Morgan Stanley Wants to Build 'Debt Free' Stadiums for Colleges.

UNIVERSITY & college finance; CAPITAL investments; SPORTS facilities; RATE of return; WEISBACH, Lou; GIFT taxes; STADIUM Capital Associates (Company); MORGAN Stanley & Co. Inc.; MOODY'S Investors Service Inc.

The article analyzes a plan that was developed by Stadium Capital Associates to allow universities to build sports facilities without having to borrowing money. Stadium Capital is largely owned by the investment bank Morgan Stanley. The plan is to have sports fans donate money for the upfront costs and then promise to buy annual tickets or other tax deductible gifts to guarantee that the facility will earn future income. Stadium Capital's Lou Weisbach said that the plan could also be used for endowments or to decrease existing debt. Roger Goodman of Moody's Investors Service feels that the plan does not offer a high enough rate of return and that will turn investors off.