FB: Southern Athletic Association

[jknezek]

BSC needs to promote themselves as a financial boost to the impoverished neighborhood they are located.  They are jobs, not just professors, but also security, custodial, cafeteria staff, grounds keepers, maintenance.  All those jobs will be lost, as well as the 1,200 people that are around that campus using gas stations and eating at the Popeye's right off of campus.  That neighborhood will lose that money, money it can't really afford to lose.  As much as some have complained that it is a gated fortress to keep out the people in that neighborhood, it provides more financial support than a dilapidated Legion Field that the city is paying another $5mil to keep going, for some reason.

I think that ship sailed a long time ago. There aren't enough of those jobs, and the community sees them as scrap jobs vs the higher paying jobs that go to people not in the community, or people who don't want to live in the community, and mainly people who don't look like those in the community. I suspect that beyond a couple gas stations and the Popeyes, local businesses don't see that much, if any, student traffic, and I suspect what they see isn't worth $35MM.

As for the city of Birmingham itself, or Jefferson County, the 1000 students at B-SC are a rounding error. The money they provide to the community through events like Parents Weekend and Graduation are miniscule. Frankly, UAB's undergrad enrollment alone varies on a yearly basis at least 50% of B-SC's total enrollment. If you include grad schools, UAB's annual enrollment probably varies as much if not more than B-SC's total enrollment.

In the end, whether B-SC is there or not, probably matters to less than 300 people in Jefferson County in terms of economics. That is the hard truth of the situation. B-SC has just not found a way to be relevant enough to its community, to it's city, to it's county, and certainly not to the state to get public money.

As for Legion Field... I completely agree. But there is a community pride component of Legion Field that B-SC does not have. There is a reason the Magic City Classic has not moved to Protective Stadium, despite it being 1000x nicer. People in the community make direct money from every event at Legion Field when attendees park on their lawns, buy tickets from scalpers, buy drinks and snacks from street side vendors (basically people selling on their lawns) during the Magic City Pre-Game parade and events. A few people are employed at B-SC, but no one really sees that in the community the same way they see all those $10 parking signs on lawns on gameday.

And finally, Legion Field is $5mm from one place. B-SC was looking for $35-40MM from a mix of local, county and state. That's a lot more hoops to jump through. I suspect the next time Legion Field needs a big chunk for repairs or improvements, that will be the end. But as long as all it needs is an annual local dribble, that's just buying the current Mayor some votes and probably well worth doing.

[BSCpanthers]

As much as I'd like to argue all those points, you are correct.  It's just one of those things that effects me personally and am sad to see it going away.  For what it's worth, my check to pay my kids tuition next semester should be a lot less then what I have been paying........

But, I'll miss gamedays, tailgating and friendships I have made with other parents.  I'm still holding out hope.  Still banging my drum, and I'll do it until the gates are locked. 

#ForwardEver

[Ron Boerger]

As much as I'd like to argue all those points, you are correct.  It's just one of those things that effects me personally and am sad to see it going away.  For what it's worth, my check to pay my kids tuition next semester should be a lot less then what I have been paying........

But, I'll miss gamedays, tailgating and friendships I have made with other parents.  I'm still holding out hope.  Still banging my drum, and I'll do it until the gates are locked. 

#ForwardEver

I hope that the other schools in the SAA are staying apprised of the BSC situation to find new school homes for as many of the students there as possible should it come down to that.  But there's no doubt this sucks for everyone - students, faculty, staff, alumni, friends - involved.

[jknezek]

As much as I'd like to argue all those points, you are correct.  It's just one of those things that effects me personally and am sad to see it going away.  For what it's worth, my check to pay my kids tuition next semester should be a lot less then what I have been paying........

But, I'll miss gamedays, tailgating and friendships I have made with other parents.  I'm still holding out hope.  Still banging my drum, and I'll do it until the gates are locked. 

#ForwardEver

And I get it and empathize. I have fond memories of tailgating with my kids on the hill above the football field before they started charging for those spots (maybe they should have started earlier!). Used to drive the motorhome over early in the a.m. and get everything set up, they would show up with mom and friends before the game. None of us had any connection to B-SC, but we sure had fun. Great memories of them sliding down the hill on pieces of cardboard and sharing food with everyone around us. Hit a game a year from 2012-2017 or so. Maybe even a year or two later. My daughter was just on campus for Middle School Junior UN. I think it's a crappy thing to happen, but as an outsider, I understand why it's not getting the funding. It just sucks for anyone remotely related to the place.

[BSCpanthers]

As much as I'd like to argue all those points, you are correct.  It's just one of those things that effects me personally and am sad to see it going away.  For what it's worth, my check to pay my kids tuition next semester should be a lot less then what I have been paying........

But, I'll miss gamedays, tailgating and friendships I have made with other parents.  I'm still holding out hope.  Still banging my drum, and I'll do it until the gates are locked. 

#ForwardEver

I hope that the other schools in the SAA are staying apprised of the BSC situation to find new school homes for as many of the students there as possible should it come down to that.  But there's no doubt this sucks for everyone - students, faculty, staff, alumni, friends - involved.

I know other coaches have reached out to the BSC coaches about players, not in a recruiting way, just in a we have spots available way.  BSC is a very good program with good players, a lot of schools would like some of our kids.  Some players have already left for other schools. 

[cush]

so how much money does BSC need to operate for another year? I've read they bring in around $21 million in tuition, meal, etc  and $10 million or so in annual fundraising so that's around $30 million to run the school if those numbers are correct for a year.

[crufootball]

so how much money does BSC need to operate for another year? I've read they bring in around $21 million in tuition, meal, etc  and $10 million or so in annual fundraising so that's around $30 million to run the school if those numbers are correct for a year.

Have to think that not a small number of prospective and current students are reading these stories and have already planned to leave so hard to count on a steady tuition amount.

[jknezek]

so how much money does BSC need to operate for another year? I've read they bring in around $21 million in tuition, meal, etc  and $10 million or so in annual fundraising so that's around $30 million to run the school if those numbers are correct for a year.

The President said the 37MM they asked for would cover the deficit for the next 2 years while they righted the ship, then could start to be paid back... which no one really believed. The 200MM they are trying to raise would put the endowment at 225MM or so, as they would need to draw on the amount they have now to bridge those years as well. As for operating expenses and tuition revenue, I don't know, but that 37MM was clearly spoken for as paying the operating deficit that was expected in the 2023/24 and 2024/25 academic years.

[BSCpanthers]

Also, the $200mil endowment would allow them to use the "interest" towards operating expenses without dipping into the $200mil.  The $200mil isn't for use, just to sit and make money.  The current commitment is only $45.5mil, and that is where it has been for the last few months.  I'd feel much better if they could have already got that over $100mil. 

[Hawks88]

so how much money does BSC need to operate for another year? I've read they bring in around $21 million in tuition, meal, etc  and $10 million or so in annual fundraising so that's around $30 million to run the school if those numbers are correct for a year.

Have to think that not a small number of prospective and current students are reading these stories and have already planned to leave so hard to count on a steady tuition amount.

I'm still seeing tweets from kids "signing with"/committing to BSC for the fall. I assume they're aware of what's happening and have backups?

[jknezek]

so how much money does BSC need to operate for another year? I've read they bring in around $21 million in tuition, meal, etc  and $10 million or so in annual fundraising so that's around $30 million to run the school if those numbers are correct for a year.

Have to think that not a small number of prospective and current students are reading these stories and have already planned to leave so hard to count on a steady tuition amount.

I'm still seeing tweets from kids "signing with"/committing to BSC for the fall. I assume they're aware of what's happening and have backups?

Who knows? But it's not like the school is hiding the problem so that would be on the kid/kid's parents at this point.

[cush]

I can't believe BSC is running a $20 million deficit each year for the next 2 years. I believe University of Montevallo annual budget is $28 million for a much larger school, BSC should be able to function with $30 million coming in annually. I get wanting the endowment to be $200 million or $2 billion and running the school off interest but that's not practical for BSC right now. Their only goal should be keeping the school open, if that means no or negative endowment growth and using current pledged endowment funds for annual operations so be it. If donors don't want to give in that case than the donors will know their lack of support will result in the school closing.

[jknezek]

I can't believe BSC is running a $20 million deficit each year for the next 2 years. I believe University of Montevallo annual budget is $28 million for a much larger school, BSC should be able to function with $30 million coming in annually. I get wanting the endowment to be $200 million or $2 billion and running the school off interest but that's not practical for BSC right now. Their only goal should be keeping the school open, if that means no or negative endowment growth and using current pledged endowment funds for annual operations so be it. If donors don't want to give in that case than the donors will know their lack of support will result in the school closing.

And that is essentially what is happening. B-SC's endowment was roughly 51MM in 2021. Much of that is probably pledged to specific purposes, as is typical of endowment funds. They probably have tapped as much of the existing endowment as they can. They are running in the red, whether it is 10MM or 15MM, it doesn't matter what Montevallo is doing, it matters what the numbers are for B-SC.

The second half of this article is the clearest articulation of the college's financial situation:
https://www.cbs42.com/alabama-news/birmingham-southern-college-seeks-bailout-warning-it-may-close/#:~:text=Birmingham%2DSouthern%20owed%20%2433%20million%20in%20debt%20then.

Moody's had already downgraded the college in Jan 2021, the school essentially defaulted on 30MM in debt in 2021, and the operating deficit had risen to 10MM in 2019. 2020 definitely didn't help, and enrollment has dropped from 1300 to around 1000 by 2021. The article does say the almost 40mm they asked for would be for covering 3 years of operating deficits, not 2. So that is a significant difference.

But regardless, yes, they can't raise the money from alumni to pay bills, they can't borrow any more to pay bills, they can't fund themselves using the endowment anymore, and tuition is not covering expenses.

By this point, the alumni are well aware of what is happening. The school cannot keep the doors open as it stands, and they have tried what they can. That 45MM was specifically pledged under specific constraints. It would only be collected if the school stayed open and got to 200MM in pledges by 2026. They can try and change the terms, but I suspect the donors know that it is a losing battle at this point.

[awadelewis]

I can't believe BSC is running a $20 million deficit each year for the next 2 years. I believe University of Montevallo annual budget is $28 million for a much larger school, BSC should be able to function with $30 million coming in annually. I get wanting the endowment to be $200 million or $2 billion and running the school off interest but that's not practical for BSC right now. Their only goal should be keeping the school open, if that means no or negative endowment growth and using current pledged endowment funds for annual operations so be it. If donors don't want to give in that case than the donors will know their lack of support will result in the school closing.

It's difficult to compare B-SC's situation with Montevallo with UM being a public school.   They're much like us as Athens State where the state appropriation is what covers what they don't make up annually from tuition.   Private schools typically use the return on endowment investment for that purpose and that's what B-SC needs to cover with the bridge loan they're seeking from the state.    That's also why that having an endowment >=$200M is such a magic number: at that point, the return on the investment becomes enough the cover the annual shortfall from tuition and aid.

[Ron Boerger]

The latest coach to leave B-SC is the women's VB coach, headed to a D2 school (Montevallo).  Can't blame anyone for looking out for themselves given circumstances.