When Coats Go Out Of Fashion
Posted: February 9, 2013
The Friendly City Files
Imagine you sell coats. Your coats are really nice. Lots of people want to wear them. Many people even think wearing one of your coats is the key to living a better, fuller and more prosperous life. In fact, although you’re constantly expanding, you always have more potential buyers than coats to sell.
Life in the coat business is good.
Still, competition is fierce, and you don’t rest on your laurels. You work hard to improve the quality of your coats. You also put a huge amount of effort into improving the overall “buyer experience,” since that experience is important to your customers — to many, the experience is more important than the coat itself.
So, you develop trendy new styles. You build new, ever-nicer facilities. You do what most businesses do to succeed.
But you also do some things most businesses don’t. You sponsor athletic teams in the hopes your business will get noticed on a larger stage, even though sports have little to do with the actual wearing of coats.
You tell people those sponsorships pay off, even though the return is hard to quantify, and when they don’t pay off, you assume your more notable failures only prove you need to build newer, ever-better facilities and stores.
And you keep spending to improve the overall buyer experience — even though you never actually break even on the sale of coats, much less on all those other activities, and to stay afloat, your business has to be subsidized by taxpayers.
Sound crazy? It does if you’re a coat business. But if you’re a public university … well, that’s pretty much how you operate.
Thirty years ago, my tuition at JMU was about $600 per semester. Today, a semester costs more than $11,000. Math has never been my friend, but even I know that’s almost 20 times more.
Seems odd, right? The cost of living hasn’t increased by a factor of 20. The average income isn’t 20 times higher. The investment 30 years ago — and make no mistake, college should be viewed largely as an investment and not as an experience — yielded a significantly better return than it does today.
Then why is college so much more expensive? Costs have certainly gone up, but not all costs are created equal. Does a school need a new library when most resources are now online?
Does a school need new buildings when the availability of online courses is exploding … and those courses are increasingly seen as a better value proposition?
Does the field hockey or baseball team need to travel to other states to play games when their programs don’t break even?
Wait — forget the so-called “minor” sports.
Only a few colleges and universities have athletic programs that are self-sufficient. The rest rely on student fees and university funding. At the vast majority of schools, even the football program, typically the highest revenue-generating sport, doesn’t break even.
Does upgrading athletic facilities make sense when the actual revenue generated will never offset the cost?
I’m in no way bashing higher education — shoot, three of our kids are in college — or JMU. Cindy and I are both alumni and she also has a graduate degree, but the current public university model will someday be unsustainable. So will the old rationales.
Sure, the social aspect may be great. Sure, lifelong friends may be made. Sure, the lives of young adults may be forever enriched.
But not necessarily by new buildings or nationally ranked teams.
If you sell coats and keep spending money on bigger stores and improving the overall buyer experience … and keep charging more and more, even though many people need to borrow heavily to buy the coats, and keep asking the government for more money to subsidize your business, some would say you’re crazy and your business model is completely out of whack.
Some would say you’re like the Postal Service ignoring the Internet, like the landline phone business ignoring cellphones, like mortgage lenders ignoring the fact many borrowers couldn’t afford to make their payments.
Some would tell you to start changing your business model before you have to charge more than people can or choose to afford — or before the government stops funding almost limitless student loans — and your business collapses.
And they’d be right.
Life in the coat business is good.
Still, competition is fierce, and you don’t rest on your laurels. You work hard to improve the quality of your coats. You also put a huge amount of effort into improving the overall “buyer experience,” since that experience is important to your customers — to many, the experience is more important than the coat itself.
So, you develop trendy new styles. You build new, ever-nicer facilities. You do what most businesses do to succeed.
But you also do some things most businesses don’t. You sponsor athletic teams in the hopes your business will get noticed on a larger stage, even though sports have little to do with the actual wearing of coats.
You tell people those sponsorships pay off, even though the return is hard to quantify, and when they don’t pay off, you assume your more notable failures only prove you need to build newer, ever-better facilities and stores.
And you keep spending to improve the overall buyer experience — even though you never actually break even on the sale of coats, much less on all those other activities, and to stay afloat, your business has to be subsidized by taxpayers.
Sound crazy? It does if you’re a coat business. But if you’re a public university … well, that’s pretty much how you operate.
Thirty years ago, my tuition at JMU was about $600 per semester. Today, a semester costs more than $11,000. Math has never been my friend, but even I know that’s almost 20 times more.
Seems odd, right? The cost of living hasn’t increased by a factor of 20. The average income isn’t 20 times higher. The investment 30 years ago — and make no mistake, college should be viewed largely as an investment and not as an experience — yielded a significantly better return than it does today.
Then why is college so much more expensive? Costs have certainly gone up, but not all costs are created equal. Does a school need a new library when most resources are now online?
Does a school need new buildings when the availability of online courses is exploding … and those courses are increasingly seen as a better value proposition?
Does the field hockey or baseball team need to travel to other states to play games when their programs don’t break even?
Wait — forget the so-called “minor” sports.
Only a few colleges and universities have athletic programs that are self-sufficient. The rest rely on student fees and university funding. At the vast majority of schools, even the football program, typically the highest revenue-generating sport, doesn’t break even.
Does upgrading athletic facilities make sense when the actual revenue generated will never offset the cost?
I’m in no way bashing higher education — shoot, three of our kids are in college — or JMU. Cindy and I are both alumni and she also has a graduate degree, but the current public university model will someday be unsustainable. So will the old rationales.
Sure, the social aspect may be great. Sure, lifelong friends may be made. Sure, the lives of young adults may be forever enriched.
But not necessarily by new buildings or nationally ranked teams.
If you sell coats and keep spending money on bigger stores and improving the overall buyer experience … and keep charging more and more, even though many people need to borrow heavily to buy the coats, and keep asking the government for more money to subsidize your business, some would say you’re crazy and your business model is completely out of whack.
Some would say you’re like the Postal Service ignoring the Internet, like the landline phone business ignoring cellphones, like mortgage lenders ignoring the fact many borrowers couldn’t afford to make their payments.
Some would tell you to start changing your business model before you have to charge more than people can or choose to afford — or before the government stops funding almost limitless student loans — and your business collapses.
And they’d be right.
Jeff Haden lives in Harrisonburg. He can be reached at www.blackbirdinc.com.