Simple "logic". We are #2 overall right now with a losing
by btd (2014-12-29 16:03:41)
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  In reply to: I can be financially beneficial  posted by HTownND

team. Thus, it isn't a stretch to deduce it is hard to increase the top line much indepenednt of wins and losses. However, you can lower the bottom line by adding more expense:

1) $5 million more per year for coaches
2) $5 million more per year for the overall budget (nutrition staff, whatever)
3) $5 million more per year for physical plant improvements in an infinite loop

That's $15 million off the bottom line. That means you probably have to add $45 million more to the top line to be breakeven. Adding $45 million more to a team already sitting at #2 overall is not trivial.

Thus, the ROI as mentioned at the start of this thread likely is 0. The NPV EVA at (5%) would probably be zero or negative. In pure dollars and sense it may not be a slam dunk ROI to pay for the elite program.

However, as I said, that should not be the sole criteria used in the business case. I would argue -- I do run a management consulting business -- that an EVA of $0 is justification to make the move because the true mission is to be the best we possibly can be and right now we cannot be the best we can possibly be. ND has it within their financial means to spend more without damaging the University. Thus, they should do what it takes to try and be the best they can be.


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