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Ex-governor’s changing Pryor-ities birth a problem he helped to create

ROGERS – David Pryor, University of Arkansas trustee, found himself at odds this summer with David Pryor, the U.S. senator.

In 2016, in his position on the UA Board of Trustees, Mr. Pryor opposed a proposal to raise and spend upwards of $186 million to add 3,000 luxury suites in an expansion of Donald W. Reynolds Razorback Stadium.

But in the 1980s, the then Senator Pryor fought for an IRS rule that would allow people who pay thousands of dollars for luxury suites and premium seats to deduct that expense as a charitable contribution from their tax bill.

These contradictory positions have tossed Mr. Pryor into the sticky morass of unintended governmental consequences.

Without the write-offs, rich-corporation and wealthy-patron demand for high-dollar seating wouldn’t exist.

And without that demand, the UA likely would neither have needed nor approved the multimillion expansion, which has put Mr. Pryor’s alter-egos at odds.

In other words, Mr. Pryor helped lay the foundation for the same football-first financial priorities at universities that he now declares are a major problem.

Any day now, the project, the most expensive stadium construction project in state history, will start in earnest on the west side of the flagship school’s Fayetteville campus.

Projected renovations for Don Reynolds Stadium photo from http://arkansasrazorbacks.com/dwrrs/#prettyPhoto

Projected renovations for Don Reynolds Stadium (Photo from http://arkansasrazorbacks.com/dwrrs/#prettyPhoto)

Construction will include expansion of the north and south ends, which will increase the number of seats from 72,000 to 76,000. It begins with the razing and rebuilding of the Broyles Athletic Center on the north side. The renovation is expected to be complete by the 2018 football season

Most of the new seating will be premium — these are not places for a fan who wants to simply amble in off the street on game day.

Some cheer this investment as a common-sense step to keep up with the frenzied pace of development at other Southeastern Conference schools. Each of the top SEC programs has renovated or will soon invest in renovations of large areas in their home stadium. Alabama, Tennessee, LSU and Texas A&M, programs that consistently rank higher than the Hogs in national polls, each have a gleaming stadium holding more than 100,000 fans. It’s an arms race, as Mr. Pryor referred to it. Razorbacks assistant coach Barry Lunney Jr. told Hawgs Illustrated’s Dudley Dawson in late October: “Obviously, when we get that next step completed, and I think our stadium is right there with anybody, then it could really take it up another notch.”

Not all insiders, however, are happy. Mr. Pryor, who is recovering from a stroke he suffered on October 10, earlier this year publicly expressed concern the projected benefits of the project don’t warrant the costs. Mr. Pryor has pointed out that cost estimates have roughly doubled from the amount he supported in 2013 when voting for the concept of a north-end expansion only.

In a June letter to fellow trustees Mr. Pryor wrote: “In 2013, we voted on the concept of enlarging and improving the North End.  At that time, the estimated cost was … $78 to $95 million.  I have yet to see how this enormous cost escalation has occurred in such a short time.  There has been no explanation.” Whatever explanations were offered afterward were not to Pryor’s satisfaction. He’s still against the expansion because of the cost.

Mr. Pryor also lamented that none of the investment, the original 2013 estimate or the tens of millions tacked on since, would benefit the university’s students. “The some 26,000 students on the Fayetteville campus will not benefit one iota,” he wrote in the letter to nine trustees. “There are no extra student seats added. In fact, there are no general admission seats added —  but only some 3,000 ‘special seats’ for those fans in the upper income levels. …

“Will two new elevators, a new Broyles Center, a multimillion video board in the south end, adding some 3,000 new luxury seats, truly add any benefit except for a privileged few?

“Should we ever decide to issue bonds for classrooms, labs, scholarships, tuition or faculty salaries, count me as a supporter.”

State land-grant universities like the UA usually have mission statements that  involve prioritizing the allocation of academic resources for the benefit of students. The University of Arkansas System, for instance, states it is “dedicated to the improvement of the mind and spirit through the development and dissemination of knowledge” and develops “intellectual growth and cultural awareness in its students.”

Many who criticize the cultural primacy of Razorback sports believe the university’s core mission and the Hogs’ core objectives are mutually exclusive.

Mr. Pryor, unique among Arkansans, has operated on both sides. In these past few months, of course, he warned against perceived excesses of a football program he thinks puts big-money boosters ahead of students. “College football has become a nuclear arms race,” he wrote to fellow trustees. “It is BIG BUSINESS.  Fancy stadiums, outlandish salaries, luxury amenities.  We all know that. On this vote, we now have a rare chance to become the school that takes the bold step of stating what our priorities are really all about.”

Ultimately, Mr. Pryor’s dissent was for naught. In early September, the trustees voted to approve a bond issue of as much as $120 million pay for the expansion and upgrades to Razorback Stadium. Mr. Pryor was one of only two trustees to vote against the measure.

But there’s the irony.

Through his public stand, Mr. Pryor has staked his claim in history as an opponent to “nuclear arms race” approach to Razorback sports. But that race itself was born of that federal legislation of the 1980s in which Mr. Pryor’s hand was heavy in the crafting.

Without those tax-deductible luxury seats, the college sports industrial complex as we know it wouldn’t exist. The big-money boosters who rent luxury suites and premium seating often pay tens of thousands to “buy” the right to purchase tickets to use in these seats. Thanks to the legislation that Mr. Pryor helped push at the behest of former Arkansas Athletic Director Frank Broyles and other coaches, the IRS defines these purchases as “donations,” and therefore as tax write-offs.

Razorback boosters are already purchasing the stadium’s new luxury seating before the construction cranes are even on site.

If these write-offs didn’t exist, demand for luxury seating at college football stadia would likely plummet. Indeed, one athletic director told Kristi Dosh, founder of businessofcollegesports.com, he thought donations would drop by as much as half without the 80 percent deduction.  These write-offs are vital to the bottom lines of college sports programs. Without them, UA athletic director Jeff Long and other Razorback leaders would have had a more difficult time launching the facility construction and renovation projects they have undertaken in the last seven years.

For college programs across the Unite States, it’s estimated by Gil Gaul, author of Billion-Dollar Ball: A Journey Through the Big-Money Culture of College Football, that these ticket sales schemes raise around $500 million annually for colleges across the U.S..

This is a spike from the mid-1980s, when Mr. Pryor was head of the Senate Finance Committee. Then, as Gaul points out, a congressional panel estimated these schemes raised $100 million annually.

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This is Part 1 of a multipart series. Part 2 will include insight from Mr. Pryor himself, along with an eye-opening look at the tax lobbying done by Razorback coaches as seen through Mr. Pryor’s senatorial papers.
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