The Texas A&M University System (TAMUS) is proposing to spend $425-$450 million to expand and renovate Kyle Field, the football stadium on the system's flagship campus here in College Station. To help fund the project, TAMUS has asked area local governments (the city of College Station, the City of Bryan, and Brazos County) to pitch in $38 million. If the local governments fail to pay up, TAMUS has threatened to relocate home football games during the renovation. A recent study commissioned by the Bryan-College Station Chamber of Commerce claims that relocating Texas A&M home games for a season would cost the area $63 million in direct business activity.
A few thoughts:
1. The proposed stadium expansion will cost a minimum of $425,000,000 to add a maximum of about 15,000 seats to the stadium. Average season ticket prices are now $360. Presuming the project actually produces the maximum expansion at the minimum cost, the expansion would generate $5,400,000 of extra ticket revenue each season at current season ticket prices. At that rate, the expansion would pay for itself in just under 79 years. Even if we double the marginal revenue estimate to $10,800,000 to account for concessions, increased ticket prices in the newly renovated stadium, etc., the project would still take almost four decades to pay for itself. Obviously, the situation is more complicated than that since I have not accounted for inflation, borrowing costs, the potential to sell naming rights, etc., but even these rough calculations show that it will take a long time, even under favorable circumstances, to recapture the expense of the stadium expansion.
2. Where in the world will TAMUS get half a billion dollars?
3. The costs of the renovation are staggering---an up-front estimate of nearly half a billion dollars. The opportunity costs are even more staggering. What else could the university or the state of Texas buy for half a billion dollars?
Just for comparison, Texas A&M bought Texas Wesleyan University's Law School for $25,000,000 (depending what you count) and TAMUS will start up a national center for researching and manufacturing vaccines for $285,000,000. So, for the same amount of money TAMUS wants to spend on adding 15,000 seats to the football stadium, it could build another national vaccine research and manufacturing center, buy five law schools, and still have $15,000,000 to kick around.
4. What are the savings from shuttering Kyle Field for a year during the renovations? The stadium as currently configured holds about 87,000 people, paying an average of $360 per season. That's $31,320,000 a year plus concessions, parking, etc. If the team leaves town, that's almost certainly fewer ticket sales plus sharing revenue with the owner of another venue, the cost of managing "home" games in another city, etc. Even if local governments don't buy a home season for $38,000,000, its seems like the financial incentives for moving a season might be pretty spare.
5. The Oxford Economics study of the impact of losing a home football season claims that the direct economic cost of a season away would be $63,000,000 and the total (direct and indirect) loss would be $86,000,000. Taking the study totally at face value, it is still not self-evident that local governments should pay $38,000,000 to buy a home season from TAMUS. The estimated losses are revenue figures. Not all of that money stays in town. A lot of leaves for out-of-town wholesale suppliers, etc. Even the report admits that the $86,000,000 figure includes only $21,000,000 in lost household income. Meanwhile, the $38,000,00 season ransom would be a real out-of-pocket expense for the local communities, which would mean that much less money in the local economy to begin with. It's not immediately evident to me that buying a home football season at that price is a good deal for the affected communities.
6. Colorado State University wants to spend $250,000,000 to build a stadium from scratch. The University of Houston's new stadium is expected to cost $105,000,000. Why does it cost 2-4 times as much for TAMUS to expand its stadium capacity by about 10-15% as it does for other institutions to build new facilities from scratch?
Thursday, September 27, 2012
Monday, September 17, 2012
Diplomatic Security in Libya
I am no expert on international security, but Susan Rice's appearance on This Week seems to cast a pretty unfavorable light on the administration's handling of security for the American diplomatic mission in Libya in a pretty poor light.
First, the administration's claim that the attacks at the U.S. consulate in Benghazi and at other American diplomatic facilities around the world last week were totally spontaneous and uncoordinated is contradicted by a variety of independent reports. The UK's Independent reports that the United States received specific warnings about attacks in Eqypt and Libya at least two full days before the riot in Cairo and the assault in Benghazi. CNN reports that Libyan officials had warned American diplomats that the security situation in Benghazi was unstable. The president of Libya claims that post-attack investigations leave little doubt that the assault on the consulate was planned.
If the administration's line is not correct, then the United States either failed to act on (general or specific) warnings about emerging danger in Benghazi or failed to detect a serious security threat to its diplomatic mission in Libya.
Even if the administration's line is correct, it's attitude toward security in Libya seems pretty flip. Ambassador Rice admitted that there was no military security at the consulate in Benghazi or the embassy in Tripoli, claiming that the "circumstances" didn't indicate that level of security and that the Libyan diplomatic mission was "relatively new."
The claims that the circumstances didn't justify military security and that the mission was too new to have set such security up are not necessarily exclusive, but Ambassador Rice's statements imply that there was a determination that no such security was necessary and that there was a failure to setup such security in time. Together, they leave me wondering exactly how military security is allocated to U.S. diplomatic missions in general and what didn't work in Libya.
All told and the presidential campaign aside, there are serious questions still unanswered about the attack in Benghazi and the murder of Ambassador Christopher Stevens.
First, the administration's claim that the attacks at the U.S. consulate in Benghazi and at other American diplomatic facilities around the world last week were totally spontaneous and uncoordinated is contradicted by a variety of independent reports. The UK's Independent reports that the United States received specific warnings about attacks in Eqypt and Libya at least two full days before the riot in Cairo and the assault in Benghazi. CNN reports that Libyan officials had warned American diplomats that the security situation in Benghazi was unstable. The president of Libya claims that post-attack investigations leave little doubt that the assault on the consulate was planned.
If the administration's line is not correct, then the United States either failed to act on (general or specific) warnings about emerging danger in Benghazi or failed to detect a serious security threat to its diplomatic mission in Libya.
Even if the administration's line is correct, it's attitude toward security in Libya seems pretty flip. Ambassador Rice admitted that there was no military security at the consulate in Benghazi or the embassy in Tripoli, claiming that the "circumstances" didn't indicate that level of security and that the Libyan diplomatic mission was "relatively new."
Unlike other embassies around the world, Rice said there were no Marines present last week to protect the consulate in Benghazi, or the main U.S. embassy in Tripoli, saying the U.S. presence there is “relatively new” since the revolution that overthrew former dictator Moammar Gadhafi.Again, I am not a security expert, but Libya is obviously a country under a tremendous amount of stress. It deposed its long-time dictator only a few months ago and a variety of internal and external forces have been jockeying for influence and power ever since. So, we have an unstable country with lots of heavy weaponry from a revolt floating around and foreign and domestic Islamists trying to stake out claims on the new Libyan state and the "circumstances" don't justify Marine guards for U.S. diplomatic missions? Or, maybe they did and the State Department just didn't have time to get around to it over the last few month?
“There are not Marines in every facility. That depends on the circumstances. That depends on the requirements,” Rice said. “Our presence in Tripoli, as in Benghazi, is relatively new, as you will recall. We’ve been back post-revolution only for a matter of months.”
The claims that the circumstances didn't justify military security and that the mission was too new to have set such security up are not necessarily exclusive, but Ambassador Rice's statements imply that there was a determination that no such security was necessary and that there was a failure to setup such security in time. Together, they leave me wondering exactly how military security is allocated to U.S. diplomatic missions in general and what didn't work in Libya.
All told and the presidential campaign aside, there are serious questions still unanswered about the attack in Benghazi and the murder of Ambassador Christopher Stevens.
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