Northwestern home games

[dpodoll68]

According to this writer only a small portion of the endowment holdings are unrestricted and yearly payouts as a whole are limited to 5-6%, with unrestricted holdings typically used for scholarships, faculty support. It appears a large majority of their holdings are locked up in illiquid investments (ie private equity) with their smoke and mirrors projected returns. Could be…problematic for actual future income. I doubt the students and faculty at Northwestern will appreciate a potential chunk of endowment income going towards a legal fiasco and multiple outside investigations (pending legal wrangling).

What is an endowment, anyway? And how can it be spent?

At its founding in 1851, Northwestern’s Charter created a corporation and a Board of Trustees authorized to “acquire, hold and convey property” so that Trustees, guided by prudence and a desire to bolster the University’s educational capacity, can “place out at interest, or otherwise depose of...

dailynorthwestern.com

Yes, I'm well aware of how endowments work, as I have been working in philanthropy for almost 20 years, and specifically in higher ed philanthropy for 13 years. The typical payout is actually more like 4-4.5% for most endowments, more conservative because it allows them to fund ongoing projects while ensuring that they can still grow their endowment in the average year.

Nobody responsible for the endowment likes to pay anything out of it, even for actual core obligations, let alone lawsuits. That being said, a 4% annual return on a $16B endowment is $640M. As I said above, they would recoup a $100M loss in the span of 2-3 months. If they paid Pat Fitzgerald a $100M settlement today, they would be whole again by the 4th of July.

 

[dpodoll68]

I think your understanding of how endowments work and ... this elementary math is just not relevant to real life.

It's not a rounding error to anyone ...

The relevant math is elementary - it's calculating interest, it's not rocket science. Do you think endowment managers use calculus?

Yes, for people managing multi-billion dollar endowments, $100M is a rounding error. You saying that I don't understand endowments, while advancing no argument other than to say I'm wrong, is not convincing. If you want to get in the game, actually make a case, or continue sitting on the sidelines.

 

[howeda7]

I don't to think the Cubs were willing to work with Northwestern from Labor Day weekend though potentially the first week of November.

Have to keep the World Series clear.

 

[Spaulding!No!]

Katie! Bar the door!

 

[A_Slab_of_Bacon]

The relevant math is elementary - it's calculating interest, it's not rocket science. Do you think endowment managers use calculus?

Yes, for people managing multi-billion dollar endowments, $100M is a rounding error. You saying that I don't understand endowments, while advancing no argument other than to say I'm wrong, is not convincing. If you want to get in the game, actually make a case, or continue sitting on the sidelines.

Nobody making decisions is doing that math the way you did it. Nobody cares about average joe's income being whatever and the factions of that. That's not how endowments work.

That's not how anything works, not everything is magically relative to some guy's car payment.

 

[Gophers7NatTitlesBadgers0]

The relevant math is elementary - it's calculating interest, it's not rocket science. Do you think endowment managers use calculus?

Yes, for people managing multi-billion dollar endowments, $100M is a rounding error. You saying that I don't understand endowments, while advancing no argument other than to say I'm wrong, is not convincing. If you want to get in the game, actually make a case, or continue sitting on the sidelines.

Nobody making decisions is doing that math the way you did it. Nobody cares about average joe's income being whatever and the factions of that. That's not how endowments work.

That's not how anything works, not everything is magically relative to some guy's car payment.

 

[Ski-U-Ham]

 

[Pompous Elitist]

Yes, I'm well aware of how endowments work, as I have been working in philanthropy for almost 20 years, and specifically in higher ed philanthropy for 13 years. The typical payout is actually more like 4-4.5% for most endowments, more conservative because it allows them to fund ongoing projects while ensuring that they can still grow their endowment in the average year.

Nobody responsible for the endowment likes to pay anything out of it, even for actual core obligations, let alone lawsuits. That being said, a 4% annual return on a $16B endowment is $640M. As I said above, they would recoup a $100M loss in the span of 2-3 months. If they paid Pat Fitzgerald a $100M settlement today, they would be whole again by the 4th of July.

I understand your point, and most people don’t care about or think about dollar issues until it hits them in the pocketbook. To activists who watch the machinations though, they may care about a significant chunk of yearly income going towards *nothing* rather than funding faculty or student-related costs. Furthermore, the crazy investment return growth over the past 5-10+ years since the GFC cannot be assumed to continue. Knowing nothing how Northwestern is invested except they are very possibly trusting individuals reaching for yield via illiquid leverage, that can turn rather quickly when unpredictable disruptions occur as we have right now.

 

[Some guy]

I understand your point, and most people don’t care about or think about dollar issues until it hits them in the pocketbook. To activists who watch the machinations though, they may care about a significant chunk of yearly income going towards *nothing* rather than funding faculty or student-related costs. Furthermore, the crazy investment return growth over the past 5-10+ years since the GFC cannot be assumed to continue. Knowing nothing how Northwestern is invested except they are very possibly trusting individuals reaching for yield via illiquid leverage, that can turn rather quickly when unpredictable disruptions occur as we have right now.

Let’s say they have to pay Fitzgerald 100 million.

If they budget the big ten media rights deal to pay for it over 3 years, it’s like Northwestetn has a big 12 deal for 3 years to pay for it.

I personally have a hard time seeing Fitzgerald getting much more than 68 million.

They could’ve bought him out for 68 million with no questions asked. They never alleged he did anything wrong, they never alleged he ignored anything wrong.

 

[swede2]

Let’s say they have to pay Fitzgerald 100 million.

If they budget the big ten media rights deal to pay for it over 3 years, it’s like Northwestetn has a big 12 deal for 3 years to pay for it.

I personally have a hard time seeing Fitzgerald getting much more than 68 million.

They could’ve bought him out for 68 million with no questions asked. They never alleged he did anything wrong, they never alleged he ignored anything wrong.

Northwestern likely has insurance defending the claim that will likely pay at least part of any payout.

 

[GopherJack]

Speaking of new stadiums - were any of you Gopher Holers a part of the ground breaking ceremony of TCF Bank Stadium back in 2006, and did you participate in the football carry from the Metrodome to campus and the site of our new stadium? My location was right by Bullwinkles on the West Bank. Great for me as I waited inside the bar, chugged a beer, and when my time was close I came outside and carried the football about 10 yards and followed the procession to the ceremony.

Ground Broken for TCF Bank Stadium - University of Minnesota Athletics

The ceremonial groundbreaking for the new on-campus football stadium, set to open in the fall of 2009, was held this afternoon at the stadium site on the cor...

gophersports.com

 

[Some guy]

Northwestern likely has insurance defending the claim that will likely pay at least part of any payout.

Yes. They have insurance, they have the money even if they didnt


If northwestern pretends they have a big 12 media deal for 3 years instead of a big ten media deal…they’ll have an extra 100 million

 

[Pompous Elitist]

Northwestern likely has insurance defending the claim that will likely pay at least part of any payout.

Yep, but insurers/reinsurers are good at taking in premiums, less good at paying out if there is some sort of contractual weasel room. Ultimately, maybe the attorneys fare best.