PASSHE Institutions Merging

[ironmaniup]

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 this kind of analysis has been the thing that frustrated me through my entire career. Its artificial, and depends on how you define the economic unit. of course there are more costs than this. For instance, it doesn't include maintenance costs of facilities, which are much higher with a team, Having a D2 football team requires you have a certain number of teams which don't have such a huge roster or fanbase to create this payout, More athletes mean more support personnel are required - things like staff for the AD. So administrators should look at different combinations of sports, and judge the ROI from athletics as a whole. Winning is important too, since having no winning teams hurts with recruitment and fund raising. With Cheyney, regularly being the butt of programs in PASSHE hurt them in a number of ways. In PASSHE this is a problem across the systems, with doing financial analysis on programs, and departments. The wrong grouping, gives you wrong answers, and set different divisions, that should be working together, at odds with one another. It incentivizes the interests of faculty and administrators over the interests of students - and many of the requirements to do this come from Harrisburg.

[Fightingscot82]

It's an enrollment problem added to the fact that Pa. is hardly a leader in funding higher education. Much as been made of increases to PASSHE over the past couple of years, but they usually leave out that funding had been largely stagnant since the 2008 recession and had even been cut before that. Where the state once upon a time provided all but about 30 percent of the PASSHE budgets, it now provides 30 percent or less of the budgets. PASSHE officials rejoice at getting an extra $33 million while a wealthy donor at Northwestern gives them $400 million toward a football stadium. If the state schools can continue to hold the line on tuition (and cast a wider net with lower out-of-state tuitions), continue to modify their program offerings, and wheedle a few more bucks out of the legislature they might have a fighting chance.

They'll need to hold the line on tuition and find out of state students to fill dorms and play sports. To keep enrollment steady they'll need to find ways for adults to attend.

[Ship69]

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.

It's an enrollment problem added to the fact that Pa. is hardly a leader in funding higher education. Much as been made of increases to PASSHE over the past couple of years, but they usually leave out that funding had been largely stagnant since the 2008 recession and had even been cut before that. Where the state once upon a time provided all but about 30 percent of the PASSHE budgets, it now provides 30 percent or less of the budgets. PASSHE officials rejoice at getting an extra $33 million while a wealthy donor at Northwestern gives them $400 million toward a football stadium. If the state schools can continue to hold the line on tuition (and cast a wider net with lower out-of-state tuitions), continue to modify their program offerings, and wheedle a few more bucks out of the legislature they might have a fighting chance.

[iupgroundhog]

There are other jobs-focused schools with athletics including football. The problem is that everybody knows football is expensive and that they weren't competitive. But it also helps kids pay for college and compels them to attend Cheyney instead of elsewhere - one of their challenges. The new academic orientation like you say is positive but I have to wonder how many students are choosing Cheyney for those industry partnerships or it being an HBCU with open admission.

There are also stages of development. Maybe if Cheyney achieves some basic things it will grow back to having the things we are used to in a residential state university or HBCU. I will believe that when I see it.

As far as self-redefinition, that is my hope for what IUP is doing i.e. redefining itself for the future.

[Fightingscot82]

I agree that they may have done it for budget-cutting appearances but I disagree that it was shortsighted. As I said in my previous post, the proof is in the pudding and they are succeeding where they haven't for, literally, 50 years. Results matter.

There are other jobs-focused schools with athletics including football. The problem is that everybody knows football is expensive and that they weren't competitive. But it also helps kids pay for college and compels them to attend Cheyney instead of elsewhere - one of their challenges. The new academic orientation like you say is positive but I have to wonder how many students are choosing Cheyney for those industry partnerships or it being an HBCU with open admission.

[iupgroundhog]

I covered it another post, but I think this was a short-sighted decision that was made to give the appearance of Cheyney doing everything they could to balance the budget. Mansfield converted to sprint football to in theory still get football player tuition but significantly lower the expenses. They've succeeded but from what I've been told by Commonwealth/Mansfield contacts that its been a revolving door of coaches and even less interest because who wants to see Mansfield little guys play football against Princeton? Less than those who want to see Mansfield's biggest dudes play football against Bloomsburg. The product quality of sprint football just isn't great.

I agree that they may have done it for budget-cutting appearances but I disagree that it was shortsighted. As I said in my previous post, the proof is in the pudding and they are succeeding where they haven't for, literally, 50 years. Results matter.

[IUPNation]

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?

Did you ever attend a game at Cheyney? They were not drawing anyone unless the visiting team traveled well.

[Fightingscot82]

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?

I covered it another post, but I think this was a short-sighted decision that was made to give the appearance of Cheyney doing everything they could to balance the budget. Mansfield converted to sprint football to in theory still get football player tuition but significantly lower the expenses. They've succeeded but from what I've been told by Commonwealth/Mansfield contacts that its been a revolving door of coaches and even less interest because who wants to see Mansfield little guys play football against Princeton? Less than those who want to see Mansfield's biggest dudes play football against Bloomsburg. The product quality of sprint football just isn't great.

[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.