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Economics professor argues new arena is losing money:

8/4/2010: At Missouri State, we mean. Change a few names and this story from the Springield Missouri News-Leader is eerily similar to the ones Ryan Knutson wrote for the Oregon Daily Emerald.

The quote at the end from the new president sums it all up: “I will not ask for state support,” Cofer said. “Student support? That’s a different story.”

UO’s current plan is to subsidize our new Arena on the sly, by increasing student and faculty/staff parking fees and by having the UO general fund pay the jock box operating costs.

We haven’t heard any reports on how Matt Court ticket sales are going, or how quickly the “Athletic Legacy Fund” will be drained. When that money’s gone they can fall back on the $1 ticket surcharge they are – supposedly – squirreling away in a rainy day fund. 

Review of JQH Arena finances planned
Didi Tang • News-Leader • August 1, 2010

James Cofer, the new president, plans to review the finances of JQH Arena, which outgoing president Mike Nietzel had promised would pay for itself.

“I’m not promising anything at this stage,” said Cofer. But he added he believes the arena is an asset to the university. “It’s important we utilize that asset,” said Cofer.
Attendance at the arena is not bad, but Cofer said he would like to see more people.

The financial viability of JQH Arena became controversial after economics professor Reed Olsen last fall contended it lost $400,000 in its first year of operation. Nietzel in 2006 said JQH Arena would pay for itself and have no impact on the rest of the university budget.

“We will support this through revenue. We have not asked the state for support and have not asked for general revenue from the university,” Nietzel said in 2006. “The whole thing is based on revenue that will flow from activities in the arena and gifts for the arena.”

There is no binding contract that JQH Arena would be self-sufficient financially. Nietzel refuted Olsen’s claim, arguing JQH Arena had a $1.1 million surplus after its first year.

In his calculations, Nietzel counted $1.4 million in one-time interest income, which drastically cut the university’s debt obligations to $700,000 in the 2008-2009 fiscal year.

Financial statements of the arena also show a student fee has been reallocated to support the basketball facility.

In 2006, the Faculty Senate charged its budget and priorities committee to monitor the arena’s financial status, but last spring the Faculty Senate agreed the task would be pointless after the leadership change, because the new president is not bound by his predecessor’s promise.

On Friday, Cofer said JQH Arena would stay within the university budget. He said he would review how revenues, such as student fees, and costs are allocated between JQH Arena and Hammons Student Center, the old basketball arena.

“I will not ask for state support,” Cofer said. “Student support? That’s a different story.”

Thanks to Margaret Soltan for the link.

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