Florida State has been under the microscope a lot over the past two years, and it was no different earlier this month when some media wrote about the increase in debt with FSU athletics. It was clear that it was a hit piece for clout, as there was no context regarding the increase in debt.
We addressed it here, but it was good to see FSU Board of Trustees Chair Peter Collins take the time to address the issue at a recent board meeting:
"Yes, we have a lot more debt than we had a year ago, but we also have a brand-new west side of the stadium with a lot other improvements to the stadium, and we have a brand new football-only facility. And the revenue that we're raising, or getting, from the new football stadium is paying for those bonds. So if you went out and bonded $400 million and didn't have a revenue source to repay it, you wouldn't even be able to issue those bonds because people would look at you and say 'well you can't even pay it back.' We have a revenue source and it's paying those bonds. Yes, we have more debts, but we also have more assets."
"That's what people don't understand," Collins said. "Yeah, I mean, we can be the lowest-debt university in the country if we never built anything, right? But that's not the goal. The goal is to improve the program, improve the facilities, and this board would've never approved it if we didn't have the revenue to pay it."
Folks who don't understand FSU debt and assets shouldn't be writing about it
"So when you see our debt services, 12 percent of our budget, that's really good. I just want everybody to understand that there was a lot of thought around this room when we were going around these things and testing hypotheses. For them to think we just sort of ran off and put a lot of debt on the books and didn't get anything for it, it's just ridiculous."
We were the only outlet to point out that FSU has an excellent credit rating, which means there's little to no chance the debt will go into default. The amount of debt also highlights that FSU hadn't done much updating to its facilities in a long time. Instead of doing it piece by piece, they decided to do it all at once because they could afford to do so.
These media members on social media talking about the debt like it's a bad thing are clueless on the matter. As I said before, it's no different than having a home and going into debt to acquire another home you may wish to rent out as a means of residual income.
Is it a large number? Absolutely, but FSU is in great shape from a debt-to-assets ratio. One could argue they didn't need to spend as much money on certain things. However, all FSU Â needs to do is start winning football games, and these type of clout chasing instances will go away.