Scott Tibbs
Hoosier Review
April 3rd, 2004

Back to Opinion page.

Reject the "bailout fee"

The Indiana University Board of Trustees is proposing a mandatory $30 fee on all students to help alleviate a structural deficit in the Athletics Department. Supporters of the fee say it would relieve about half of the deficit for the Athletics Department, caused in part by lagging football ticket sales and by contract buyouts.

One of the problems with the football ticket sales is the ticket prices. The price of individual game tickets discourages sales, and if the University wants to increase football attendance they should consider lowering football ticket prices. Such a move may actually increase revenue if the increase in sales that would result from a price cut overcame the loss from each individual ticket. For example, if I sell 10 widgets for $10 apiece, I can make more money selling 15 widgets for $8 apiece.

This season's discouraging performance aside, Indiana University basketball is significantly more successful than IU football, and IU basketball has a much stronger following than IU football. If IU fielded a good football team, more fans would come. But many would buy tickets to support the team and enjoy the experience but are not willing to pay the price IU charges. It is a simple issue of supply and demand: not enough people are willing to pay what IU wants for the product it is selling.

The mandatory $30 fee should be rejected. The Athletics Department has been mismanaged for years. The Indiana Daily Student published a blockbuster story revealing that the Athletics Department had misreported its financial situation, claiming that the budgets were in the black when they were actually running a deficit.

YearReported surplusActual deficit

This story (also reported in the Indianapolis Star) raises some serious questions. Were the reports intentionally falsified? If so, who is guilty of falsifying the data? If this was an honest mistake, how did the Athletics Department manage to make such a large error? There needs to be accountability for this problem, and Adam Herbert himself should demand answers. When you combine false reporting with mismanagement, it becomes clear that IU students should not be forced to subsidize the Athletics Department.

The Athletics Department had gotten itself into trouble by signing long-term guaranteed contracts to coaches and administrators who have since been released from the University. Should students have to pay for this poor judgment? The University should avoid such financial commitments in the future, or at least not release highly-paid staff with guaranteed contracts and bring in another highly-paid replacement.

The fee is not without its opponents. Several student leaders, including both the outgoing and incoming Presidents of the Indiana University Student Association, are openly opposing the new fee. As well they should. While athletics are an important part of a university's image and a source of enjoyment for many, athletics are not the core mission of an educational institution.

What is worse is that students will not even be getting any benefit from this fee. While the transportation fee gives students access to the Bloomington Transit bus system, this is basically a tax on students to keep a failing enterprise afloat.

Another angle to this story is the coverage of Bloomington's main newspaper, the Herald-Times. The H-T reported on the story of student leaders opposing the mandatory $30 fee the day after the IDS ran a story on it. While the April 1 Indianapolis Star and Indiana Daily Student revealed the hidden Athletics Department deficits, the story was nowhere to be found in that day's Herald-Times. Since Indiana University is such a big part of the community the Herald-Times serves, the H-T must do a better job of keeping up on these major stories.

Now is not the time to be taxing students for the mistakes made by the Athletics Department, especially considering the lack of accountability in auditing the books. This fee should be rejected, and an alternative method of raising revenue (or cutting spending) should be pursued.