The Faculty Senate met Tuesday afternoon to discuss financing of Temple’s proposed $126 million on-campus stadium.
University CFO and Treasurer Ken Kaiser presented “On-Campus Stadium Financial Review and Rationale” to attendees, and explained the difference of cost between building the stadium and continuing to rent out Lincoln Financial Field.
“It’s your typical ‘rent-or-buy’ question,” Kaiser told the Senate. “It’s a lot less expensive over the long-term.”
According to Kaiser’s presentation, while the rent has not increased, average game-day expenses have increased almost nine times, from $195,000 in 2003 to a projected $1,730,000 in 2017. With the $1 million rent added, the cost for playing at Lincoln Financial Field has doubled over fifteen years, Kaiser said.
With its own stadium, he said, Temple would pay two-thirds less for game-day expenses, creating $4 million of savings by 2024.
He added the proposed 2018-2022 lease with the Eagles would triple the annual rent Temple plays, along with an almost $300,000 increase in average game-day expenses.
He said the Eagles had offered two one-year extensions for Temple’s lease at half the rent price, but would “charge millions” in other expenses.
“The Eagles, they’re a smart bunch,” Kaiser said.
Kaiser then compared the costs and revenues that would be generated if Temple continues to lease at Lincoln Financial Field, versus building its own on-campus stadium.
He said game-day expenses, which increase at a projected 16.9 percent annual rate, would only cost $872,000 and increase at a 5 percent annual rate.
While Temple only gets 10 percent of concession revenues and no parking or suite revenues from its games at Lincoln Financial Field, Kaiser said Temple would be able to get 100 percent of the revenue from concessions, parking and suites from an on-campus stadium.
The stadium, Kaiser said, would become financially stable after a few years whereas continuing to rent from the Eagles would result in “growing deficits.”
Kaiser then explained the university’s plan to fund the $126 million stadium, adding it will rely mostly on contributions and will not need any increase in tuition. The largest method of payment would be through a debt service—similar to a mortgage—of $56 million, offset by the stadium’s revenues and cost savings. The next payment will be through $50 million worth of donations, sponsorships, private gifts and seat licenses.
“This is the one area that really needs to come through,” Kaiser said.
He added $15 million has already been donated, the highest donation total Kaiser has seen in his time at Temple.
“It shows people are already really interested,” he said.
The state governor’s office has also promised to contribute $20 million to the project.
Kaiser added that even with no increase in game attendance, the stadium would have an increasing revenue of $2 and $3 million annually.
Temple will “break even” five years after building the stadium, Kaiser said. In year six and the years after, the stadium would produce a margin, with savings “growing year after year.”
Kaiser added the stadium will save the university more than $21 million by 2024, compared to leasing at Lincoln Financial Field—not including revenue from a retail plaza, which will be paid for by third-party developers.
After discussing new Faculty Senate elections, adjunct contract negotiations and Temple’s Crisis, Assessment, Response and Education program, the Faculty Senate passed a motion condemning anti-LGBT laws passed in North Carolina and Mississippi.
The meeting ran several minutes late, and no faculty could be reached for comment after its conclusion.
Julie Christie can be reached at julie.christie@temple.edu or on Twitter @ChristieJules.
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