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There is a great quote from Michael Lewis: "If hedge funds could buy universities and then split them up so that the HF keeps the sports programs and they sell
by alexpotato 1y ago
There is a great quote from Michael Lewis:
"If hedge funds could buy universities and then split them up so that the HF keeps the sports programs and they sell off the academic departments, they would most definitely do that"
- prasadjoglekar 1y agoUniversities are already doing this. Those with modestly large endowments are functionally private equity firms whose job is to generate enough cash flow to pay themselves, top admins, sports coaches and profs. Academics, research, govt grants etc. are all means to that end. https://www.harvardmagazine.com/2025/05/harvard-salaries-top-administrator-investment-manager-compensation https://www.harvardmagazine.com/2025/05/harvard-salaries-top...
- vonneumannstan 1y agoIs there any evidence that universities with large endowments are paying coaches with them?
- Raidion 1y agoMoney is fungible, doesn't really matter what source the money comes from other than optics.
- deleted 1y ago[deleted]
- Kevin_S 1y agoThis isn't really fair I think. Academic money is actually not fungible - it can't be used to fund athletics, and vice versa. Just because both pots are relatively large doesn't mean that the money itself is fungible.
- WalterBright 1y agohttps://news.ycombinator.com/item?id=44328786 https://news.ycombinator.com/item?id=44328786 nailed it.
- vonneumannstan 1y agoMaybe but most endowments actually have "legally?" bound or otherwise contracted uses in universities. Thats why Harvard can't just tap it's endowment to fund research the current Admin has cut. So I'm doubting that endowments are being used in this way to pay coaches.
- 98codes 1y agoSure, but if an endowment is paying for, say, the football coaching staff, then that leaves that much more money free in the general fund to pay for other things. If the endowment is paying for something that otherwise wouldn't be paid for generally, that's a different story.
- par1970 1y agoHow is that the same thing?
- prasadjoglekar 1y agoHow are college endowments similar to hedge funds? For one, they put money into hedge funds as investors. And broadly, they're long on illiquid investments but have short term obligations for salaries, pensions etc. That's a hedge fund with a slightly different time horizon and intent. Some of those short term obligations are covered thru grants, fed money. But when that dries up (eg, Harvard and Trump), you're squeezed.
- PaulHoule 1y agoSports programs don't always or even usually make a profit. https://www.bestcolleges.com/news/analysis/2020/11/20/do-college-sports-make-money/ https://www.bestcolleges.com/news/analysis/2020/11/20/do-col...
- LanceH 1y agoThey don't return a net gain to the university, perhaps, but the people running them and advocating them are profiting nicely.
- slg 1y agoIn my opinion, this is like complaining that the US Postal Service isn't profitable. It isn't a business, framing it in terms of profitability is missing the whole reason it exists. No one expects a middle school soccer team or a university's drama department to be profitable, but we still invest in those things because we as a society think it is valuable for students. College sports has value beyond the money people pay to watch it.
- tuna74 1y agoYou don't pay the director of a university's drama department millions of dollars per year. Successful football and basketball coaches get paid those kind of sums.
- saghm 1y agoHonestly, even from a non-financial perspective, splitting them up just makes sense to me. It's baffling to me that we've come up with a system that essentially combines minor league sports teams with academic institutions of higher learning.
- ghaff 1y agoExcept it's sort of a poor correlation. Without making a study of it the best US collegiate football programs at least tend to be large state universities--which, don't get me wrong, are often good schools if you want them to be for you--but tend not to be the schools that come up in discussions of large endowments and the like. Basketball is more of a mixed bag in that it can rely on one or two star players and hockey, as I wrote elsewhere, is very regional and relatively small schools in the North have very good teams from time to time.
- t_mann 1y agoThe GP says it's baffling to combine sports teams with academic institutions, and you're saying it's not because those that do tend to have smaller endowments? Talk about a non sequitur
- ghaff 1y agoI do think that sports are part of the college/university experience which you are of course free to disagree with. There are, of course, smaller schools that have relatively minimal athletic programs. Without making a scientific study of it, I also don't think the biggest endowments really correlate to the biggest and most successful sports programs, especially in football.
- WalterBright 1y agoAt Caltech when I attended, the football team was known to proudly lose every game.
- saghm 1y ago
- mathattack 1y agoSome universities with large endowments used to be referred to as hedge funds that happened to have professors. Now they happen to have pro sports teams too.