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Why KSU Football Will Be Profitable, Just Not for Kennesaw State

The KSU administration knows a football program means start-up losses, but the university continues to move forward with plans to field a team for a specific reason.

 

Several weeks ago, the Alabama Crimson Tide steamrolled the upstart Georgia State Panthers 63-7.

If you think that's a crushing loss, just wait until you see Kennesaw State's budget sheets after its football program revs up.

It's a widely regarded fact that most football programs lose money. The less spoken-of reality here? Just how much money is lost via football programs, and just how many schools end up burning cash as a result.

In 2001, 40 universities with Division I-A football teams turned an average net profit of  approximately $5.26 million.

The other 77 posted average net losses at about $3.8 million per school.

Of the 124 Division I-AA schools, only nine proved profitable in 2001.

The other 115 posted average net losses of approximately $3.4 million.

Of the 84 Division I-AA schools, just six of them made a profit, while the other 78 posted average net losses to the tune of $2.8 million.

Remember, we're talking 2001 numbers here, which means pre-recession and pre-inflation figures. The more recent statistics, if you dare imagine them, are even more damning.

The statewide numbers are particularly distressing. Since adopting football programs, Georgia Southern University and West Georgia have continually posted revenue losses, and fairly successful football programs at Valdosta State University and Albany State University haven't kept those schools from suffering financial hardships.

Obviously, this raises the question: What's going to keep KSU from losing money on its proposed football program?

The answer, in short, is nothing.

It's going to be a long time before KSU reaps a profit from its football program, if ever. In the interim, the program is going to cost the school several million dollars a year, and to patch up such fiscal wounds, it's quite apparent that KSU students and faculty will be the ones settled with the dividends of football debt.

This means higher fees and tuition costs for students, major budgeting and funding cutbacks for academic programs, and certainly a number of staff and faculty layoffs.

Still, plans for the program move forward, at full velocity. Even though the numbers are clearly against the university and local community, it seems like nothing short of divine intervention is going to keep KSU from fielding a football team. For whatever reason, KSU President Daniel Papp believes his plan for college football success will beat the odds and prove a lucrative business when empirical wisdom and numerical fact state otherwise.

Then again, if you had financial backers like Papp, maybe you'd be a little confident with your vision, as well.

The Kennesaw State University Foundation, a virtual conglomerate of real estate developers and local business leaders, is the $350 million-plus heart of Kennesaw State's expansion plans.

Led by New York real estate mogul (and former Lehman Brothers associate) Norman J. Radow, the KSU Foundation has provided majority funding for almost all of KSU's developmental plans since 2007. In 2008, the KSU Foundation (which is listed as a nonprofit organization) financed both the University Village Suites and Commons Dining Hall. In 2009, the organization purchased 88 acres of land and funded the development of the KSU Soccer Stadium, which more than likely will be rechristened as a football field in a matter of months.

Papp and Radow do seem awfully chummy for guys who, technically, aren't business partners under the Georgia statutes of law.

At a 2009 board of trustees dinner, Radow said: "The growth that this university has experienced both in national reputation and physical infrastructure is a true testament of what can be accomplished when you combine a dedicated group of business leaders with an administration who shares a vision for excellence."

Papp, during his 2009 State of the University address, clearly felt an affinity toward his nonprofit benefactors, proclaiming, "Clearly, we owe a large debt of gratitude to the KSU Foundation. ... Without the foundation, we would not be the university we are."

According to 2008 records, almost 75 percent of the foundation's net value stemmed from rental property, direct-financing leases and outside property investments.

When Daniel Papp became president of  Kennesaw State University, the estimated asset value for the KSU Foundation was $194 million. Two years later (and one year after Radow was appointed chairman of the KSU Foundation's executive committee), the asset value of the organization skyrocketed to approximately $306 million.

Considering the deep pockets of the KSU Foundation, perhaps it isn't too surprising that Papp continues to bang the drum for Kennesaw State football. Really, how could you have concerns about business expenditures when you're being backed by a man who claimed to "salvage" more than $2 billion in property across the United States in a 2009 New York Times article?

Ultimately, KSU football will prove lucrative, just not for the students, staff, faculty or businesses surrounding Kennesaw State. 

See you at Radow Stadium in 2014.

The above opinions do not necessarily reflect those of Kennesaw Patch. We want to hear your thoughts on issues and encourage you to use Patch as a forum for community discussion. We ask only that you engage the issues (and each other) with tolerance and respect. Send your opinion pieces to gaetana.pipia@patch.com.

About this column: James Swift voices his opinions on the issues.
Do you think KSU football is bad news for the rest of the university? Tell us in the comments.

Ben Moore

10:04 am on Thursday, December 9, 2010

Interesting comments. Georgia State received the same feedback and yet it made more than $100,000 in revenue in its first season. I do believe Georgia State is better positioned that KSU right now and for the forseeable future. You must have the leadership, the fundraising and dynamic personality as your Head Coach to do it.

Good luck to you guys. Maybe we will see you in the Dome playing my Panthers in the future.

Ben Moore
PantherTalk.com

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Rick Zabell

10:55 am on Thursday, December 9, 2010

Excellent article. A pity that knowledge of this business connection wasn't out there, instead of all the hype, when students were voting on acceptance of a fee for football.
One technical correction in your terminology: There's no such thing as Division II-A football. It had been Division I-A and I-AA. And in the past two years, those have been rechristened as Football Bowl Subdivision (formerly I-A) and Football Championship Subdivision (formerly I-AA).

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Gaetana Pipia

11:28 am on Thursday, December 9, 2010

Rick, thank you for your comment. We've corrected the terminology.

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West Georgia Alumni

11:31 am on Thursday, December 9, 2010

Great article James, It is minor but worth mentioning that there is no West Georgia University. It is Actually the University of West Georgia. More often that not our name is found written incorrectly-I just wanted to clarify.

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Tim S

11:14 pm on Thursday, December 9, 2010

As soon as KSU gets a football the better off the state of Georgia will be in terms of talented kids leaving the state!

Bama, Duh-burn, Florida State, and SC all pull form the state of GA....... Sure that's great for us in the short term, but long term we need these kids to attend future power houses like KSU and GSU! It'll happen soon

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Jay

10:39 pm on Friday, December 10, 2010

"Lehman Brothers associate) Norman J. Radow," It is strange how Lehman Brothers was the top contributor to the Obama(nation) 2008 campaign & then got billions in WE THE PEOPLE of the U.S.A. tax dollars. When will Lehman pay back The Treasury? Please tell us slime ball Radow?

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Who let the Grinch write for Patch

12:29 pm on Sunday, December 19, 2010

Nice hit piece on college football and KSU.

Football is an integral part of college life on most big university campuses. Trust me, from someone who went to a school based around a soccer team -- it's not the same thing.

The bottom line is that the students at KSU are willing to bear the brunt of the costs associated with developing a football team via an additional fee. They are willing to pay for having what would be considered a traditional college experience. Good for them. Shame on you for passing judgment in a negative way.

And - wow - the horror, KSU figured out a way to monetize their alumni base and has millions in endowments, which they use to *gasp* EXPAND facilities, build dorms and transform the university into a traditional college campus. (Just like every other large university).

Let's investigate because the guy who is in charge just happens to work for Lehman Brothers. Guilt by association is a great smear tactic after all.

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Gaetana Pipia

8:15 pm on Sunday, December 19, 2010

Thank you everyone for your comments. If you'd like to weigh in on the pros or cons of a KSU football program, or any other local issue, I highly encourage you to send me your opinion pieces at gaetana.pipia@patch.com.

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Bob in Marietta

6:22 pm on Friday, May 4, 2012

College football is a draw to many students, and more and more schools are starting football if they didn't have it already. Look at UAB, Mercer, UNC-Charlotte and others. And yes - much of it is funded from student fees - above and beyond tuition. If students are willing to pay for that - let them. Additionally - football is a foundation of many colleges' athletic programs, and some actually fund the operation of other sports at that school.

However, KSU will need more than a 9,000 seat stadium when they start - and if successful, will need more than a 20,000 seat stadium. Not sure how they grow the current field to that size. The west side is already within 100 feet of Busbee Pkwy.

Lastly - the author still doesn't have the attributes correct for all the divisions. She has Division I-AA twice. She may mean Division II as the last category. Go college football!!! Love to see the Owls play!!!

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