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Ask Barry: Beaver Stadium Renovation

  • Post last modified:May 28, 2024

Alumni had a lot of questions after last week's vote approving the $700 million Beaver Stadium renovation project. I try and answer them.

The $700 million Beaver Stadium renovation project was approved by 72% of the Penn State Board of Trustees last Tuesday, May 21, 2024. Alumni Trustee Lubrano and I voted NO, Alumni Trustees Hasenkopf, Short, Wagman, and Krieger voted YES, and Alumni Trustees Paterno, Brown, and deLevie abstained (full roll call vote is at the bottom).

I strongly urge you to Click Here to watch the video of the meeting; I can assure you it’s well worth your time. I am grateful to Trustees Anthony Lubrano and Alvin deLevie for attempting to ensure the Board had a robust, public discussion of the pro’s and con’s of the project. 

Since the meeting I’ve received a lot of questions about what happened and what it means going forward. I’m sharing them with you below in an ‘Ask Barry’, and hope I’ve covered everything – if not, please email me and I will reply.  Jim Galanti also invited me to be a guest on his radio show where we had a very good in-depth discussion of the situation. You can listen to it here. I think you’ll enjoy it.

  • After watching the meeting live, it appeared that no other options were considered other than the $700 million west sideline renovation. Is this true? 

There were no meaningful deliberations of the full board of any other options. 

  • Penn State president Neeli Bendapudi insists that this project will break-even and be paid for by Athletics revenue and that no tuition dollars will be used. Is this true?

Based on the forecasts (pro-forma statements) the administration used to support the break-even argument, it’s difficult to see where her statement is accurate. Their calculations were based on:

  • Athletics’ operating expenses, which have increased by 6.5% per year over the last decade, would immediately and permanently drop to 2.5% per year for the next 30 years
  • No new capital projects would be undertaken by Athletics over the next 30 years

Based on the fact that there are $50 million of approved but not yet funded Athletics projects and that other major projects like the Natatorium renovation are in the advanced planning stages, and that even a reduction of operating expenses to 4.5% seems unlikely, I feel safe in predicting it is far more likely that Athletics will develop deficits in the hundreds of millions of dollars over the next several years that will need to be paid for with non-Athletics funds.

  • How can Penn State be considering an expenditure of this magnitude when they are in the middle of radically downsizing the commonwealth campuses?  

These are two distinct issues but it’s fair for people to be concerned about Penn State’s priorities as a university. One comment I agree with is: ‘Relative to the severe fiscal issues the University is facing, the timing of this project is bewildering.’

  • How does the NCAA player settlement that was just announced affect Penn State’s ability to pay for the stadium?

Pay-for-play cost estimates were included in the projections in anticipation this would happen. Even though they are not mandatory, everyone is in agreement that the situation is still very unsettled and no one can make 30 year predictions with confidence. So it’s wait and see, which fiscally is not a good place for Penn State (or any collegiate athletics program) to be.

  • Wouldn’t it be a better idea to raise the money first and then build the stadium?

That’s exactly what our Division I school peers do, and I agree. It’s a lot easier to ask people to be part of building something great than to ask for help paying the mortgage.

The other disappointments are that when Penn State Athletics budgets a capital project, most of the funding comes from debt with just a small portion from philanthropy.  When they do try to raise money there hasn’t been much success. The last two phases (2021-23) of the Lasch Building renovation were projected to cost $68 million, with none of it being paid from Athletics revenues and only 1/3 expected to be offset by philanthropy.  Even that small fraction of pledges has yet to be received. 

Compare this to the University of Georgia, who in 2022 spent $80 million to upgrade its football facilities and quickly raised $40 million of that. The other $40 million was paid for by the Athletic Department operating budget with no debt issued.

  • Why do our projects cost so much more than our peers?

Each project is obviously different, with unique aspects and similarities. Dormitory housing is different from building labs. I agree, however, that the consistency with which we seem to be on the top end is disconcerting. 

  • Why didn’t you offer any alternatives to the $700 million option?

To be blunt: it’s not my job. A trustee’s job is to review proposals presented by people getting paid to determine the best choices, which in this case is the Penn State administration. They are not supposed to also select the solution; that’s our job, not theirs. 

  • Okay, but if you were offering solutions what would you offer?

As an alumni, a football fan who goes to games, and a big Penn State Athletics fan my personal thoughts are:

  • Beaver Stadium needs work, probably in the neighborhood of $100 million, we all agree on that. It would be wonderful to increase its usage with events like the recent concert, and the loss-profit analysis on that is a clear winner. 
  • I would love more chair-back seating in the general admission seats, a shorter line to get a hot dog, and better crowd management. 
  • Offering more enhanced game day experience choices for those who want to pay for them would probably be worth examining.

As a Trustee, my solution is to get better control over Athletic Department finances, and figure out why we have fallen so far behind our peers with regard to raising philanthropy. Once we know the problems we can solve them. Until then we are operating with both hands tied behind our back.

  • What is the worst case scenario if the Athletic Department can’t generate enough net revenue to pay the annual interest on their debt? 

Great question. Keep in mind, there is no such thing as ‘Athletics Department debt’ because it’s not a separate entity. This is a Penn State obligation, and Penn State’s primary source of income is tuition and state appropriations.

A best case scenario would be ideal, but to do this Penn State has to get a handle on cost control. This takes fiscal discipline. If that fails, it might require cutting sports, continuing to defer maintenance, and refinancing the debt past 30 years. 

The worst case scenario would be that if Athletics can’t generate the revenue then Penn State will have to cover the shortfall, or default because they are underwriting the debt.

  • Why can’t the stadium be paid for by money from the endowment?

Another great question! This gets technical, but doing so would violate a lot of standards regarding how endowments are supposed to run. Donors contribute with the understanding that their money is to be used to generate yearly disbursements that will be used to further Penn State’s mission, not bail out football stadium construction.

  • Is Penn State ‘too big to fail’?

Short answer: No. 

Any large institution, when placed under enough stress, can fail. Also note that no large entity that failed was considered a candidate for failure until it failed. 

  • Who voted for this project? Who voted against?

Not Present (5): Hasenkopf (Alumni Trustee), Harpster, Mumin, Black, Pegula

No (2)Alumni Trustees Fenchak, Lubrano

Abstain (3)Alumni Trustees deLevie, Brown, Paterno

Aye (26): Alumni Trustees: Krieger, Short, Wagman
Amoros, Beard, Cairns, Davis, Delligatti, Detwiler, Dietrich, Dunn, Fenza, Gursahaney, Hoffman, Kleppinger, Lynch, Onorato, Potts, Quintos, Riegel, Rowland, Schnieder, Kevin Schuyler, Matt Schuyler, Sokolov, Redding


As a member of the Penn State Board of Trustees, I will from time to time be made aware of certain confidential information.  I will also engage with Trustees and administrators in private, off-the-record conversations, with the expectation of privacy on both parties. I take these expectations seriously, as they are required in order to catalyze important discussions.
As a fiduciary, it is also important that I engage in conversations with all stakeholders of the University. Stakeholders like you.  Discussions will involve publicly available information and issues before the Board, as well as my personal thoughts, concerns, and ideas. I also will continue to solicit your thoughts, concerns, and ideas, and plan to engage in meaningful conversations with you on those topics. I hope that you will continue to share your concerns and ideas with me.

I’d love to hear from you. Email me at barry@barryfenchak.com and let’s talk.

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