April 20, 2012
BERKELEY - Earlier this week, the Wall Street Journal ran an erroneous story on financing plan for California Memorial Stadium. University Vice Chancellor John Wilton has submitted a letter to the editor expressing his displeasure with the piece and the misrepresentation of the project. The Journal has said it plans to run a "tightened" version of letter. It has also posted a correction on its website.
To address a growing interest in understanding the financial model, the Athletic Department has prepared an FAQ it will continuously update to ensure transparency and provide the information that matters to followers of Cal Athletics.
Memorial Stadium remains on schedule to be game-ready for the Sept. 1 season-opener against Nevada. For information on season tickets and participation in the Endowment Seating Program, visit CaliforniaMemorialStadium.com.
Letter to the Editor (original text)
The story (Cal's Football-Stadium Gamble, April 18) on the renovation of UC Berkeley's Memorial Stadium so badly misrepresents the project that a response is required.
Most surprising is the claim that "years into the fund-raising effort, a projected $270 million from the sale of the seats has failed to materialize." This project was always intended to be debt-financed and paid for with revenue generated by Intercollegiate Athletics (including sale of the football seats) over the life of the project. The idea that we should have raised the full cost of the project upfront is absurd. Such an approach would preclude most capital projects from being undertaken in the public or private sector.
We are fortunate that we have issued debt at lower rates and for longer maturities than initially planned (30 to 100 years). Current commitments for seat sales exceed $144 million for a stadium under construction, the target date for seat sales was always June 2013 and we are confident in our ability to meet our goals, including philanthropy.
It is also disturbing that the story cites one member of our faculty and leaves unreported the fact that the financial modeling used to examine different scenarios was reviewed by a special committee of our Academic Senate. That committee, which included faculty trained in finance, determined the results to be credible and robust.
Also left unaddressed was the fact that seismic and safety issues made a "do nothing" option impossible. Our Regents instructed Berkeley to address the issue. We are doing what needs to be done in a responsible and, to date, successful manner that has the support of our alumni and faculty experts.
Finally, no central campus funds have been used to finance this project, and we intend to manage it so that none ever will.
Vice Chancellor of Administration and Finance, UC Berkeley
Correction to article posted on Wall Street Journal website
The University of California-Berkeley always intended to borrow most of the $474 million needed to renovate its football stadium and build an athlete-training facility. An earlier version of this article incorrectly implied that Cal was taking on more debt than originally planned. Also, in noting that Cal had raised $31 million of a proposed $270 million endowment for the stadium, the article failed to mention that the school had gained nonbinding commitments of an additional $113 million, the majority of which will be paid over 30 years. In addition, in 1975, California and UCLA shared the Pac-8 football title. An earlier version of this article incorrectly said California won the title outright.