He’s the economics professor who last summer insistently pointed out that, despite lies from the administration about it, MSU’s new stadium was hemorrhaging money. Continues to hemorrhage money.

Olsen took a lot of grief for this, but he continues swinging, especially in light of a state audit that reveals just how corruptly MSU has been run.

Now that MSU has a new president (wouldn’t want the old president in place anymore, to be held accountable for having fucked up the school), and a new, damning audit, the school tries to figure out what to do…

While MSU dithers, old Reed pops up again.

… Missouri State needs to find ways to better fund and operate the facility, said [the new president], who has formed a task force to look into this matter.

Olsen, who last year disputed a university claim that the arena was paying for itself, questioned the makeup of the committee, saying it consists of people who were part of the problem.

Olsen wants the university to be honest with JQH’s accounting.

As MSU digs deeper and deeper holes, Reed Olsen will be there, trying to tell it what to do to get out of the holes. MSU will certainly not listen.

… which is a start, but the story of Missouri State University’s long-term lies about its finances should be on the front page of the New York Times.

What seems a quiet story about a provincial public campus having lied to the state, the NCAA and its own university community about how much money it’s losing to sports, and about how it’s making up the difference by soaking students, is in fact not merely a national scandal in itself, but a story powerfully symbolic of the pourriture (for this degree of degeneracy, only the French word will do) big-time sports has brought to so many of America’s universities.

Before I quote from the two stories – one local, one Associated Press – let me direct you to various posts on this blog starting in 2010, when a baffled UD (numbers not being her strong point) wrote to an economist on MSU’s faculty – Reed Olsen – who has been insisting on the financial corruption of his university for the last fifteen years, during which he has been ignored and reviled.

So here’s Olsen pointing out that MSU’s new stupid unaffordable basketball arena was not in the black (as the school was thrilled to announce), but deeply in the red. Among the tricks MSU played, Olsen singled out this one:

They [are] hiding costs by allocating costs to the old arena, whose costs more [than] doubled when it quit being used. So on net it seems that the arena [is] losing about 2 M.

In ’01, with the money hemorrhage on full boil, boosters proposed that “the accounting of the [new] arena be combined with Hammons Student Center and Plaster Sports Complex,” which would make things look ever so much better. But

Former State Auditor Susan Montee last year specifically warned against mixing the finances of JQH Arena with other university sports facilities.

“In that way, it would not be transparent and nobody would be able to tell,” she said then.

Fuck transparency! says desperate, desperately stupid Missouri State, which, it now turns out, has been for years sending bogus athletic spending numbers to the NCAA.

This is from the brief AP report:

[A] multimillion dollar discrepancy [between what MSU says it’s spending on sports and what it’s really spending] stems from sports-related expenses, mostly facilities and administrative support, that Missouri State didn’t include in the athletics department budget. For a decade, the university also left out those costs and related sources of revenue, such as various student fees, when filing annual reports with the NCAA.

And here’s the headline on the more detailed local report:

$16 million? Try $25 million: New Report Reveals True Scope of MSU Athletics Spending

If MSU hadn’t systematically shut down Reed Olsen year after year, this wouldn’t have been much of a revelation.

Anyway. Let’s look a bit closer.

In the reports [to the NCAA] covering the fiscal years from 2005 to 2013, the only facilities costs MSU reported to the NCAA were lease payments for baseball at Hammons Field, which averaged a little less than $200,000 a year.

For 2014, the university reported $0 — an error, according to [University president Clif] Smart, who said the baseball lease, about $210,000, was mistakenly lumped into the “other expenses” category on the report.

And:

Prior to the report for the 2015 fiscal year, the information reported to the NCAA was taken primarily from the athletics department’s operating budget, which does not include administrative support offered by other university departments, or — most significantly — the millions of dollars the university spends each year on bond payments, maintenance and utilities for athletics facilities.

Anyway. Ahem! Today is a new day:

[T]he new report from MSU makes clear just how much of the bill is being subsidized by students and the university. Of the $25.2 million spent last year, $15.9 million came from student fees and university general revenue.

The president of this quintessentially provincial, regional school, puts it all in perspective:

“The kind of university we see ourselves as plays Division I sports — we’re not Division II, we’re not a regional school.”

The latest econ professor to squawk about his or her university’s sports program – Colorado State’s Steven Shulman – reminds UD to mention that she thinks we’ll see, in a few years, at some schools, litmus tests for new hires in this field.

Are you an avid fan of football and basketball? Will you sign a pledge attesting to your intention to attend home games into perpetuity, your willingness to cancel class when a match-up will take place within 72 hours of a scheduled course session, your commitment to give C or higher grades to revenue athletes in your classes, and – most important – your promise never to subject the athletic program to economic analysis or talk to news outlets about your economic analysis of the program?

Econ professors are a seriously weak link in the American jock school chain. This blog has covered tons of economists who, with their specialized knowledge, subject their athletics departments to withering critique and then tell everyone about it. Here are some instances of professors, who, like Shulman (‘“Of course it sucks resources out of the academic side of the university,” Shulman said. “And it’s dishonest to deny that it does that… We are a land-grant university, and our mission is grounded in service to the citizens of Colorado. And to me what that means is keeping tuition low and affordable.”’), go after the game boys.

Remember Reed Olsen? Back in 2010 he told everyone at Missouri State University that their expensive new JQH stadium would not only not be profitable (the university insisted it would be profitable) but would hemorrhage money, and he caught hell for it. But of course he was right. As he explained in an email to UD at the time:

Let’s say that we are looking at a $2M ongoing loss in the arena. This is slightly more than 1% of the operating budget of the university. The university, because of a new state law, cannot raise in-state tuition more than [the] increase in the CPI. And for the last 2 years all universities in the state have agreed to not raise tuition at all in return for mostly stable state funding. So that means that most of this $2M must come out of cuts from other parts of the budget or the small increases in student fees from increased out of state tuition or other types of student fees. Students are assessed a fee for [the arena] which supposedly pays for free student seats at BB games. However, that revenue is included in the accounting, still leaving $2M left to pay. Faculty concern is that it comes out of our pocket.

If you’re Missouri State you definitely do not want people like Reed Olsen on your campus – people with the capacity to reason about the finances of your sports program. A simple interview questionnaire teasing out Olsen’s prejudice against sports programs would have saved MSU a lot of grief.

Then there’s Mark Killingsworth at Rutgers, a person just as persistent and tough-skinned as Olsen. Here’s a sample Killingsworth editorial. Excerpt:

The program is a financial disgrace. Since 2003-04, it has racked up $287 million in deficits. The university’s financial plan for sports calls for $183 million in additional deficits through 2022 — despite new revenue from the Big Ten Conference.

These deficits have been funded with subsidies from student fees (students have no say about that, of course) and university general funds. As even the university president concedes, athletics is “siphoning dollars from the academic mission.”

Then there’s Dick Barrett, once a University of Montana econ professor and now a state senator. He routinely offends UM regents by pointing out that their accounts of the athletic budget are full of shit.

Barrett called “bogus” the regents’ argument that millions of dollars in tuition waivers for athletes shouldn’t be counted as subsidies because no cash changes hands.

Tuition waivers for athletics totaled $8 million last year for all campuses, including $2.8 million at MSU, according to Frieda Houser, University System director of accounting and budget.

The university could have decided to “sacrifice revenue” in other ways, Barrett said. “It could decide not to charge other students as high a tuition.

“Students are subsidizing athletics, not just in their (athletics) fee, but they have to pay higher tuition so athletes can pay lower tuition,” he said.

There’s UD‘s pal Bill Harbaugh, econ, University of Oregon, exploding the myth of the program’s self-sufficiency. Vanderbilt econ professor John Siegfried is amusing on the subject of his and other schools’ prisoner’s dilemma. There’s Marilyn Flowers, chair of economics at truly sports-fucked Ball State:

… Ball State has more than $14 million budgeted for its athletics programs. Approximately 80 percent of the budget is paid for from student fees – almost $9 million – and institutional support – almost $2.5 million.

“When it costs so much for kids to go to school, and you charge them $800 a year and most of them don’t go to any games, that I think is really unfortunate,” Flowers said.

Even Auburn hears occasional squawks from its econ department. The chair of economics there warns that sports is so autonomously powerful on campus that it represents “a second university.”

As jock schools escalate their policy of robbing students and taxpayers to give multimillionaire coaches raises and pay back crushing stadium debt, the last thing they need is financially literate people exposing their … complex… bookkeeping. The entry interview is their only opportunity to head these people off at the pass.

… relentlessly unmasks that university’s sports lies (background here). Like Reed Olsen at Missouri State University, Killingsworth is part of a special breed of university professor: A smart economist able to detect all of the bs universities put out about how lucrative big-time sports on campus are (or will be; it’s almost always got to be will be). So for instance, in a recent opinion piece, Killingsworth writes:

Its report to the NCAA shows that the subsidy to [Rutgers] athletics is $28 million: $18.5 million from discretionary university funds and another $9.5 million from student fees. None of these funds are earmarked for athletics — the university is free to spend those dollars on anything it wants, or even hand them back to students and their families as tuition reductions. All told, the subsidy amounts to almost $1,000 for each undergraduate. The student fees alone work out to almost $330 per undergraduate.

Nevertheless, Rutgers officials from [President] Barchi on down repeatedly refer only to the $18.5 million in discretionary funds as a subsidy. They never mention student fees. Sayonara! $9.5 million in subsidies conveniently disappear.

Killingsworth barely touches on the reputational costs to Rutgers of its absolutely endless athletics scandal. He doesn’t need to.

… is an expert in performance management. Under her authority for the last three years, MSU has become arguably the most mismanaged, most under-performing campus in the country.

A humongous sports fan, Bradbury successfully pushed for JQH Arena, MSU’s new money-hemorrhage machine. Reed Olsen, an MSU economics professor, tried to explain to Bradley and MSU’s president and everybody that the arena would be a disaster, but they were too dumb to listen. They all beat up on old Reed. Nobody at a university – least of all its leadership – wants to read damn fool reports with lots of statistics and shit in them.

Okay but now they’re like losing tons of money I mean like what the hell happened? and now it’s time to sell beer there and chisel more fees out of undergraduates and rent out the place to well jackshit anybody I guess and I dunno fuck with the numbers…

The task force recommends the accounting of the arena be combined with Hammons Student Center and Plaster Sports Complex to create a “true” financial picture of athletic venues.

Dunn said the three facilities currently share resources such as personnel.

Former State Auditor Susan Montee last year specifically warned against mixing the finances of JQH Arena with other university sports facilities.

“In that way, it would not be transparent and nobody would be able to tell,” she said then.

… Professor James Gundlach and other university sports whistle blowers, Missouri State’s Reed Olsen, an economics professor, has had the guts to expose financial corruption in that school’s athletics program. Background here.

A state audit of MSU’s budget (its results will be released this fall) will presumably clarify how the school’s leadership dissembled in the matter of the profitability of a big new arena it pushed through over strong faculty objection. But without Olsen’s insistence on the truth (despite the president’s assurance that the arena was profitable, it was, and remains, a big loss), the attention of the MSU community, and the attention of far-flung people like UD, would not have been drawn to this all too typical university scandal.

In his dissenting minority report, presented to the faculty senate at about this time last year, Olsen pointed out that the administration was both inflating the revenue stream and hiding the operating costs of the new arena.

To make matters worse, but again totally predictably, arena ticket sales are down.

Any administrator who tells you that ticket sales will support a sports facility takes you for a fool. Ticket sales are madly volatile almost everywhere. Yet again and again administrators think that if you raise prices when the shit hits the fan, things will be fine.

Actually, when you do that, a lot of people drop the whole thing in disgust and stop going to games. I mean, they don’t do this at truly degenerate schools like Kentucky. You could make season tickets seven million dollars apiece at Kentucky, and there wouldn’t be a peep out of anyone. But at most schools you can expect a bit of a walkout.

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Bottom line at MSU? Olsen writes (in an email to UD):

… Let’s say that we are looking at a $2M ongoing loss in the arena. This is slightly more than 1% of the operating budget of the university. The university, because of a new state law, cannot raise in-state tuition more than [the] increase in the CPI. And for the last 2 years all universities in the state have agreed to not raise tuition at all in return for mostly stable state funding. So that means that most of this $2M must come out of cuts from other parts of the budget or the small increases in student fees from increased out of state tuition or other types of student fees. Students are assessed a fee for [the arena] which supposedly pays for free student seats at BB games. However, that revenue is included in the accounting, still leaving $2M left to pay. Faculty concern is that it comes out of our pocket …

Indeed Olsen concluded his minority report last year by affirming that the new arena has plenty of “negative impact on the academic mission” of MSU. He reminds the administration that the university’s faculty warned that “the university would [end up paying] for the costs incurred by building a new arena.”

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Why do I call this a typical athletic scandal?

Because again and again on this blog I watch jocksniffer presidents and mindless boosters lie and bluster their way to what they want and then make students and faculty – and taxpayers – pay when their pathetic fantasies evaporate.

Universities desperately need rational, informed, steadfast, and ethical professors like Olsen to act as a counterweight to the moronic grandiosity of their sports-mad leaders.

… confused. And in the case of Missouri State’s new basketball arena, she just does not get it.

Unfortunately, after studying the numbers with care, Mr UD, a math whiz, doesn’t get it either.

This seems to be a story about a university president who fell somewhat short of the truth when claiming that in its first year the arena was in the black. An economics professor at MSU, Reed Olsen, ran the numbers and came to the conclusion that it was in the red – hundreds of thousands in the red.

Part of what makes this story difficult to understand — beyond the whirling numbers — is the odd way the Springfield News-Leader has chosen to present it.

One half of its page features the news that the university is now reviewing the arena’s finances. Oh, and there’s a new president. The old one suddenly left. Didn’t say why.

Check out the other half of the page for the hard numbers.

You don’t have to read Andrew Zimbalist to know that many university athletic programs … is cook the books too strong? There’s obviously lots of numbers-shifting going on here as the university now seems to acknowledge that it was wrong to claim a profit… But I really don’t know. I’ve emailed Professor Olsen about it.

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Update: Professor Olsen responds:

After my report to the senate and a subsequent followup with the president, the newspaper dug up more information that showed that the arena was doing even worse than I had originally thought. They were hiding costs by allocating costs to the old arena, whose costs more [than] doubled when it quit being used. So on net it seems that the arena was losing about 2 M.

I’ve gone on to ask him several more questions. I’ll report some of his answers when I hear back from him.

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From the News-Leader’s comment thread:

I and many others told you so. Now, the admission – this thing ain’t paid for.

And, the News Leader buries the story as a sideline.

What many of us said when this boondoggle was announced, what the students reported in their paper when it was learned their academic fees were being stolen, and what the faculty found by analyzing the accounting is all true – this ego pacifier for boosters who want to be like Mizzou is a financial lie.

This is not the end of the scandal. This “2 million” from athletics is a shell game. Athletics already operates with about $5-7 million (admitted) in state funds to make up the yearly deficit, so this is STATE MONEY. Once again the state and students are made to pay for the sports fantasies of wannabe boosters.

I’m pressing this story on University Diaries because, like the scandal at Western Kentucky, it’s shaping up to be the paradigmatic corrupt university sports story — it’s turning into a classic case of the destruction of a university via its sports program. Its apparent elements, shared with virtually all other death-by-sports university stories:

1. Corrupt, sports-mad leaders who cannot think about the improvement of their university in terms other than athletic. (Jealousy of a higher-profile neighboring university also seems at work in these stories.)

2. Toadying faculty willing to lie along with the president and the athletic director about the sports budget.

3. Students who sense what’s happening but don’t have sufficient power and knowledge to fight it.

4. One or two brave faculty members willing to fight against the lies.

5. An inept local press whose boosterism allows it to be manipulated by the leadership of the university.

A local person comments on an article welcoming yet another year of on-field nothingness and off-field bankruptcy to Missouri State University (background here).

MSU, with its recent history of sports accounting scandals, is gearing up for another Samuel Beckett season (I can’t go on I’ll go on), degrading itself to the big boys in sure-to-lose games in order to pick up a check; sending its latest interim interim interim president out to say to the press that they’ve got to keep football because it gives the school band something to do… And because a program like MSU’s “helps build student spirit” …