Wednesday, February 27, 2008

George Beres: An Independent View - Arena Bond Sale

State should rule against arena bonds to show higher ed is not for sale

By George Beres

For the Beacon

Springfield is third only to Eugene and Portland in the number of University of Oregon graduates living within its borders. Those alumni- all of them- have scant awareness of the misuse of big money at the school in an era when their attention is diverted by mushrooming national debt.

There are some exceptions. One resident confided in me- after I promised to not publish his name- that he had given $500 a year to UO varsity athletics the last seven years, but is going to halt what he calls his “misguided giveaway.” So what’s up?

It is tied to proposed massive spending by varsity athletics for facilities that have little to do with needs, nor with the primary function of a university. At the root of the “giveaway” is a man who has a track record for being the UO’s biggest private donors. Is it ungrateful to criticize a generous donor? Of course, unless- unless there are strings attached to the donor’s gifts. When that happens once, it might be seen as an accident. When it happens again, it’s more than a coincidence. It becomes a pattern of privately controlling University policy.

The situation removes credibility for a proposed state bond issue for a new arena. It was revealed when we learned how donor, Phil Knight, attached secret requirements for use of his $100 million gift to the UO. The early February revelation, conveniently delayed by school administration, bears out my description of Knight as an “Indian giver,” a label we used to give one who takes back- or threatens to take back- a gift if his demands are not met.

When the University admitted Knight’s threat to take back his gift if the state chooses not to issue bonds, the timing was perfect. It came shortly before the legislature was to rule on the bond issue for the project Knight very much wants— a $200 million replacement for historic McArthur Court. There are good reasons for the state to rule against the extravagant bond issue. Those reasons might be ignored if denial resulted in loss of Knight’s donation. That’s what it comes down to if Knight’s improper influence goes on to infect decision-making among state lawmakers, as it has with the UO administration.

It would be no surprise to those who remember how successful he was with an earlier effort to influence University policy. A few years ago, Knight, the boss at Nike, got irate when UO students got the University to become a member of the Worker Rights Consortium (WRC). Its functions include monitoring behavior of corporations dealing with low-paid employees overseas. Knight complained the University should have consulted him before subjecting his Nike to such review. As a wedge, he used the threat to renege on his pledge of multi-millions for expansion of Autzen Stadium. At stake was not only stadium expansion, but the possibility of losing future gifts from the school’s wealthiest alumnus.

The University appealed to the State System of Higher Education. The System responded by making it illegal for its schools to belong to the WRC. It was retroactive. With mock regret, the UO administration announced it was being forced to withdraw from the WRC. Within weeks, Knight came waddling back to make good on his donation. Key to financial viability of a new Mac Court would be its ability to make an annual profit to pay back cost of the bonds. That’s not likely when revenues depend on the success of home teams, whose pre-season optimism this year has been throttled by poor records. A new advertising contract that includes arena naming privilege is misleading. Much of that money would have been forthcoming anyway under standard periodic sale of broadcast rights.

A proposed major boost in ticket prices would make the new facility a venue for only the wealthy. Sky boxes, as at Autzen Stadium and the proposed new baseball stadium boondoggle, accommodate the richest of the rich. Cost of buying a ticket simply to get into the arena will shut out fans on limited budgets. Many faculty members are unhappy about what some term “blackmail” in the deal made by Knight. Beyond that, they are indignant over skewed priorities given varsity athletics when academia continues to suffer shortfalls.

One does not look a gift horse in the mouth to see if it has rotting teeth. But after the University twice has been intimidated by Knight’s threats to forget his promises of money, it should raise an important question the next time he offers a major gift. Should we first inspect the condition of his teeth?

As fans in Springfield and throughout the state have learned, when Knight offers his money, he expects something in return- something no one should be entitled to demand. The legislature would be wise and honest to deny the bonds, and remind us that Higher Education is not for sale.

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