Maybe Barry can chime in on the pros and cons of going this route.
Oh, and they voted to KEEP Engler as president.
Oh, and they voted to KEEP Engler as president.
MSU issuing $500,000,000 worth of bonds to pay for settlement
- Thread starter ChiTownLion
- Start date
I certainly don't claim to be a financial guru but it's not like the $500,000,000 will materialize out of thin air. Say people buy the bonds. There will be a financial return for them. Over time MSU will be paying back the $500,000,000 plus interest. Where will that money come from? Their general fund which includes tuition dollars as well as state contributions? Maybe MSU expects a financial windfall from investments and donations which will then be used to cover the bonds. But like The Rod once said, the money is fungible.
How much will they pay for slurring Paterno and Penn State?
Assholes.
Assholes.
And how much will the Big Ten hold back and redistribute? And when is Delany’s presser to discuss this tragedy and the many victims?
Please take this opportunity to remember that Penn State has a culture problem.
Why isn't this being funded by the MSU athletic department? Runaway gymnastics culture...................
I don't know about Michigan State, but PSU does NOT have a cash-crapping unicorn.They really only have two choices (since their current liquid assets - last I checked - were about $200 Million.... which is no more than a reasonable level for the size of their operation).
They could issue debt, or they could raid the endowment .
Issuing debt is the far cleaner method - and, for the Suits, the far preferable method.
That way, the burden simply shifts to the "revenue sources" (ie The Students) over the next couple of decades (Much like PSU does to bankroll Lubert/Dambly Inc).
FUNGIBILITY!
Of course, the absolutely inane, ludicrous, can't-believe-anyone-is-so-stupid-to-give-it-any-weight BS propaganda will be that "This isn't coming from Tuition or State funds" (just as it was at PSU).
Apparently ALL Higher Education "Leaders" would have us believe that they have a Cash-Crapping-Unicorn stashed away in the Admin Building.
This will bring their overall level of debt up to near PSU's debt level - - - - FWIW.
Of course, there are also 10,000 differences between the MSU financials and the PSU financials - - - - so any "comparisons" are solely curiosities.
Speaking of "curiosities", the $500,000,000 in settlement funds? If MSU set their tuition levels equal to PSU's, they would generate MORE than that $500 Million in extra revenue - in less than three years.
Kinda' puts some perspective on a few things.
Everybody knows we have a secret printing press in the basement of the Hammond Building.
I would think that the bond rating may be impacted negatively by retaining Engler and the university would be better served by ousting him and making a clean break with the past. Their Board is still in a defensive posture but keeping a leader tied to the controversy isn’t going to help you in the bond market. Since he is an interim president anyway they could help themselves to speed the transition (move on). They need a clean sweep - someone focused on rebuilding public trust in the institution rather then letting these wounds fester. There will still be more information coming out of internal investigations. You don’t cut the tail off a dog an inch at a time.
There are very few people who really know PSU finances. Our Board paid out somewhere in the vicinity of $500M with no money coming from tuition, state appropriations or endowment. They did not float a bond issue either. So clearly, there is another revenue source somewhere...the PSU Corporation, maybe?
well, I am glad the victims are gaining some level of justice. However, hate to see what is happening to MSU's charter. This will adversely affect the charter of a state school, and that is to provide a good secondary education at a reasonable cost.
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Well, that clears that up. Just an unfortunate circumstance that could not have been prevented or at least minimized. Bummer.
If anyone should know all about hot messes, it's Mitchie-Poo.
I'm giving you a like for the Cash-Crapping-Unicorn.Apparently ALL Higher Education "Leaders" would have us believe that they have a Cash-Crapping-Unicorn stashed away in the Admin Building.
Seriously, glad you responded, I appreciated the info in your post.
Have a nice weekend.
Step
Penn State should buy all the bonds. I'd die laughing if the Paternos bought some.
Depending upon the length of the bonds, they could spread maturity dates out to 30 years and only have coupon payments. Though the rate will increase over time to lure investors. This will give them time to budget the repayments more strategically one would think. Basically kicking the can down the road for now on the balance sheet.
Thanks for posting as we know one would hardly be able to find this anywhere on E$PN, BTN, or for that matter other TV, print and digital media outlets.
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Yup. The rating services already downgraded MSU in anticipation of the settlement funding. So it now can expect to pay a higher rate on all of its borrowings. Not a good thing for an institution that runs an operating deficit and has $1.1 billion of unfunded retiree health benefits.
This is very bad news for the school and its future students.
Once again, the innocent pay for the sins of those who went before them.
Harvard, the University of Pennsylvania, Drexel, and for businesses Yeungling, Wawa, Publix, and Mercedes come to mind. All are well run by exemplary leaders.
Yeah, not only does the media not seem to care for the most part, but neither does the general public. Not only that, perception is so different. With the Sandusky thing, anyone associated with Penn State was vilified. Yet I see with Michigan State, talk about how most Sparty folks are good people. I am sure they are but damn if this is not night and day from what many of our folks experienced.
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Just who the hell does Mitch Lyons think he is? OF COURSE HE SHOULD GO! He and Joel Ferguson should have been the FIRST to go. Their BOT guys should have been walking the plank immediately after LAS and that goofball med school dean, Dr. McFeely or whatever the hell his name was.
These guys, words fail me. Our BOT schmucks AND theirs. In what world does the ceiling cave in on their watch, and they think for an instant that they are somehow special, that they get tagged with none of the responsibility.
Mitchie, Joel and the bunch should be spending the next 20 years on their hands and knees filling in potholes on M-53 somewhere in Monroe County.
