University of Oregon officials are adjusting budgets after the new Matthew Knight Arena has failed to meet revenue expectations across the board.
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While it’s normal to readjust budgets after a facility opens, the fact that revenues failed to reach expectations across the board is a vindication for arena foes, who claimed projections were rosy, according to a report originally published in the Eugene Register-Guard. There’s not a category where revenue projections were met: men’s basketball revenues were off by 15 percent, women’s basketball revenues were off by 25 percent, and concert revenues were off by 30 percent. From the Register-Guard:
“We all knew they were optimistic,” said economics professor Bill Harbaugh, a member of the school’s Intercollegiate Athletics Committee. “They just wouldn’t admit it. From what I’ve seen of the athletic department, their budgeting is just smoke and mirrors, so I don’t put much faith in it.”
That may be a tad harsh: we’re talking about a part of the budget where the revenue shortfall represents a whopping 1 percent of the total athletic-department budget. Anyone who has worked with large budgets knows making adjustments to cover a 1 percent shortfall isn’t that difficult. And in this case, it’s even less difficult than in normal circumstances: the school has a $130-million Legacy Fund to cover shortfalls in arena revenues.
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