Funny Money at Cal-Berkeley

In a big-time sports version of the “99% vs. 1%,” the University of California-Berkeley recently opened its plush Simpson Student-Athlete High Performance Center (SAHPC). The “One-Percenters” in this case are members of 13 varsity sports teams on campus. Not only is the general student body (36,142 total students) barred from using the new facility but 16 other varsity teams on campus have been basically locked-out of the $153 million project as well. (See “Cal’s Student-Athlete High Performance Center Should Show Us the Money,” by Brian Barsky).

The grand opening comes at a time when budgets are being slashed across the Berkeley campus. One report identified 63 chronic roof leaks and antiquated laboratory facilities on campus.

Cal’s administrators are telling the public that the SAHPC has been funded by private donations. However, according to an analytical report by Berkeley professor Brian Barsky, it was disclosed at a February 3, 2009 Cal-Berkeley Regents’ meeting that the construction cost had jumped from the original estimate of $111.9 million to $153 million, with $136 million funded by debt. This is in addition to $321 million in debt for a reconstruction of Cal’s football stadium, for a grand total of $457 million in athletic facilities debt. Factoring in the interest on these loans and it results in about a $1 billion commitment for upgrades to the facilities for varsity athletics.

According to Barsky, the Cal athletic department already falls short in covering its own annual expenditures. The athletic department was $88.4 million short from 2003-2011. So, to expect the athletic department to cover the debt payments for the new athletic facilities is pie-in-the-sky thinking. The University of California will ultimately be responsible. Reuter’s reported that a key rating driver for the bonds is the university’s “ability to increase tuition and fees.” This can’t be good news for students who’ve seen tuition fees quadruple over the last decade.

As of now, about 29% of the construction cost for the SAHPC was raised from donations. Given this overall financial situation, it’s particularly shocking that Cal’s head football coach will receive a quarter-million dollar bonus when the football team completes its move into the SAHPC, AND a second bonus of equal size when the team plays its first home game in the reconstructed stadium.

“Ultimately, this is a potent example of the misguided priorities that emphasize Intercollegiate Athletics rather than the core educational mission of UC Berkeley,” concluded Barsky.

— Ken Reed, Sports Policy Director, League of Fans