Hold That Bottom Line

by SCOTT DYER
A few hours after the LSU Tigers wrapped up their last home win, a 27-24 victory over Ole Miss on Nov. 20, work crews began to demolish the western upper deck of Tiger Stadium.
The Tiger Athletic Foundation (TAF), the fundraising arm of the Louisiana State University Athletic Department, is overseeing the $60 million replacement of the 25-year-old upper deck and plans to have it finished in time for the football team’s Sept. 3 home opener against North Texas State.
LSU Athletic Director Skip Bertman says the massive project, with a 10-month time frame, is a great example of how much faster and more efficiently the TAF can complete construction projects than the university itself.
As a private nonprofit foundation, the TAF isn’t subject to the bureaucratic red tape that surrounds and sometimes engulfs state projects. By contrast, the university must follow state bidding regulations and go through the state’s cumbersome capital outlay process, which requires approval by the Louisiana Legislature.
“The TAF can move faster than we can,” Bertman says. “When they bid something out, they’re not subject to the rules that the university is. So, for instance, if they bid something out, after they bid it, they can come back and negotiate this or that and even rebid. And that makes them more efficient.”
The TAF began in 1978 as the Varsity Club, a fundraising organization for the athletic department. It was reorganized into its current incarnation in 1987 but only funded its first construction project in 2000 – the east-side expansion of Tiger Stadium. Bertman has no official role in the TAF, but as athletic director, he approves all its projects, along with the campus chancellor, the LSU system president and the LSU Board of Supervisors.
According to Bertman, LSU is the only major college football powerhouse in the Southeastern Conference – and possibly in the entire nation – that has to contend with a state law limiting the role of its athletic foundation, a law that restricts the amount of money funneled into the TAF through football ticket sales.
Most of the revenues that the TAF uses for construction projects like the ongoing Tiger Stadium face lift come from surcharges imposed on the sale of LSU football tickets.
Fans who buy their tickets through the TAF pay a donation or surcharge of at least $50 a seat for the privilege of buying season tickets.
But Louisiana law limits the number of tickets that may include a surcharge paid to fundraising groups such as the Tiger Athletic Foundation to 12 percent of a stadium’s capacity, plus whatever new seats that they add in expansions.
The TAF added the 11,600-seat east upper deck in 2000, which included 70 luxury boxes that rent from $24,000 to $48,000 per season. Under the law, the TAF may receive a surcharge on those seats created in the east-side expansion, plus 9,500 or 12 percent of the 80,000 seats that existed in Tiger Stadium before the east-side addition.
Bertman tried unsuccessfully to persuade the Louisiana Legislature to pull the plug on the 12 percent law for the TAF in 2002. When that failed, the school began requiring fans to make donations to the LSU Athletic Department.
“We were trying to raise the 12 percent to about 47 percent of the seats, with the money going to the TAF, and then they [the foundation] could do whatever I wanted them to do,” Bertman says. “Like if I wanted a new baseball field, the TAF could get an architect next Tuesday and begin immediately.”
Among those legislators who opposed Bertman’s efforts to modify the 12 percent limit on TAF tickets was state Sen. Jay Dardenne, a Republican from south Baton Rouge.
“The Tiger Athletic Foundation has done a tremendous job as a fundraising arm of the university, but there’s no question that there’s the potential for abuse. I don’t think it would ever happen with the TAF, but there is that potential when you have in essence public-works projects being done in the private sector,” Dardenne says.
He adds that he understands that most other SEC universities depend upon foundations like the TAF, but said he wasn’t ready to give the TAF any more power to start projects outside conventional state channels.
Because of the limitations placed on the TAF, Bertman says he’s having to construct a new LSU baseball stadium through those channels.
Even though the university has enough money to build the $23 million baseball stadium, it will take until 2008 to complete that project because of all the red tape in the state construction process. “If the TAF was doing the new baseball stadium, it wouldn’t take nearly that long,” Bertman says.
In the meantime, the Tiger baseball team will continue to play its home games in 67-year-old Alex Box Stadium, which has no suites, no locker room for visiting teams, no TV or radio booths and no covered batting cages, as most SEC ballparks do.
“Alex Box has tremendous sentimental value, of course, but our fans and our athletes deserve a better facility,” says Bertman, who coached LSU to five national championships in baseball before he retired and became LSU athletic director.
Bertman notes that most of the baseball stadium’s 7,760 seats are located in metal bleachers that were gradually added as LSU baseball grew in popularity. The original grandstand at Alex Box Stadium seats only 2,500.
LSU is the only school in the Southeastern Conference that hasn’t built a new baseball stadium in the past 20 years.
“Some people look at what’s going on at LSU and say, ‘Well, we won in 1958 without these things.’ The truth is that nobody had these things. And starting about 1985, we started to fall way behind other schools,” Bertman says.
While college baseball will always have a special place in his heart, Bertman says LSU’s football program is key to the success of the overall athletic program. “What makes any program successful is first-class football – football is the engine that pulls the train.
“Money generated by the football program helps not only to build new facilities for all LSU sports, but also keeps LSU’s athletic program self-sufficient,” Bertman says.
He adds that the TAF is an important reason why LSU
doesn’t rely on student fees or state dollars to cover even basic athletic-program expenses, such as tuition, books, room and board for student athletes.
“Everything [funding those expenses] is ticket sales, corporate sponsors and private donations,” Bertman says. “Not all schools can do that, but many do in the SEC, like Florida, Tennessee and South Carolina.”
the Tradition Fund
Sen. Dardenne says he suggested Bertman move forward with an alternate plan to have the university’s athletic department – not the TAF – collect a surcharge on season football tickets. “My view was that Tiger Stadium is a public arena, and the LSU Athletic Department, which is regulated by a publicly appointed board of supervisors, should be responsible for controlling the seating in the stadium, and that’s what happened with the procedure that was set up,” says Dardenne, who is a LSU alumnus.
Beginning last season, LSU slapped “personal seat licenses” on every season-ticketed seat. In addition to paying the standard admission price of $36 per game, season-ticket holders are now required to purchase licenses costing between $85 and $400 from the LSU “Tradition Fund” for every season ticket.
Bertman says the Tradition Fund is working well to generate funds to construct athletic facilities, but he would still like to have the 12 percent limit on the TAF removed.
“It’s not as good as having the TAF collect the surcharge because the TAF is so efficient when it comes to construction projects,” Bertman says.
Dardenne says he has mixed feelings about allowing the TAF to handle construction projects in order to avoid state regulations, noting that other public colleges around the state are using foundations to build projects such as dorms and entire campuses.
“I guess the concern is that if everyone started creating these foundations to do all public-works projects, you would in effect do away with the public bidding process completely. But the flip side is that it’s done efficiently, and it’s done quicker, and it’s done, in many cases, at less expense by allowing these foundations to raise money,” Dardenne says.
“It’s a balancing act, and I want to continue to see this balance struck,” he adds.
Bertman says the TAF is now “tapped out” because of the state’s 12 percent rule.
“The TAF raises from $4 million to $6 million a year, and when they build something, they take out a bond, and they go in debt,” Bertman says, adding that he hasn’t given up on changing the 12 percent rule for the TAF and may ask the Legislature to reconsider in the future.
In the meantime, Bertman says the TAF is building an impressive track record with a number of successful construction projects. In addition to the $60 million replacement of Tiger Stadium, the TAF is also currently building a $15 million football operations center that was requested by former LSU football coach Nick Saban and a $3 million habitat for LSU mascot Mike the Tiger.
Other previously completed projects by the TAF include:
• The 11,600-seat addition to the east side of Tiger Stadium, completed in 2000 at a cost of $50 million.
• Resurfacing of Bernie Moore Track Stadium in 2001 at a cost of about $1 million.
• A $700,000 meeting/practice facility for the LSU golf teams at the University Club.
• $15.5 million academic center for student-athletes, with state-of-the-art educational equipment and a 1,000-seat lecture hall that’s available to the entire campus.
West Upper deck Makeover
LSU Associate Athletic Director Herb Vincent, who also doubles as the TAF’s executive director of external affairs, said the $60 million makeover of the west upper deck will only increase the overall seating capacity by about 600 seats but will generate a significant increase in revenue.
“The actual capacity of the stadium is going to change very little, if any. The purpose of the west-side renovation is to create new club seating, which is a major revenue source,” Vincent says.
He adds that a recent survey of SEC schools showed that LSU was “really low” in its number of oversize club seats, which are becoming a hot ticket in college sports.
In all, the west-side makeover will add 3,200 club seats that will cost up to $2,750 each per season. Sound a bit pricey? Guess again.
All 3,200 seats were sold a year before project began, Vincent says. The three tiers of covered seats will bring in about $7 million a year, which will pay for the west-side reconstruction and the $15 million football operations center that’s also under construction.
“The football operations center will house everything that has to do with the football program – a weight room, training rooms, locker rooms, offices, everything.” The new football center is being constructed next to LSU’s indoor football-practice facility.
According to Vincent, there’s an excellent marriage between the TAF and the LSU Athletic Department.
“We take a little pride in all this, the athletic department and the TAF, and we call both of them the athletic enterprise,” he says.
“We use no state tax dollars, we use no student fees,” Vincent continues. “All this money is self-generated by private donations, so we’re not going downtown to the Capitol asking for money to fund our facilities. It’s really, truly the LSU fan base that’s making this whole engine go.”
Bad Press
Whatever suspicion exists about the TAF might date back to 1991, when former state Inspector General Bill Lynch issued a report claiming that the foundation violated state law by spending public money for items such as a country club membership for former LSU head football coach Mike Archer and bonuses for LSU football coaches.
Lynch’s report questioned dozens of TAF expenditures, including an expense-paid trip to Busch Gardens amusement park for LSU coaches’ wives and children while the football team was in Tampa, Fla., for the 1989 Hall of Fame Bowl.
“He [Lynch] didn’t really find anything other than that the TAF was another private foundation,” Bertman says.
But no action was ever taken against the TAF, and Louisiana legislators responded by passing a new law that made it clear that TAF funds were considered private foundation funds.
The law exempted university foundations from the public records law and gave them additional power to handle university construction projects outside state regulations.
Like LSU’s two other foundations, the LSU Alumni Foundation and the LSU Foundation, the TAF opens its books regularly for audits. The only thing that is kept confidential is the names of donors and the amounts of their contributions, Bertman says.
Most of the TAF’s expenditures, such as the construction projects and coaches’ salary supplements, have to be approved on several levels.
A Louisiana law passed last year requires university employees to disclose payments of more than $1,000 from nonprofit groups.
A Lean, Mean TAF Machine
Bertman says there’s little excess in the TAF, which is dedicated to improving athletics at LSU – no excessive salaries or lavish perks are paid out by the foundation.
“The TAF basically takes the money that they collect from their surcharges on football tickets and gives the money to LSU. There’s no profit and very little overhead,” Bertman says. TAF has a staff of about 22, and the organization even pays rent to the LSU Athletic Department for its office in the Pete Maravich Center.
In addition to construction projects and salary supplements, Bertman said the TAF picks up the tab for important public appearances.
“They’ll take off this spring and go on a statewide tour with Coach [Les] Miles. They do that every year. They make about 10 or 12 stops where Coach Miles will speak, and I’ll be there. The TAF does a good job putting that on, because there are usually 600 to 800 people at each stop.”
In addition to covering tour expenses, the TAF also pays the coach to make the appearances through a salary supplement.
“The TAF actually pay part of the coach’s salary, $300,000, and he has to appear at a certain number of talks for the Tiger Athletic Foundation,” Bertman explains.
Bertman says there are strict limitations on how state dollars can be spent for expenses, so TAF plays a vital role in underwriting recruiting trips too.
When LSU was shopping for a new football coach in December after Saban resigned, the TAF picked up expenses for Bertman and other LSU officials to interview several coaching candidates before signing Miles.
Bertman said the TAF has plenty of oversight.
Bertman says that less than 1 percent of the 14,000-plus Tiger Athletic Foundation members have ever given more than $100,000.
He acknowledged that some of the suspicion about the Tiger Athletic Foundation may stem from problems that other schools have had with their booster groups, such as involvement with recruiting violations.
That hasn’t happened at LSU, Bertman said, noting that the TAF has an impressive track record over the past few years.
“We’re responsible for everything they do,” Bertman says, “right or wrong.” •