Tuesday October 07, 2008
The Great Depression?
The Great Depression?
Since I have no money, I have not been obsessed with the economy and the doom and gloom. I do understand even us poor folks are losers in all of this. I did not contribute to the trillions of dollars lost in the stock market over the past week but I do understand how the economy will affect me and my family in the long-term.
I spent a couple of hours yesterday watching and listening to CNN, Fox Business News and Fox News. I also listened to several financial talk shows throughout the day. While I have no idea what some of the concepts are about, I do take a common sense approach to our current issues and what it means to the future.
How severe is this fallout? Is a depression in our future? When will it end and what will be salvaged?
I don’t have the answers and doubt anyone really knows. But I turned my attention to areas where my interest will effected and one of my main concerns is sports.
Among other items, I want to know how the economy will affect local, regional and national sports at the high school, college and professional sports levels?
How will Clemson be affected?
I think there are several concerns from Clemson’s standpoint including:
Tuition
Clemson University is one of the most expensive schools in the country. One economist claimed on Glenn Beck’s television show that students across the country will not be able to secure student loans in the next 12 to 24 to 48 months. I am not sure what the demand will be in the next few years at Clemson. This is an area that will have a direct impact on athletics at Clemson.
Enrollment
Later this month the Clemson board of trustees will be presented a plan to drop the percentage of in-state students and increase the number of out-of-state students. The university makes more money on out-of-state tuition and could create more revenue by accepting a higher percentage of out-of-state students. The current guidelines are 65% in-state and 35% out-of-state but the board is scheduled to hear a proposal to move towards 60% in-state and 40% out-of-state. I think this has long-term and short term effects on athletics.
IPTAY
The discretionary dollar will be stretched tighter. If the economy is headed down drastically and if it is long-term then I think IPTAY could prepare for major setbacks. Hopefully I am wrong. But I don’t think it is an unreasonable concern at this point.
Tickets
Tickets cost more and people have less to spend. I can see attendance being an issue especially if you consider the entire cost of attending. Gas prices, food prices, IPTAY, parking and tickets and the escalating cost may make it difficult for some families.
The West Zone
Clemson sold the original rights to the West Zone Club tickets for five years. Those tickets will be up for new terms in the next two years. How much can Clemson charge for these premium seats in a terrible economy?
Coaches’ Contracts
Oklahoma’s Bob Stoops make $6.5 million a year. Southern Cal’s Pete Carroll earns $4.4 million per season. Notre Dame pays Charlie Weiss $4.2 million per year. Assistant coaches salaries are also rising at astronomical rates. Can schools continue to see the escalation of coaching salaries?
Fires and Hires
Can schools afford to buyout contracts and then pay the next guy even more? I can remember too many times where the new guy makes less than the old coach.
Olympic Sports
I can see attendance at Olympic sports increasing if some cases because the cost is so much less. However, I can also see less interest because of the competition for the discretionary dollar.
Capital Campaigns and Facility Improvements
Phase II of the West End Zone should be complete soon but Clemson is currently trying to raise money for the baseball facility. Thank goodness they have made significant progress there and are set to make some announcements soon about major gifts in baseball. This area could be affected in the future by slowing down ideas of future campaigns and improvements.
Television
The ACC’s next television deal may be affected by the economy. Advertising rates not be as high as once thought because the advertising dollar may be drying up. One of the keys will be the length of the recession. Another will be the number of viewers. Advertisers may be even more scared of putting dollars in this league in a bad economy especially if the product is down. However, maybe ratings will be up because people can’t afford to go to games and more might be forced to stay at home and watch on TV.
Corporate Dollars
As the economy worsens the sponsorship dollars dwindle away. Clemson depends on the corporate dollar for tickets, the West Zone Club, luxury boxes, game program advertising, radio and television broadcasts, etc. if that dollar slips away Clemson may have a hard time making up the difference.
Car Dealers
I was told that one of the major concerns of the economy is the automotive industry. One report has as many as one in four car dealerships not surviving the upcoming year. This is an important factor because of the university’s dependence on dealer’s courtesy cars.
Summary
In the end, there are probably more questions than answers on this subject at this time. I do think that a poor economy only increases the importance of winning. If Clemson is going to be competing with the same competition for a smaller pool of money then it will be forced to differentiate itself from the others. To me the way to do that is winning. When everyone has a full allotment of money and everyone can be happy then winning is important. But when the competition for that dollar heats up then a winning presence is much more important.
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Credit TB for getting a fat contract extension before these economic woes started.
Posted by Tiger TC on October 07, 2008 at 10:40 AM EDT #
Good blog. I doubt tuition or enrollment will be affected mainly because they have far more people apply than they accept. Maybe the number of applications would drop, but then they would just have a smaller pool of students from which to choose. The big losers will be IPTAY and the West Zone, because many donors will scale back their level of giving, and just give enough to keep their seats. Then you will probably see them raise the rates for good seats, which will just pass the pain onto the season ticket holders.
I seriously doubt that coaches salaries will be impacted because a good coach generates far more excess revenue than what he and his staff are paid. Just look at the difference between the payouts of the BCS bowls and the non-BCS bowls. If you can pay a good coach a couple million more and get into the BCS bowls on a regular basis then it is well worth it.
Posted by Locotiger on October 07, 2008 at 11:03 AM EDT #
Strange blog...
Isn't there a football game coming up on Thursday???
Posted by Zeus on October 07, 2008 at 11:49 AM EDT #
Mickey,
If you also remember on Glenn Beck's show, Peter Schiff, owner/ founder of EuroPac (europac.net) mentioned the fact when less are able to pay tuition the cost HAS to go down. (kind of like the whole Regeanomics theory).
Anyway, the issue which you need to be concerned about is real inflation. When the FED prints more dollars, the dollars already in circulation lose their value therefore causing your dollar to be worth less value and does not hold the same purchasing power.
With that said, though you have no money, your salary is primarily based on those of us that do and have jobs unlike yours. So, when we start losing jobs because businesses have to cut back due to lack of cash flow (that is the main problem being created with tighter lending, less equity in the stock market, etc.) Then you, too, will loose income.
Posted by RobertsonCU on October 07, 2008 at 12:02 PM EDT #
It's a huge cycle which can't be dealt with gov't policy, regulation or the like. It has to iron itself out with the free-market adjusting loans, house values, etc. The gov't is only going to postpone the inevitable collapse of the dollar and make the situation far more severe.
Start buying non-perishable goods, guns and ammo! They'll be important during a great depression.
Best of luck to everyone.
Posted by RobertsonCU on October 07, 2008 at 12:02 PM EDT #
Mickey...'Clemson is one of the most expensive schools in the country'? Either you need to clarify this comment, or get out of south carolina a bit more. CU is, perhaps, overpriced considering its a state institution.
Posted by alabamatiger on October 07, 2008 at 12:03 PM EDT #
Enrollment
Later this month the Clemson board of trustees will be presented a plan to drop the percentage of in-state students and increase the number of out-of-state students. The university makes more money on out-of-state tuition and could create more revenue by accepting a higher percentage of out-of-state students. The current guidelines are 65% in-state and 35% out-of-state but the board is scheduled to hear a proposal to move towards 60% in-state and 40% out-of-state. I think this has long-term and short term effects on athletics.
WTH!!!!! Out BOTs and President are out of control!!
Posted by cu_tiger78 on October 07, 2008 at 12:09 PM EDT #
Mickey,
I believe IPTAY was going to see a drop in giving next year anyway. The biggest increase in giving was at the $1400 and $2100 levels. That was also where the most requests for seat changes came from. But no one below $2800 got better seats in the south lower deck. People are going to look at what they "got" and, in many cases reduce their giving to the minimum level to keep those seats. I know several $2100 members who buy 4 or less tickets that are (still) in the $70 seats. Are they going to keep paying that much just for...... a parking space? I doubt it even if things were not so financially uncertain.
Posted by Walhalla Wildman on October 07, 2008 at 12:15 PM EDT #
Clemson is one of the most expensive schools in the country? Since when? You need to get out more and do some research.....
Posted by Justwannaread on October 07, 2008 at 12:42 PM EDT #
IF TOMMY BOWDEN WERE ALIVE DURING WORLD WAR II, WE WOULD ALL BE SPEAKING GERMAN!!!!!!!!!
FIRE TOMMY BOWDEN NOW!!!!!
Posted by tiger7272 on October 07, 2008 at 12:57 PM EDT #
I think increasing out of state students is very short sighted for Clemson University. Sure, we will get more tuition dollars up front. But do we honestly think that Joe Palooka from New Jersey will stay in the state of SC after graduation and contribute to its economy. No, he will mone back to Joisey, and Clemson won't get one more red cent from him.
Posted by JCTiger82 on October 07, 2008 at 01:17 PM EDT #
Alabamatiger and Justwannaread,
I did the research and then double checked again this afternoon. Clemson had a tuition increase again this summer but even before the latest increase, Clemson was one of the ten most expensive tutions in terms of public schools in America.
Posted by Mickey Plyler on October 07, 2008 at 03:11 PM EDT #
Football please:
"-- Bowden reiterated that there are no plans to play backup quarterback Willy Korn because Harper hasn't done anything to warrant a change. "
Is TB blind? I could go on and on why Harper was main culprit in the Maryland game. The first drive, he has a 3rd and two in the red zone. He stepped up to pass with no pressure on him, he could have run the two yards. He only looked left, he had a receiver wide open in the end zone if he only looked right. Then, he lackasdaisally threw it out of bounds to the left. That was one of his game-losing mistakes. If they had gotten the touchdown then, they would have won 21-20. I hope Harper turns it around, as now he is in a confidence-losing Proctor-like slump. Hope I am wrong - very wrong and Harper has a great game, it will be his first great game in 7 games. We are 3-3 in last 6 games and all 3 victories were patsys. And Cullen did not even look good in them. GO TIGERS! PLEASE MAKE MY PROGNOSIS LOOK BAD!
Posted by captron on October 07, 2008 at 03:12 PM EDT #
the fact that clemson is now one of the most expensive public universities is ridiculous since about 6 years ago it was considered one of the best values on the country. the increase in tuition every semester has become a joke. also if you want to get some good info on the financial crisis try cnbc instead of fox business news. i know some will say cnbc is more "liberal" but they have been around for a long time and know their stuff.
Posted by projektdarc on October 07, 2008 at 03:45 PM EDT #
Alabamatiger and Justwannaread,
I did the research and then double checked again this afternoon. Clemson had a tuition increase again this summer but even before the latest increase, Clemson was one of the ten most expensive tutions in terms of public schools in America.
Posted by Mickey Plyler on October 07, 2008 at 04:03 PM EDT #
There are several problems with the tuition argument, Mickey. First of all, Clemson is routinely considered a good value in terms of the education received. Second, public schools across the country have been increasing tuition over the last 10 years, just like Clemson has. Third, and most important, Clemson is a victim to whatever the state of South Carolina chooses to spend on education. Because our state is both relatively poor and has no problem cutting funds for public institutions like Clemson, tuition increases are not surprising. Why do so many people seem to forget that fact?
Posted by Judge Keller on October 07, 2008 at 07:44 PM EDT #
Judge Keller,
I was not making a judgement or argument. I was stating a fact. Clemson is one of the top 10 most expensive public schools in America. Also colleges are concerned because student loans will be difficult. I was not passing judgement. I said it will have an impact in athletics and that is a fact. The Olympic sports will have a more difficult time and IPTAY gets hit harder. Just facts.
Posted by Mickey Plyler on October 07, 2008 at 08:18 PM EDT #
projek,
MSNBC is pretty liberal, especially that flaming socialist Olberman, the huge exception being Joe Scarborough. CNBC is pretty darn conservative and their anchors are very conservative. I'm a big time libertarian and vote Republican, and watch CNBC almost all day, every day.
Posted by flatiger66 on October 07, 2008 at 08:35 PM EDT #
Just do whatever it takes to get Bill Cowher here and we'll figure the rest out later.
Posted by Big Case on October 07, 2008 at 09:39 PM EDT #
They're all a joke. How can you say they are conservative? CNBC laughed when those that were talking about the market dropping drastically not more than 3 months ago. Now, they all agree it's bad!
If you think any of those media organizations are fair and balanced or conservative or liberal you are just lying to yourself.
America is sheep. How this affects Clemson is pretty apparent, less people will be able to afford tuition, till the gov't gives more loans that are just falsified money that will ultimately create greater inflation.
I really suggest those that care watch the videos of Peter Schiff that are on his website. www.europac.net
He's been saying this was going to happen since 2002, but yet, no one predicted this...
Posted by RobertsonCU on October 07, 2008 at 09:40 PM EDT #
robertson,
the ANCHORS/personalities on CNBC are by and large all conservative. You aren't listening to them if you think otherwise. Also, you are incorrect about their predictions. They have varied opinions on every topic and always have people taking BOTH sides of EVERY topic they discuss, among their own experts as well as on air guests.
wow, someone started saying the market was going down in 2002? only took him 5 years to be right. not that it was a stretch to think that after 1999/2000 tech bubble, then after 9/11, 2001.
The market goes in cycles, like the economy in general. pick a direction and stick to it and sooner or later you'll be correct. I bet you $1000 it will rain soon!
From 1920 to he early '80s the Dow climbed to 2,500. Then in only 15 years it rocketed to over 12,000. Doesn't take an expert to surmise that can't be maintained and will spend years bouncing around before the next trend.
Posted by flatiger66 on October 08, 2008 at 04:37 AM EDT #
oh, and LOTS of people predicted the market would drop, and they did it years ago, but again, there are always bears and bulls regardless of the direction the market is currently trending. they are called contrarians. the stock market is legalized gambling, always has been.
Posted by flatiger66 on October 08, 2008 at 04:47 AM EDT #
flatiger66,
Yes, there are bull and bear markets and they have been up and down through history, but no one explains WHY.
Peter Schiff has and tackles the root problem, not just the fact it's going to happen. (YouTube Peter Schiff 2002).
I do watch those media outlets and for the majority of them to say the bailout is necessary is ridiculous and NOT conservative, by any means.
The real issue with the current bust is the inflation. If you don't understand this concept, I can explain it to you, but it has NOTHING to do with price, but how much your dollar is worth.
Posted by RobertsonCU on October 08, 2008 at 11:47 AM EDT #
LOL, I understand inflation, been following finance since I was 10, have a Clemson Finance degree, an MBA, and work in the money industry.
Plenty of people explain why markets rise and fall. To say otherwise is ludicrous. Like everything in life, there are cycles, tides, seasons. We run, then rest, then run again. Tons of people have independent theories. Schiff just happens to offer one you buy into.
People are micro, the economy macro, but like we spend n save in cycles, as our income allows, so goes the economy.
CNBC was saying the bailout was NOT necessary and had plenty of guests on all last week with alternatives. They bluntly questioned and debated Paulson and members of Congress about the plan and discussed alternatives.
Posted by flatiger66 on October 08, 2008 at 02:47 PM EDT #
Finance 101 includes inflation and the "time value of money".
Posted by flatiger66 on October 08, 2008 at 03:03 PM EDT #
flatiger66,
Since you are such a big time libertarian, you must agree the fiat monetary situation creates the boom and bust with the centralized planning? If not, what kind of libertarian are you? Do you buy into the Keynesian economics?
Posted by RobertsonCU on October 08, 2008 at 04:54 PM EDT #
Robertson,
Check your TMail.
Posted by flatiger66 on October 09, 2008 at 04:04 PM EDT #