Answered! With the steady growth in attendance at Saturday home football games, Southwestern University’s president, Dr….

With the steady growth in attendance at Saturday home football games, Southwestern University’s president, Dr. Joel Wisner, had reached a decision. The existing stadium, with seating capacity of 54,000, simply would not suffice. Forecasts showed increasing interest in the program [see Southwestern University: (B) in Chapter 4], and complaints by loyal fans and big-money athletic club boosters revealed the need for premium-class seating and luxury amenities not found in a 1950s-era stadium [see Southwestern University: (C) in Chapter 6].

But the choice of what to do was anything but clear to President Wisner. His vice president of development, Leslie Gardner, had presented three options: (1) expand the existing stadium to 75,000 seats, adding numerous luxury skyboxes and upgrading most of the yardline seats to include comfortable backings; (2) build a brand-new stadium three miles from campus on land, worth about $3 million, donated by a team booster; and (3) signing a 10-year contract with the Dallas Cowboys football team to rent their stadium, 28 miles away, for a fee of $200,000 per game.

Don't use plagiarized sources. Get Your Custom Essay on
Answered! With the steady growth in attendance at Saturday home football games, Southwestern University’s president, Dr….
GET AN ESSAY WRITTEN FOR YOU FROM AS LOW AS $13/PAGE
Order Essay

Each of these options had clear benefits–yet each had at least one very strong negative as well. Expanding the current facility carried a $12 million price tag, with an annual fixed cost of about $1 million and with a variable cost of about $1 per attendee. If the job were not completed in the nine-month off-period between seasons, the team would be left without a home field on which to play in 2004. This meant reneging on contract dates with powerhouse teams that were signed some 3 to 4 years earlier. Contract violations are not a matter taken lightly in the NCAA or the Big Eleven Football Conference.

Building a brand-new stadium off-campus would yield a plush, state-of-the-art facility, but it had to be named after the donor of the land. It also meant a huge fundraising drive on the order of $40 million by President Wisner, plus likely bond insurance placing a 20-year debt burden on the college’s balance sheet. He tentatively concluded that fixed cost would be in the neighborhood of $5 million per year and variable cost about $2 per attendee.

The third option had definite advantages from the perspective of many, if not most, of the fans who attended the games. A large number already lived in the Dallas—Fort Worth area and would be spared the long commute and horrible traffic jams that always seemed to occur in Stephenville on game days. Clearly, however, students would be unhappy and buses would have to be provided by SWU, for free, to bring students from Stephenville to Dallas. While the actual noted price of $200,000 per game seemed high on the surface, the $1 million per season (there are five home games a year) was a drop in the bucket compared to the other options. However, the Dean of Students said the school should expect the bus transportation to be about $10 for each of the 15,000 student tickets sold for each game.

Prior to asking the VP of finance to do the detailed analysis, President Wisner asked Gardner to survey three groups that held personal stakes in the project: students, booster club members, and college faculty/staff. Selecting 50 people at random in each of these groups, Gardner asked them to “grade” each possible location on five factors. Using letter grades, the results are shown in the table below.

Factors Existing Sites New Site 3 Miles from Campus Dallas Cowboys Facility
Students’ Ratings of Locations
Convenience A B F
Guaranteed Availability for Next Season C D A
Comfort B A A
Cost A D B
National Image D B B
Boosters’ Ratings of Locations
Convenience D D A
Guaranteed Availability for Next Season B C A
Comfort C B A
Cost A C A
National Image C C B
College Faculty/Staff Ratings of Locations
Convenience B C D
Guaranteed Availability for Next Season A C A
Comfort C A B
Cost A D B
National Image B B C

Gardner decided to give equal weight to the grading of each of these groups. But the administration did not equally weigh the five factors. “Cost” and “guaranteed availability” were rated twice as important as “convenience,” which in turn was ranked twice as important as “comfort” and “national image.”

DISCUSSION QUESTIONS

Are the factors Gardner selected for evaluation reasonable and complete? What others might be included?

Prepare a crossover chart based on the information provided.

Based first on your analysis of the survey data, and then on your analysis of the crossover charts, provide a justification for each location. Provide a complete list of reasons for not selecting each of the three sites.

Which location do you recommend, and why?

Discuss the process followed by Gardner.

Expert Answer

 Though Gardner has taken the five decisive factors as Cost, Comfort, Convenience, Guaranteed Availability for Next Season, and National Image as the five factors in the survey, we propose some alterations. First, whether they have the resource to manage a project like expansion or building a new stadium is a big question and must be considered in this case. So, a possible additional point could be ‘Competency’. Second, due to these decisions, different stakeholders will be affected. For example, the environment may be deeply polluted due to expansion work. This should be also considered under the ‘Influence on stakeholders’. Finally, if they decide to go for expansion, whether the existing facility will let them implement new technology or infrastructure will be a concern. The same challenge exists in the case of renting option. Also, few points taken are redundant. For example, when they already have known the cost before hand, why is it required to check through survey again?

Crossover Chart

Answered! With the steady growth in attendance at Saturday home football games, Southwestern University’s president, Dr.... 1From the crossover chart, it is clear that, at any volume greater than 54,000, the expansion option is the cheapest.

Reasons for Not Selecting
Expansion New Stadium Rent
1. Erodes national image of the institution 1. Incurs very high cost 1. High Distance from the institution
2. High Risk of the project getting incomplete and unavailability in the next season 2. High Risk of the project getting incomplete and unavailability in the next season 2. Erodes national image
3. Uncomfortable to teachers, staffs, and boosters 3. Inconvenient to teachers, staffs, and boosters 3. Asset is not owned by the institute and after 10 years, the same problem will arise
4. Inconvenient for the boosters 4. Needs a lot of efforts for fundraising 4. Inconvenient to students, teachers, and staffs
5. Feasibility to upgrade to latest infrastructure could be a challenge 5. Involves additional risks for the bond-related debt
6. Environmental impact will be too much 6. Requires monitoring and control for the entire project and hence competent managers
7. Requires monitoring and control for the entire project and hence competent managers

Let us take the grades given by the participants be translated into numbers as A=4, B=3, C=2, D=1, F=0. We also consider the opinions of students, staffs, and boosters of equal weight. The factor rating table is shown below:

Average Score
Existing Sites New Site Rent Weights Normalized weights
Convenience 2.333 2.000 1.667 2.000 0.167
Guaranteed Availability for Next Season 3.000 1.667 4.000 4.000 0.333
Comfort 2.333 3.667 3.667 1.000 0.083
Cost 4.000 1.333 3.333 4.000 0.333
National Image 2.000 2.667 2.667 1.000 0.083
Final Score 3.083 1.861 3.250
Rank 2 3 1

Final Recommendation

Considering 1. The crossover chart, 2. The list of negative issues associated with each alternative and 3. the final rank derived from the survey result, we conclude that renting is probably the best solution because its cost is moderate, the number of issues is also not much and the factor rating also provides a rank 2.

Still stressed from student homework?
Get quality assistance from academic writers!