College Sports Go Pro on Player Pay, Arenas, $50 Million Coaches

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Alexis Christoforous (0:16)

College football suite going for about a million bucks. You know, I mean, that's the reality folks. That's the reality at some schools at least, as college sports begin to look an awful lot like pro sports these days. Bloomberg News Higher Education Finance Reporter, Janet Lorin, wrote a terrific story about this very topic. In fact, it's one of the most read stories on the Bloomberg Terminal today, and she joins us here in studio. It's a great read. There's also a video that goes along with this. So folks, be sure to check that out. You highlight the University of Kansas' David Booth football stadium, undergoing an $800 million renovation. First, let's talk about where's the money coming from?

Janet Lorin (0:55)

Well, thank you for having me. So good question. The David Booth Memorial Stadium is named in honor of?

Alexis Christoforous (1:02)

David Booth.

Janet Lorin (1:03)

David Booth, a very well-known investor.

He donated $300 million for the renovation of the stadium plus money for an adjoining district that will also generate more money with hotels and conference centers and all that stuff that comes along with it. He worked in the stadium as a teenager. He went to the University of Kansas and it's kind of a nice story.

Alexis Christoforous (1:29)

A great story, yeah.

Janet Lorin (1:30)

And there is a new arms race in college sports. And part of the reason is because they are paying players for the first time.

So how are colleges generating revenue to share with players? They're looking for money everywhere. And part of that involves renovating and building new stadiums and arenas with more club seats, fancy amenities, more expensive food, ticket revenue, and that's all generating more money.

Lisa Mateo (1:58)

You had to tell me about some of those amenities. Okay, so let's dig into them at this stadium. Crab cakes, there's all these different things. Can you dig into what people will get for a suite?

Janet Lorin (2:08)

Well, they have 40 suites in Kansas. There's different levels and you have to have an upfront donation. And the least expensive would be $800,000.

Alexis Christoforous (2:18)

The least expensive?

Janet Lorin (2:19)

Not all at once. You can pay it in installments. And then there's an annual fee, at least this year, of $60,000 for the suite.

Alexis Christoforous (2:28)

How do local communities feel about this? Because as you said, this football stadium at Kansas University is going to have this district around it. So your article talked about UNC Chapel Hill, the folks there. There are some people who are pushing back on these kinds of things.

Janet Lorin (2:46)

Yes, and these are some of the alumni who are very proud of their extremely successful men's basketball team. I think it was three championships over the last 15 years, and they want to keep the old stadium. The old arena called the Dean Dome, which I visited, is 40 years old. And the Chancellor of UNC, Lee Roberts, we had him in the studio not too long ago, and he talked about when it rains, they have to put buckets out. So, it's in need of a renovation.

And UNC is building a new campus. They're adding 5,000 new students to keep up with growth in North Carolina, adding new research facilities, new dorms, new housing, lots of change on the campus. And they wanted to move the basketball stadium, and they have run into a lot of resistance. They want to build a beautiful new stadium, club seats, fancy amenities, and there's a group of alumni, former players, and the former coach, Roy Williams, they're all opposed to it.

Lisa Mateo (3:50)

Well, you have to talk more about this going beyond football. I mean, I'm sure this goes to basketball. I'm sure it goes to they wanted to make money to maybe have concerts there and make revenue that way. I mean, there's hotels, there's restaurants that probably pay money to the college to lease space there too.

Janet Lorin (4:05)

Yes.

Lisa Mateo (4:05)

Talk about some of these revenue generating areas.

Janet Lorin (4:08)

That's exactly what's happening. And they're taking a page from professional sports because the University of Tennessee has a $300 million new district. Part of it is being developed with a private equity firm.

And they're looking for apartments, restaurants, you name it, hotels, trying to extend that fan game day experience that people seem to want and will pay money for.

Alexis Christoforous (4:34)

There's something called the Protect College Sports Act. Tell us what it is and where do things stand with that right now?