The Michigan Stadium Renovation From The Inside

Anyone who's walked or driven by the Big House knows there are some impressive superstructures going up. But how do they look from your seats? Reader Matthew Waun provides some photos (as always, click for big):






Much more intimidating, IMO.

You can see the top rows of the boxes actually jut out over the field, which will help reflect noise. If you believe the crew of scientists who wheeled the oversized metallic dandelion onto the field at halftime of the Minnesota game, the boxes will double the perceived loudness on the field. Which, like, dude. I'll believe it when I hear it but here's hoping.

Unverified Voracity Is #2

We're #2. And yesterday's big news:

The University has reached a settlement that ends the lawsuit over Michigan Stadium's accessibility to disabled fans - and, for the time being, will end the Big House's reign as the largest football stadium in the country.

Capacity will drop to 106,201 in 2008 and 2009 before the boxes and such restore some number of lost seats. The Detroit News cheerily says "no problem, we're still #1", but the Daily wonders:

The pre-settlement project estimate said the stadium's capacity by the conclusion of the project in 2010 would top 108,000, an addition of 500 seats from the start of the project. But because today's settlement will remove an estimated 1,500 seats from the bowl, it's unclear whether that will be enough to make Michigan Stadium the biggest again.

"Over time, we again expect to have the largest capacity of any stadium in the country," Hage said. "We have to wait until 2010 to see how the new seating shakes out."

(FYI: The Daily article is the most informative and in-depth of any provided by news-gathering organizations, which continues a trend started earlier in the year: the Daily out-covered everyone on the Michigan Stadium renovations. Not bad.)

Sounds like there is going to be some hurried rejiggering in the works. I don't know where Hage & Co are going to shake 1,000 extra seats out of the renovation plans unless they cut down on the individual seat expansion. Slimfast for everyone!

I already have requests for snark in both text and t-shirt form in my inbox, but in a foray into Actual Journalism undertaken last summer I conversed with the Bernstein in charge of the case
and came away under the impression that the university was going to have to give ground to a real concern. Notre Dame Stadium is far closer to the 1% mendoza line mandated by the ADA; so is Ohio Stadium. There was no way Michigan was going to weasel out of similar compliance. (Given the parameters of the renovation, the "but it's just repair!" line provided by the U was definitely weaselly.) So no snark here.

Hurdled. Michigan's been working on the renovations for three months now, but the lawsuit still hovered as a possible roadblock to the luxury boxes. With yesterday's resolution, the final hurdle has been cleared and the disingenuous teeth-gnashing of John Pollack -- hero of Tienanmen Square -- and the rest of the "Save" The Big House crew is now wholly impotent and, as such, can be enjoyed in a spirit of schadenfreude. It's a go. Hurrah.

(Why yes to luxury boxes? See here.)

Mailbag addendum. A theory forwarded along from the OZone:

He's never been a guy who recruits blue chips. He runs a system that depends on selfless guys who play team ball and shoot 3s. He's always been a guy who beats you with inferior talent.

But the big advantage of coaching at UM is proximity to Detroit, which produces a ton of blue-chip talent. So how does he make sense there?

Now you have Bielien going out of state to recruit mid-major talent that fits his system. Usually you see the opposite -- coaches in areas that don't produce a lot of 5-star types going out of state to recruit them. Weird.

Sort of reminds me of Eldon Miller -- great at coaching plucky overachievers, lousy at coaching NBA prospects. Wonder if Bielien is another guy who can mold bad talent into a decent team, decent talent into a decent team, and great talent into a decent team.

This, of course, re: the recruitment of Zack Novak and other decidedly melanin-light players. Disagreements:

• Michigan already needed plenty of help going into the year, then lost Kendrick Price, Jerrett Smith, and K'len Morris during the year. Since almost everyone with decent offers signs in the fall period, Beilein has few options other than the "mid-major" talent that's still hanging around. All the high major talent is signed.
• Though the state of Michigan has a rep for producing basketball talent, the 2008 class suuuuuuuuuuucks. There are two top 150 guys, a Utah commit (who, naturally, Tommy Amaker was wary of) in the 80s and MSU commit Draymond Green at #122. Everyone else in-state is Zack Novak at best.
• Michigan is still scared to death of the Ed Martin thing from ten years ago and is running a program so squeaky-clean they've basically written themselves out of every high profile basketball recruit ever. All you need to know about Michigan's paranoia is this: Tommy Amaker was hired by Harvard and immediately ratcheted up the skeeziness.

The point about the "all talent -> decent team" thing may be true but we don't know it yet. IMO, Beilein gets a pass for this recruiting class as long as the kids he brings in are system fits and contributors. If the 2009 class looks similarly uninspiring -- and with Michigan not being mentioned by any high profile players, that seems likely -- I'll be concerned. If the 2010 class is a third, I'll be worried.

Wiggle? Western College Hockey notes an interesting decision in the women's ice hockey bracket: Clarkson was excluded in favor of Dartmouth despite Clarkson being ahead in the PWR and winning the Clarkson-Dartmouth comparison. The PWR is usually followed to the letter when choosing and seeding NCAA hockey tournaments, but the committee does have some leeway.

Some years ago the first-place Atlantic Hockey team could have guaranteed its crappy conference two bids by losing in the AH playoff final, which would have made the playoff champ a TUC and thus boosted the first-place team's TUC record high enough to make it a 3-seed. The committee made it clear that even if the upset transpired only one AH team was getting into the tourney.

Might this open the door for, like, a non WCHA team a bit? There are still seven WCHA teams in the tourney and there remains a strong possibility someone with a record below .500 will squeeze in. Declaring team X out by fiat would open a can of worms, but... maybe said worms should be opened?

Injury. Scooter Vaughn broke his jaw wrestling playfully with a teammate. Which... like. Jesus. He's out this weekend but may return next week or the week after, depending on the type of surgery and the amount of pain he's in.*

On the other side of the coin, Chad Kolarik continues to make noise like he is available this weekend:

"We'll see as the week goes on," Kolarik said. "... It's not 100 percent, but it's getting there."

Kolarik continues to get treatment on his hamstring twice a day.

He's hoping to make a final appearance at Yost Ice Arena this weekend, something that didn't look possible when he crumpled to the ice there in mid-February.

"I didn't want to go out getting carried off the ice like that," Kolarik said. "It's definitely a goal of mine to be out there and hopefully win a playoff series."

With Vaughn out, Eric Elmblad draws into the lineup for the first time in his Michigan career. He might steal five or six minutes against UNO's fourth line; expect to see a lot of the other five guys. Danny Fardig, normally a fourth-line forward, is also a possibility.

A final item: Max Pacioretty was named to the CCHA All-Rookie team, so good for him, but wasn't Aaron Palushaj jobbed out of a spot? Palushaj tied NMU's Mark Olver for most points by a freshman in all games and was second to Pacioretty if only conference games are considered. Meh.

*(Side note: I scalped a ticket for the Friday Ferris game, and after the transaction the black scalper-guy I got the ticket from gave us a hearty "Go Scooter!")

Etc.: M stuff starts to populate the adidas store, though it's way less cool than the stuff at MGoStore); more Comcast-BTN optimism.

Unverified Voracity Clarifies The OMD

A belated Happy Halloween. Bo & Lloyd pumpkins courtesy of Matthew Lipshaw & Judy Bankman.

Reminder. I've received a couple emails about the availability of this week's Michigan State game in regions of the country that aren't getting the ABC feed. To remind: over the offseason the Big Ten signed a new TV contract with ESPN that includes "reverse mirroring." In parts of the country that don't receive the ABC broadcast, the game will be on ESPN. All ESPN/ABC broadcasts are national now except the exceedingly rare instance in which Michigan plays a night game that's broadcast on ABC.

Correction. A couple emailers note that on a third-quarter Brandon Minor draw it was not Carson Butler making an excellent block but rather Martell Webb, who had replaced a gimpy Butler by that point in the game. Play description now reads:

Eight in the box for Minnesota. We have an inverted TE set with Webb [erroneously IDed as Butler earlier. -ed] in a two-point stance on the line next to Moundros in the backfield; we run a draw off this. Webb(+1) gets an outstanding block on the linebacker attempting to contain; two guys come up inside; Moundros does a good job with one. This time Minor makes the right read, shooting outside into acres of space for a big gain. Long also excellent here.

Availability. Angelique Chengelis on our wounded warrior-poets:

Q. Will Chad Henne and Mike Hart play for Michigan on Saturday?

A. Hart has missed the last two games with an ankle injury and Henne missed last Saturday's game with an injury to his right (throwing) shoulder.

Advertisement

My understanding is Hart is close to being completely healthy and will play against the Spartans. He has been running well in practice, but obviously, practice and game-speed action are completely different. Regardless, having Hart on the field will give the Wolverines a huge emotional boost.

Henne is a different issue. This is his throwing shoulder, after all. What he did in the fourth quarter against Illinois should be valued for what it was -- a monumental effort by a guy in incredible pain. This is not an injury that has been taken lightly.

Of course, Henne wants to play at MSU. He understands the magnitude of this game, not only as the in-state rivalry that it is, but also its importance in the Big Ten race.

Henne will do everything he can to be on the field, but my hunch is we'll see a lot of freshman quarterback Ryan Mallett.

The Hart stuff fits with what the Daily reported earlier this week; the Henne stuff is new. Chengelis is probably the best-connected member of the Detroit media, so I tentatively suggest she's correct. But if Henne is healthy enough to relieve Mallett should Michigan find itself in trouble, he's healthy enough to start. No doubt either would be a courageous act, but Michigan State is not Minnesota. I assume if he can, he will play, and Michigan will try to rest him when they can.

And so it begins. Michigan squashed Ferris State 78-40 last night. Didn't see the game; reports were that there were many turnovers, just as many open shots, and Manny Harris looks like he's all he's supposed to be. Highlights from the BTN:



Love the backdoor layup, and say what you want about the BTN but that level of coverage for a hoops exhibition is very cool.

OMD. Readers respond to Monday's query about the Oversized Metallic Dandelion:

Hey Brian,

My name is Mike Roarty and I am responding to your post about the giant metal dandelion thing at halftime. I work for thepalestra.com and I was on the sidelines and asked them what they were doing. They, in fact, were measuring the decibel levels within the stadium and what parts generated more noise. I have no idea if they were affiliated with the university but they all spoke Russian to one another and I was worried that they were trying to send a message to one of their old satellites or if Mir was secretly still in orbit. I have no idea why they made no mention of what they were doing over the PA system.

The Daily had an enlightening article on this:

When Navvab and his team took measurements during Saturday's halftime, they found that the sound - almost exclusively from the student section - was 100 decibels, or the equivalent of a chainsaw.

With the skyboxes, which will stand about 10 feet higher than the scoreboards and further enclose the stadium, the sound level of the stadium would reach 110 or 111 decibels, about the noise level of a loud rock concert, Navvab said.

Decibels are logarithmic, so that difference is almost impossible to believe: those numbers, if true, would mean the luxury boxes would double the noise level in the stadium. (I think. I looked it up on Wikipedia: 100 decibles creates an effective pressure of two pascal; 110 six. There's something called a sone, though, that has this text:

...a doubling of the number of sones sounds to the human ear like a doubling of the loudness,^{[citation needed]} which also corresponds to increasing the sound pressure level by approximately 10 dB, or increasing the mean square sound pressure by a factor 10.

So +10 db == 2x perceived loudness.) That would go a long way towards erasing Michigan Stadium's reputation as an unintimidating place to play. Executive Goober Stevenson must be having shaking fits just thinking about it.

Hound of Dracula! Uh... yeah.

Pity poor Zoltan. Once he was a peasant's happy dog. Then, after interrupting Dracula mid-bite, he was forever enslaved to the bloodsucking ways of his new master. After a couple centuries, Zoltan resurfaces in 1970s California, intent on terrorizing the family of Dracula's distant relatives, starting with their dogs.

Our punting space emperor vampire dog. And probably some other stuff, too.

Historian. UM-OSU 1990:



Etc.: Ezeh sentenced to probation for a May DUI; should have no effect on his playing time. Braylon Edwards is awesome; Wetzel says Long for Heisman(?); more from Bill Martin on the BTN, please contrast his straightforward approach to that of cable spokespeople; Stadium & Main envisions a titanic Carr-Miles battle in the bowl game.

Don't click here. It's Tiller-licious.

An Informed Discussion Of Stadium Finances

A key point in the stadium renovation kerfuffle is this: is the addition of luxury boxes financially sound and is there a reasonable alternative that allows the university to finance long-overdue structural improvements to the stadium? The argument in this space has been a little unfulfilling -- basically "I trust Martin and every other AD who has added luxury boxes" -- but without the financial acumen to parse out the details of the competing proposals that's all I'm left with.

This has been a huge failing on the part of the MSM when discussing the renovations: no newspaper has actually sat down with a neutral business-talking professional and hashed out the details of the competing (<-- might want to scare quote that) plans. Instead they just quote Pollack and various university administrators and provide no useful information whatsoever.

What follows is a discussion that took place on The Victors, a Michigan message board. The format of the board is such that posts die after a couple days and links within hours, so no links are provided; you'll have to trust that I didn't go insane and have this argument by myself and decide to post it as a discussion amongst other people.

Anyway, after a couple days of extensive conversations about the renovations, a poster named "rekker" came forward with a look inside the finances of the project. Rekker, like myself, is clearly pro-boxes, so keep that in mind. He is also clearly well acquainted with some inside baseball of the athletic department and has seen reports that have not been released publicly (or, if they have, have not been well-publicized):

I read the various threads on Big House renovations earlier. This is an attempt to clear up some misunderstandings about renovation costs and various financing options. These are informed, but not official Athletic Department, numbers.

1. The situation:

The Big House is an historic structure that many people love. But it is also far below modern standards in almost every area. This includes:
- Concourse areas at about 50% of recommended area per patron
- Flow into and out of the stadium at less than half the recommended rate (10-15 minutes to enter just prior to game time)
- Far too few concession areas. Temporary nature of these limits food quality as well
- Far too few restrooms and conditions that are medieval
- Until recently, a crumbling concrete foundation
- Aging and inefficient systems (power, water, HVAC, etc.)
- A press box that is (literally) a safety hazard. It is in danger of falling down.

All these things need to be addressed. Because so little was done to the stadium for so many decades, the fixes are incredibly expensive. Addressing all of these things (with the exception of the press box) will improve the game day experience for EVERYONE who attends a game.

2. Cost Breakdown:

It is somewhat difficult to separate the various categories of costs, because many costs serve multiple purposes. A key point of dispute is how to allocate common costs. For example, rebuilding the press box alone requires quite a bit of structural work (somewhere in the range of $30 million). Adding luxury boxes to the press box structure (west side only) increases the cost only incrementally (around another $20mm).

Since much of the renovation will benefit everyone, I believe it is reasonable to:

(a) Start with the things that absolutely need to be done and cost those out. These are (concrete replacement, replace benches, redo utilities). The cost of these “must do” items is around $45 million (+/- 10%); then

(b) Add items that benefit everyone and cost these out. These include improving concourses, adding second level concourses, and rebuilding concessions ($30-35mm), widening aisles and improving bathrooms ($15-20mm), and rebuilding the press box ($30mm)

-- total for categories (a) and (b) is $120mm to $130mm

(c) then add the discretionary items (club seats, boxes, club level, etc.). These total around another $100 million.


3. Translating this into annual costs. We have two potential projects to consider:

“Basic” project -- (a) and (b) alone, with a project cost of around $125mm. If we assume a capital cost of 4.5%, and repayment over 25 years, annual payments on this “basic” project would be just about $8.4 million.

“Luxury” project, with a total project cost of around $225million. If we make the same assumptions about cost of capital and repayment, annual payments on the “luxury” project are $15.1million.

4. Options for paying.

So, how should the AD pay for the projects? There are three basic options.

4.a We could charge all existing ticket holders a per game surcharge until the project is paid off. Quite a few schools have done this.

Assume 7 home games per year and 107,000 purchased tickets per game. The PER GAME ticket surcharge would have to be $11.22 per ticket per game for the next 20 years. If we chose to exclude student tickets, the surcharge on everyone else would go up.

4.b We could add more seats to the stadium. Pollack often suggests this, but the math doesn’t work out.

Assume 10,000 more seats (ignoring for the moment that this would suppress demand and cut the waiting list dramatically). For the 10,000 new seats to pay for the “basic” renovation, the seats would have to sell for $120 per seat per game ($8.4mm / 7 games / 10,000 seats). Put another way, assume these seats averages $50 per ticket, they would only generate about $3.5 million annually, or approximately 40% of the cost of the basic renovation.

So, this option does not come close to paying for the basic renovations.

4.c Let the 4100 people who would like a premium experience pay for the whole thing. The basic math is as follows:

3200 club seats. Average required donation is 2500, plus the $350 ticket cost. Add in some parking and concessions and call it $3000 per seat per season (this is very conservative and does not assume any extra donations). This leads to $9.6 million in incremental revenue.

83 boxes at an average license fee of $70,000 per season. This leads to another $5.8 million in incremental revenue.

So, the “luxury seating” costs around $6.7 million per year, but generates around $15.4 million in incremental revenues. The cost of the total project is around $15.1mm, so the revenues generated by the luxury seats pay for all of the improvements!!!

=== === ===
The bottom line is that the “luxury seating” pays for the entire project, even though it accounts for only around 40% of the project costs. The only way Pollack and the "Save the Big House" crowd show it doesn't work is to assume that the entire $226million cost is only for luxury boxes. They then add things like interest to the cost--which anyone who has taken even basic finance will tell you makes no sense because it is double counting.

Note that this analysis also assumes that every box and club seat holder contributes only the minimum amount. Because locations are determined by donations, many people will contribute much more than the minimum, thereby ensuring that the people in the premium seats pay for everything.

Pollack his buddies refuse to acknowledge a couple things.

1. That major renovations are badly needed and that the majority of the costs of this project will benefit everyone at the Big House.

2. That their alternative financing options don’t come close to paying for badly needed renovations. Martin’s plan puts the entire cost on 4000 people who are happy to bear it. Pollack’s approach hoses everyone and doesn't cover the cost, he just doesn’t like to admit it out loud.

3. That the Big House has never been egalitarian. Regents sit in a Regents box. Until the PSL was implemented, tickets between the 20s were allocated on a “who you know” basis. I know people in the AD, so I was able to acquire 45 yard-line seats a few years ago—no payment, no waiting list. This is the antithesis of egalitarian. Pollack likes this mythical kind of egalitarianism because he is connected. But it shuts out everyone who is not. Scarce resources have to get allocated somehow. Given that the AD needs money to compete, allocating seats via donations is much more “fair” than doing it through the old boys network.

4. Demand for both the boxes and club seats is strong. The AD just sent out a brochure to Big Ballers (annual 5k contibutions) about two weeks ago. They already have deposits on 35 boxes and around 1,000 club seats. 90% of Victors Club members have not even been contacted year and inventory is already running short.

5. Finally, the fact that opponents are whining about “process” just shows that they have lost on the merits.

The stadium renovation came before the Regents four times. Pollack spoke to the regents once. He asked for and was given a spot to speak at a second meeting, but he didn’t show up. He is whining about being denied a chance to make his point FOR THE THIRD TIME!!! Does anyone think that if Pollack would have been allowed to address the Regents one more time, he would have changed any votes? Obviously not.

Everyone who knows about other schools experiences with luxury seating, and about the finances of the project believes that this is a slam dunk. 99% of the objections are either of the type “I don’t understand and you can’t proceed until I do” or complaining about process.

None of that matters now. Martin and the AD are bringing the Big House into the 21st century and creating a financial model that will allow U-M to compete for decades.

An initial complaint:

Ignoring the rest of the post for a minute, do you really think that point 5 is valid?

If I come thump you on the head and take your wallet, you might well complain both about the outcome (I now have your money) as well as the process by which I got it. Just because you complain (or as you say "whine") about the process doesn't "show" that you are "wrong on the merits".

Come on, if you are going to try to be levelheaded and analytical here, resist the urge to chuck in stuff like that.

Rekker responds:

I don't agree. Pollack and most opponents major talking point over the past few months has been that he couldn't get on the schedule for the final Regential approval.

I am not trying to say that the process was perfect. It wasn't. But then no process is. It was not, however, snuck through. The renovation came before the regents 4 times--with public comment. Martin and the AD discussed it in numerous interviews and held a series of public info sessions, also with long and long-winded public comment.

The people who make the decisions are fully aware of what the objections are. They allowed opponents to make their case and then made their decision. That is very different than suppressing comment. Pollack (and I assume your) position was heard loud and clear. You just lost the argument. Your voice wasn't supressed.

If the opponents best argument is about whether the agenda for the 4th hearing was announced 48 or 72 hours in advance, that tells me the rest of their argument is pretty weak.

From a strict logic point of view (like your wallet example) opponents could have both a process and a substantive point. But since 99% of the objections are now about trivial process points, I think the best interpretation is that they really don't have a substantive point.

A rebuttal from an off-board person who's pro-Pollack:

This is from a friend of mine who is very pro-Pollack and the other Save the Big House folks. I thought your take was great. What's your response to his?
________________________________________

I guess i just didn't realize michigan stadium was such a sh!thole. no wonder most people only make it to one game a year. i'm trying to figure out how we can sucker 110000 people to put up with such squalor for 2-4 hours every saturday, i guess we can just chalk it up to billmo's brilliance...

this is one guy's opinion, he can make up numbers and "facts" and twist them anyway he wants. the big house plan is another guy's opinion, they can call each other all the names they want but it doesn't change the actual facts. below are the high level points of the big house plan, but most importantly for me it doesn't destroy the stadium visually or alter its character...and it increases capacity by 10000. Also, keep in mind all this bullsheeet about how they'd HAVE to raise ticket prices to pay for the project without Martin Boxes is a load of crap. The PSL's bring in an additional $12 mil/year, 99.99% of that is pure profit baby. The department has $40 mil in cash stashed away. The true cost of all of the renovations minus the Martin Boxes is more like $50 - $60 mil (this is directly from an Ann Arbor News graphic of the different proposals based on info provided by the Athletic Department). Do the math on how long it would take to pay off with no ticket surcharge.

The Big House Plan:

1. Was developed by a national, all-volunteer team of Michigan architects

2. Adds 10,000 bleacher seats instead of private luxury boxes, bringing capacity to 117,001

3. Achieves all consensus goals outlined by U-M officials for the stadium, including a new press box with modern facilities for U-M officials and the media, wider seats and aisles, ADA-compliant seating, and more restrooms and concessions

4. Costs $93.1 million (including debt service)

5. Pays for itself without a ticket surcharge and generates net revenue from day one

6. Protects Michigan Stadium's quos status as the biggest in the country

Rekker responds:

First of all, my numbers are solid (based on documents from the AD and from Barton Malow, the construction company).

Second, there are a couple of logical errors in your friend's response. The PSL money and the cash on hand already exist. You can't start new spending and say "it pays for itself" because your plan involves raiding the cookie jar.

The "basic" plan described below comes in around $125 million, or $8.4 million per year. The "Save the Big House Plan" people used to say they could do things for $60million, then $90million. But it was pointed out that they leave a lot out (utilities, second level concourses, etc.). My impression was that they had stopped talking about the financials of their plan because they are so farcical.

As to the raiding the cookie jar fallacy, consider the following. Let's say you have saved $100,000 for retirement, but you wife wants to buy a Mercedes for $105,000 and wants to spend the retirement money. She indicates that she thinks she can make $10 a week ($500 a year) with the new car by delivering meals on wheels. If she came to you and said "the new car pays for itself over 10 years" ($10/week * 10 years = $5200) would you agree? If so, I hope you never plan to retire.

That is what the STBH plan consists of. Grab a bunch of resources already commited to other things and claim that this grab "pays for" their plan.

Doing the financials the way I did (project incremental costs, project incremental revenues, match them up and discount) is the right way to do this. The STBH financial plan is three card monty.

These guys have a goal and are simply backing into "plans" that support the goal, whether these plans make sense or not. They then try to shift the burden to the Athletic Department to prove their farcical plans are wrong.

That's not how these things work. U-M has a system. The athletic department is responsible for its own finances. It works with the U-M CFO to work out details and make plans. They then present these to the President and th Regents for approval.

All of this has happened, with input along the way from the public. Just because some joker like John Pollack makes up some numbers and demands equal billing with the officials authorized to make these decisions does not mean that everything must come to a halt until he is satisfied (which we all know he never will be).

Another anti-box complainant:

...it will take 25 years or so to pay this off, so on an economic basis, it won't generate any new revenues for the athletic department until about 2035.

What it will do is change and update the stadium and, as you say, use the well-heeled folks to pay for it all.

However, your financial scenario predicts a revenue income stream of only a few hundred thousand more than the required debt servicing on the project.

It also assumes that all 83 luxury boxes will be rented each season for the entire payback period and that the preferred seating also will be purchased during that time.

To quote Aesop, you are counting your chickens before they've hatched.

In my experience, that's a pretty large and likley very wrong assumption and I would bet a large sum of money that every box will not be leased each season over a quarter century as competition for entertainment dollars grows, the Michigan economy fluctuates, and the fortunes of Michigan football ebb and flow.

In your economic scenario in only takes 5 luxury boxes to not be leased, and that puts you under the required annual revenue stream needed to be generated to service the debt.

Also, you cannot assume that the average $70,000 yearly rental fee will stay the same (I would assume that it will increase), and that as a result of increases, tenants will be gained and lost.

My guess is if you keep a lease rate of 90 percent (about 74 suites), you will be doing well.

As Winged Victory has stated, there are private donations the university is trying to generate and counting on to help offset the initial cost of the project. But once again, that makes another assumption -- that the cost is going to remain $220 million.

No doubt this is the price as best can be figured today. But U-M will be extremely lucky if that is the end cost for such a large project (I'm going to make an assumption that Bill Martin has already accounted for that) because cost overruns are almost certain to occur.
As you've probably heard, the prices of metals is skyrocketing currently because of growing demand for steel in Asia, and given the amount of steel in this project, it's going to be affected.
Also, you cannot be sure that ADA compliance and other architectural unknowns aren't going to pop up and push the cost higher. And then you have the weather, which can either lower your costs by cooperating, or increase them by not cooperating.

Overall, you've nailed the numbers pretty good, but I still think the numbers your state are too rosy a scenario given the unknowns.

However, as you say, what are the alternatives? Funding stadium upgrades by raising ticket prices to the point where you risk alienating your core base of customers seems like a bad bet. And a ticket surcharge might work, assuming it will be dropped after the improvements are paid for. But I have seen few public entities willing to do that. Once they get a taste for the extra money rolling in, they find a way to make it permanent.

Rekker:

1. The key point is not whether the club seats and boxes generate a few hundrew thousand more or less than the entire carrying cost of the rennovation. The key point is that they cost around $100mm and generate enough cash (to a first approximation) to pay for a $226 million project.

2. Most of this stuff has to be done anyway. using my assumptions, these "have to do to bring us up to acceptable" items cost around 8.4 million a year. The AD COULD fund that stuff out of it's overall surplus, but why do so if people like Rick Waggoner, Bill Davidson, and Steve Ross are saying "let me fund it". The incremental cost of the luxury seating is around 6.7mm per year (15.1 - 8.4). If the luxury seating generates 14.5 instead of 15.4 mm per year in revenues, U-M is still FAR FAR ahead of where it would be without the luxury seating.

3. Most assumptions in the AD projections are very conservative. For example, carrying costs will be fixed but required donations are likely to increase 3-4% annually.

Also, I have assume NO donations beyond the required minimums. These levels will clearly be exceeded--probably by 7-10 million per year.

You are right that there are potential downside risks. But these are more than offset by the deliberate ignoring of a lot potential upside risks.

If this were an investment in which they were selling equity, I would be buying lots and lots of equity. That's not to say it is riskless, but the overwhelming majority of the uncertainties are on the upside, not the downside.

A second response from an informed poster:

you hit on an important point, which is why the Athletic Department hired a firm to research the demand for the boxes, as well as prices ect. I have never read a copy of the report, but seem to recall that their recommendations were that M could build as many as 100 or so boxes and that the average cost could be much higher than it is, and that the demand was there. The athletic department intentionally chose a number of boxes (83) that was well below what it was projected they could sell them at, and an average cost that was well below the recommendations ($70,000 or so). In fact, I believe the minimum cost was raised from $45,000 to $55,000 based upon the fact that the research showed the $45,000 figure was way below market value.

And I believe that the only stadium that had trouble selling all of its luxury boxes and club seating was MSU. Even then, the reports from MSU were that, even though there luxury boxes were not all sold, the luxury boxes led to a very significant increase in private and corporate donations directly from the box owners, and more than justified the construction of the luxury boxes.

This gets to an important point, which is that Martin's projections did not include any increase in donations, income from selling the names of the luxury boxes (apparently there is some demand for this), income from selling the names of the concourses and common areas, and a very significant bump in advertising revenue from having permanent concessions areas with far more visible advertising space, as well as the second level concourses and the staircases. This income will be very significant and was not included in any of the calculations.

How much will the naming rights bring in? Rekker:

The donation for naming each tower was well into seven figures.

I don't think the AD would be happy to see the exact number out there, but it was several times more than a million.

Right, all this comes with an "OMG INTERNET" disclaimer, but I see no reason to believe any of these people are taking the gullible for the proverbial "ride". If there is an anti-box counterpoint to the numbers expressed above that's significantly more rigorous than the one Rekker demolished, send it to me and I'll post it up for people to evaluate.

I kind of doubt such a thing exists, but, hey, Notre Dame won a game against a BCS school. Miracles happen.

Unverified Voracity Suddenly Hates Cartoons

Status. Another suggestion of Hart's health, this from the man himself:

"Yeah, I'm playing next week," Hart said after the game, heading across the field into the tunnel. Later he added: "Yeah, I could have played today."

Fingers crossed; I expect he'll go. Indications on Henne are murkier, and though at the moment I expect he'll start I think there is a nonzero chance he's unable to go.

Fine. Fine. Fine. Seven hundred people have sent this to me, so you've already seen this. But in an effort to stem the tide:



I dunno... I was hoping for more.

The Razor's Edge. Right, the Department of Education dropped a 42-page document of doom (pdf) on the athletic department yesterday. (Free Press article.) I've read many opinions; these are mine:

• Michigan is going to have to conform. Both Notre Dame and Ohio State ran up against this and had to conform; Michigan will be next.
• This will make the renovations more expensive, but if the Hero of Tienanmen Square is sipping champagne underneath a giant painting of himself, declaring victory, he's got another thing coming. More cost yields more motivation for the luxury suites. At worst this issue is orthogonal to the renovations.
• Thousands of seats will be lost to this. Combined with the seat-widening, the overall capacity of Michigan Stadium is going to drop unless additional seats are added.

The major issue, IMO, is the seat thing. It's long been a point of pride that Michigan has the largest stadium in the country. When the renovations were first proposed they featured a several-thousand seat reduction in capacity; this, met with hue and cry, was quickly repaired. A 7000-9000 seat hit would be tough to stomach.

Speaking of tHOTS, the New York Times again writes on the skyboxes at the prompting of Pollack. Please remember this whenever he or his ilk presents information:

Practically from the moment Martin submitted the plan for skyboxes, Pollack has been obsessed with defeating it.

Everything he says is aimed at that goal; things like "facts" are to be discarded when inconvenient. Pollack is a former Bill Clinton speechwriter and, like anyone who has crafted the things politicians say, is trained in the art of deception.

The really offensive portion of the Pollack campaign is the disingenuous assertion that the boxes will cost more money than they make. Occam's Razor screams that said assertion is preposterous: everyone has built them in a period when collegiate athletic revenue is skyrocketing. We are supposed to believe that Martin, and Bill Martin alone, has cobbled together a plan that will actively hurt his university. No possible motivation is provided for this, probably because it's hard to think of one other than megalomania.

Pollack is essentially a professional liar attempting to inflict the point of view shared by his particular social circle on the university at large. He's also breathtakingly arrogant:

Mainly, though, Pollack argues that the University of Michigan simply shouldn’t be the kind of school that sells skyboxes to high-rollers; it should be better than that. “Michigan doesn’t need to keep up with the Joneses,” he said. “We are the Joneses.” He added, “One of the great things about college football, especially Michigan football, is that it is a great public space — a place where autoworkers and millionaires can come together to cheer on their team.”

Yep. Autoworkers and millionaires coming togeth--

Annual Gift Category - 2006 Results

Champions Level ($20,000 or more)	4-8 Season Tickets in the Victors Tier
Leaders Level ($10,000-$19,999)	2 Season Tickets in the Victors Tier or 4 Season Tickets in the Valiant Tier
Wolverine Level ($5,000-$9,999)	2 Season Tickets in the Valiant Tier or 4 Season Tickets in the Maize Tier
Go Blue Level ($2,500-$4,999)	2 Season Tickets in the Maize Tier or 4 Season Tickets in the Blue Tier
All-American Level ($1,500-$2,499)	Up to 4 Season Tickets in the Blue Tier
Captain Level ($1,000-$1,499)	2 Season Tickets in the Blue Tier or 4 Season Tickets in the End Zone
First Team Level ($500-$999)	2 Season Tickets in the End Zone
Varsity Level ($100-$499)	No Season Ticket Assignment; Special Ticket Offer "Go Blue Pack"

Oops. That damn reality, always messing with utopia. Pollack is attempting to preserve something that no longer exists, if it ever did.

Historian. Michigan-Ohio State, 1991:



It's a 300-level class. Michigan zingers re: MSU countdown clock:

• Johnson: “I guess they can keep time. I guess if they need that for motivation, to get ready for the game, good for them.”

• Cornerback Morgan Trent: “That’s cool. Whatever, we know when the game is. So that’s fine.”

• Carr: “I can remember checking my watch just to make sure I knew what time it was. The only clock I’m concerned with is mine.”

Michigan Against The World has a recap of great moments in the series.

Oh God. Unofficial MGoBlog cartoonist Joel A. Morgan sent in a doozy this week. Sadly, I don't know where he lives so I can't send him a bomb flower basket in appreciation:
So there you go. I'll be over here in this hole, hiding.

Etc. A conversion tale from the NYT; MVictors on the inspiration of 1898; MZone has the worst thing ever said by a member of the athletic department.

Unverified Voracity... Fuck Yeah!

Minor relief. Michigan Sports Center is reporting that WXYZ, channel 7 in Detroit, will also carry the Michigan-Minnesota game.

America! Fuck Yeah! Whenever there are flybys at football games, it's impossible not to get the above-mentioned song stuck in your head. I mention the above-mentioned because there was possibly the sweetest flyover ever -- fuck yeah! -- at the Illinois game:



Only competition I can think of was an A-10 flyover a couple years ago at Michigan Stadium.

Press conferencing. Attempting to limit youtube embedding these days so Macs (boo) running Firefox (woo) don't implode, so just links to this week's press conferences before the Minnesota game:

• Carlos Brown
• Chris Graham
• Brandent Englemon
• Purdue Girl Desperately Seeking Desmond Tardy

Worst ever. Right, as mentioned in UFR:

Gophers football coach Tim Brewster admits it makes him a little nervous, but he announced Tuesday that he will start three true freshmen in the defensive secondary Saturday at Michigan.

Kyle Theret has moved from safety to cornerback and will replace senior Jamal Harris, who was benched for the second half last week. With Curtis Thomas at free safety and Ryan Collado at right cornerback, the Gophers will start the three freshmen together for the first time this season.

Normally this is where the desperate plea to throw the ball, by golly, goes, but, yeah...

#	Player	No	Gain	Loss	Net	TD	Avg	Long
1	Shamen Washington	1	7	0	7	0	7	7
2	Pat Paschall	12	90	3	87	0	7.3	18
3	Ryan Parsons	1	4	0	4	0	4	4
11	Steve Walker	6	16	8	8	0	1.3	10
28	Pete Blincoe	5	29	0	29	0	5.8	13
40	Tyler Roehl	22	266	3	263	1	12	77
198	Team	2	0	4	-4	0	-2	0
	Totals	49	412	18	394	1

...given what NDSU did to them, Mike Debord can call the same play 80 times and it won't matter.

Shouldn't you be grading things or something? Crotchety Michigan faculty have weighed in against the stadium renovation:

The University of Michigan Senate Assembly, the elected body that represents faculty, passed a resolution Monday evening urging the university to reconsider the $226 million renovation to Michigan Stadium in light of serious concerns raised by more than 600 U-M faculty and staff.

The concerns:

They're concerned they weren't adequately consulted about the major plans of the iconic stadium.

"In short, U-M administrators behaved more like oil company executives evading environmentalists than stewards of this university community," said Keith Riles, professor of physics at U-M, who supported the resolution.

Why wasn't Keith Riles, professor of physics, consulted about luxury boxes at Michigan Stadium? Uh... perhaps because he's a professor of physics? These complaints arise from the regents meetings wherein the stadium votes were added to the agenda late -- after the public comment slots had been filled. So, like, whatever. Have another vote and let the Hero of Tiananmen Square and physics professors have their say and vote on it again with the same results.

I've made the case for luxury boxes before; no need to rehash it. Until Pollack and others can provide some hard numbers on how concerned the citizenry is about luxury boxes they have no ground to stand on.

Hey, whoah. Normally sunny Angelique Chengelis gets in some not-so-oblique shots at Ryan Mallett in her latest Detroit News column:

....if you saw the Illinois game on television, the ABC cameras picked up a heated exchange between Carr and Mallett on the sideline after a Michigan offensive series.

Mallett put his head down and tried to move away, but Carr, who clearly was not finished with his "advice," pulled Mallett back and finished the lecture.

What does this indicate? Plenty. Quarterbacks and players rarely jaw at, ignore, or laugh in the faces of their coaches. I have heard from numerous sources who say Mallett simply needs one more ingredient to begin to fulfill his potential of being a great quarterback at Michigan -- he needs to mature. ...

Mallett is engaging and a treat for media to interview, but he needs to grow up fast if he's going to lead this team next season.

Also worth noting in this line of criticism is Carr's terse response to a Mallett question after the Illinois game:

“He’s got a lot of things he needs to improve on,” Carr said.

FWIW, I've also received a couple notes along these lines, one about as well-sourced as these things get. The situation here is precarious; without a major attitude adjustment things could be very sketchy at quarterback next year.

Historian. Again, trying to cut down on the embeds. Wolverine Historian has clips from the 1983 OSU game and the '91 ND game (featuring the Desmond Howard catch).

Etc.: Michigan Monday (yes, I know it's Thursday); TV assignments delayed for the MSU game; would not be surprised if, as long rumored, Michigan-MSU is on the BTN.

The Case For Luxury Boxes

An email:

Today I write to you wanting to know your side of the story about the luxury boxes. I assure you I'm not a journalist or anything. I just want to hear what you thought about the renovations. From your latest blog entry, I can deduce that you support the luxury boxes. I'm interested to know why. I have been caught between the argument for a while. I'm a life-long Michigan fan; 2 hours after I was born, my dad bought me a teddy bear with a Michigan sweater and hat. It sits next to my bed to this day. Whenever he was able to purchase tickets, he would take me to the game. I want the Big House to be louder, and I want tickets to stop going up in price (this year it's $204!). But at the same time, I hate the idea of catering to the rich, blocking out the sun that would shine on the student section, and ending any possibility of being the Big House. I'm caught up with my feelings of nostalgia.

I hope that hearing your side will help influence my opinion, but it will not dictate it. I look forward to continuing reading your blog everyday. Possibly next November, you could do a piece on the Blood Battle between Ohio State and Michigan. I'm one of the four students in charge of it. We are always looking for any type of publicity. I really want to win both the game and the Blood Battle while I'm a student here.

Thank You for Your Time,
Brian Talpos

(Remind me about the blood battle.) An answer:

First off, it's completely reasonable to have reservations about the luxury boxes. It's completely reasonable to hate the idea of them. Not everyone who hates the idea is the Hero of Tiananmen Square. Their addition is a serious matter worthy of discussion. Where tHOTS goes wrong is by assuming that because a bunch of his NYC friends think it's just awful that luxury boxes might be installed that he speaks for the Michigan fanbase. I know that the sometime strident opinons expressed here may give off the impression that I look down upon those who disagree. Not so: I only look down upon those who would try to twist the reality of the situation to serve their own opinions.

What follows is a point-by-point debunking of what I think are the main points espoused by those who oppose the installation of luxury boxes. The finale is an argument in favor of their addition in the absence of (hopefully dismissed or at least mitigated) concerns.

Luxury boxes are going to cost the university money. This assumes that Bill Martin, the guy who brought Michigan kicking and screaming into the modern era of collegiate athletics, has no idea what he's doing when it comes to dollars and cents. No matter that he's a lifelong business entrepreneur. No matter that he spent years as the president of the USOC. No matter that every move he's made at the Michigan AD has been to wring money out of ticket-holders, donors, sponsors, and anyone who walks by.

I think 80 dollar Appalachian State tickets suck just as much as anyone else, but Michigan fading into obscurity is worse. Clearly having shiny athletic palaces is a way to help avert obscurity. It's complicated. I'm annoyed by Michigan's building spree as a ticketholder but pleased as a fan. I just think that anyone who's been paying attention should acknowledge that Martin has erred on the side of filling the athletic department's coffers. He's gone from a Goss-era deficit to a sixteen million dollar surplus. The idea that he's flipped out and decided to install luxury boxes just so he can have a place to host cocktail parties no matter the cost the university goes against everything on his track record.

Luxury boxes are going to break an egalitarian utopia. There were no protests when Martin instituted PSLs that socked people based on their seats' location. There have been no protests about the distinctively capitalist way season tickets get allotted: donate a ton of money and get good seats. Michigan Stadium has always been about getting people to pay an awful lot of money to sit in it. Despite the appearance of a unified proletariat all sitting on their benches, I can tell you that I have sat on the twenty, on the forty, in the student section, and in the endzone and that the character of each location is vastly different. I have sat next to men in hunting caps wearing pleather Red Wings jackets and looked down on them. I have sat in front of well-coiffed elderly women who have looked down on me. I have had elderly men yell at me for standing up because everyone in front of me has stood up. I have loathed and been loathed because the people in Michigan Stadium have differing ideas on what constitutes appropriate behavior. Always have. Always will. The installation of luxury boxes makes concrete (ha!) a distinction that has long existed.

And it's a small step towards giving everyone what they want. They provide a way for people with differing definitions of the word "better" to coexist. My definition of "better": I can see everything. I can hear Ron English bark out commands. I can hear the band. I can see Mike Hart sweat. Rich mofos' definition: I have a roof and pate? Sweet. Without boxes, the only status these people can have is sitting on the fifty, occupying seats that I could have without their fur-clad indolence. Providing these people really expensive status markers that don't impact where I can sit can only be a benefit.

I am touchy about this tradition stuff. If Martin announced that he'd be putting in the sort of advertising that's all over Ohio Stadium I would be livid. But that's something that directly affects me: I see the advertising, I feel that the tradition of Michigan Stadium is evaporating. The opposition of luxury boxes on tradition grounds is about objecting to someone else experiencing a game "better" than I am, but better to who? I don't want to sit there. While they're busy thinking of me as an insignificant plebe, I'm thinking "thanks, suckers." My experience is not degraded just because someone else is paying a lot of money to have a nice time.

Luxury boxes are going to hurt the stadium atmosphere. Though commenters brought the Daily article I linked which asserted that the local noise levels would double into considerable question, I don't think they conclusively dismissed it, if that was even their intent. One of the arguments put forth by luxury box opponents is that the removal of a certain number of fans from the lower bowl will reduce noise levels. This relies on doubtful assumptions:

• the sort of person who ends up in a luxury box made any noise whatsoever before being placed in the luxury box
• the luxury boxes don't contribute any acoustic benefits to the stadium
• neither do the luxury boxes contribute any general shock and awe to the stadium.

Though I hate to credit Ohio State with anything, I must admit that the stadium itself, even devoid of fans, is a more imposing edifice than Michigan's. Penn State, too. A large part of this increased bad-assery of their stadium consists of vertical walls of steel and glass. Michigan's proletarian bowl is nice but most neutral observers think it somewhat lacking. Michigan Stadium is basically a very large hole in the ground. From the outside it looks squat and mildly homely. The inside has the same sort of brute-force grandeur that the distance between stars or anything associated with some incredible number does, but is lacking in on-top-of-you intimidation. Compare Ohio Stadium...


...to Michigan Stadium...

...and you can just see the noise escaping into the sky.

Why add them?

The addition of luxury boxes will charge a certain subset of fans who treasure certain things I don't an exorbitant rate. These fans also happen to be the sort of fans who A) don't make any noise whatsoever and B) glare at you when you do. A relatively small number of rich as sin fans will get a place within which they can consume tartare and wine without having to tolerate the sort of people who go "AAAAAAAH" before every third down. In exchange, I get to benefit from their willingness to pay thousands of dollars to attend a football game without enduring their glares when I attempt to aid the team we're all watching by screaming real loud.* The money the boxes generate will help Michigan keep pace in the facilities arms race. The boxes themselves will increase the noise levels. From the outside they will look badass.

Ultimately, they will help Michigan win, and that's what I care about.

*(Or, rather, I get to benefit when my compatriots yell real loud. I am only nominally a boisterous fan, since I freak out when the stakes get too high and sit there, paralyzed into silence, wondering how my life is going to turn out based on the outcome of the next play. In the real world, the "best" fans in terms of pure noise are not the ones who are most invested in the outcome but the ones who really care who wins the game while simultaneously understand their ability to shrug off a disappointing outcome. I meet only the former qualification. Viva Downriver, never leave us.)