Football Stadium Arms Race Pushed This School Deeper Into Debt

[marmar]

(Bloomberg) Colorado State University sold $239 million of bonds to build a football stadium that students, faculty and credit-rating companies say may strain its finances. School leaders say the debt binge will help secure its future.

Colorado’s second-largest university is joining an intensifying national competition to attract high-tuition, out-of-state students by pouring billions into new dormitories, classrooms, student centers and gyms.

With borrowing costs holding close to the lowest since the 1960s, the university issued debt last month to replace its 47-year-old stadium two miles from the Fort Collins campus where the Rams now play. The new arena will help push CSU’s debt to $1.14 billion this year, more than double what it was in 2009, according to Standard & Poor’s.

“This is one of the few things that an institution can do that’s going to draw 40,000 people to campus,” said Joe Parker, the school’s director of athletics. “There are very few things that attract people with the same passion that athletics does.”

.....(snip).....

The new debt will “exert greater pressure on financial resources that we already view as very weak for the rating,” Jessica Wood, an S&P analyst in Chicago, wrote in a report. ................(more)

http://www.bloomberg.com/news/articles/2015-04-22/football-stadium-arms-race-pushes-colorado-school-to-double-debt

[pangaia]

1. As the DA said,

“There are very few things that attract people with the same passion that athletics does.”

And that's the problem