions of dollars in expenses!" But then they realized that nearly all students will transfer when you cut their program - even those within a year of graduation if they have eligibility remaining - thus making the revenue shortfall even worse.

The PASSHE schools don't have a spending problem, even though to some it appears that way. They have a revenue problem - and the revenue problem is because they have an enrollment problem. The enrollment shortfalls keep getting compared to 2010. That doesn't seem like that long ago but it was also at a significant demographic peak in high school graduates. Every PASSHE school had their highest enrollment to date in 2010. But similar to comparing life to pre-pandemic life, we have to go back to pre-peak enrollment of the late 90s and early 00s to see where everyone was relatively stable and private schools weren't using 50% coupons to lure middle class students. If the PASSHE schools could get back to their 20-25 years ago enrollment (which some say is attainable), they would be in a VERY different place financially.

[IUPbigINDIANS]

Hummm...A proven pathway to recovery? For some reason, the PASSHE seems unwilling to cut athletics at any of the other State Schools to help with their solvency problems. Here's a question for people in the know, have any athletic scholarships been cut at the struggling schools?

The schools don't pay the scholarships in PASSHE.

[Fightingscot82]

I'll post something internal for a particular PASSHE school. In FY 19-20, they had 90 students on the football team. Here is the financial breakdown:

Revenue
Tuition & Fees Paid: $986,335
Room & Board Paid: $637,425
TOTAL REVENUE: $1,623,760

Expenses
Personnel: $498,932
Operating: $171,573
TOTAL EXPENSES: $670,506

REVENUE LESS EXPENSES: $953,254

This is a team that had a losing record. All athletic scholarship dollars in PASSHE are "real" dollars generated by sponsorships, donations, or guarantee payments from away games.

Nearly all 90 students attended this school because of football. If football leaves, nearly all 90 students will leave and take their tuition with them. For PASSHE schools, NCAA teams hit the budget the same as D3 programs. The only expenses are operating and personnel. So if PASSHE School X cuts football, they cut $670k from the budget. But then they also lose $1.6M in revenue.

[IUPNation]

So they would save even more by cutting them.

But they aren’t saving money by cutting scholarships. That is all donated money.

[Fightingscot82]

So they would save even more by cutting them.

An example for you:

Football costs $600,000 on salaries and operations. How much tuition is 100 students at $15k a piece?Tell me where the bottom line improves.

[boatcapt]

Cheyney sponsored only a few sports when they did…the Triad schools have far more.

So they would save even more by cutting them.

[IUPNation]

Same reason Cheney did.

Cheyney sponsored only a few sports when they did…the Triad schools have far more.

[boatcapt]

Why would they cut them when the money is all fund raised?

Same reason Cheney did.

[IUPNation]

Hummm...A proven pathway to recovery? For some reason, the PASSHE seems unwilling to cut athletics at any of the other State Schools to help with their solvency problems. Here's a question for people in the know, have any athletic scholarships been cut at the struggling schools?

Why would they cut them when the money is all fund raised?

[boatcapt]

Yep. There was a lot of bad going on behind the scenes. For having 95% of operations covered by Freedom of Information Act, there is some really piss poor oversight of details by local Councils of Trustees and the PASSHE Board of Governors. Cheyney especially had terrible management. There was the lack of oversight with university purchasing cards (people buying millions in personal items on university dollars) and abuse of mileage & per diem rates for travel (people claiming per diem when meals were covered or mileage unnecessary). Then there was the federal financial aid fiasco that they weren't monitoring that the money was spent and returned properly. Then the bottom fell out on enrollment and they didn't know how to fix it. They balanced the budget by cutting almost all sports and outsourcing several functions to West Chester.

Hummm...A proven pathway to recovery? For some reason, the PASSHE seems unwilling to cut athletics at any of the other State Schools to help with their solvency problems. Here's a question for people in the know, have any athletic scholarships been cut at the struggling schools?

[Fightingscot82]

Cheyney might be in better shape now, but it took a helluva lot of money and fiddling around to get them there.

Yep. There was a lot of bad going on behind the scenes. For having 95% of operations covered by Freedom of Information Act, there is some really piss poor oversight of details by local Councils of Trustees and the PASSHE Board of Governors. Cheyney especially had terrible management. There was the lack of oversight with university purchasing cards (people buying millions in personal items on university dollars) and abuse of mileage & per diem rates for travel (people claiming per diem when meals were covered or mileage unnecessary). Then there was the federal financial aid fiasco that they weren't monitoring that the money was spent and returned properly. Then the bottom fell out on enrollment and they didn't know how to fix it. They balanced the budget by cutting almost all sports and outsourcing several functions to West Chester.

[Ship69]

Ok, gotta find more students. Thanks. (I'm just being cynical)

Current enrollment at Ship looks to be up slightly from the same time last year. They likely will beat their PASSHE-designated enrollment goal by more than 100 students.