This Week In College Viability (TWICV) Dr. Jim Brasfield on Webster University (MO)

Welcome to another episode of This Week in College Viability. My name is Gary Stocker. This is a special episode today. Our guest is Dr. James Brassfield, recently retired faculty and retired community leader in the St. Louis region. Jim has been involved with Webster University in any number of roles over the past few decades, and as a matter of fact, Dr. Brassfield was my instructor one of my instructors when I earned my master's degree many years ago from Webster University, and his perspective on all things Webster and all of the recent and even their historical challenges, from rent payment to leadership compensation to the activities of the Board of Trustees, all provide value and perspective that we can't get from the outside. So I invited Jim to join us today. Jim, good day, and thanks for making time to join us. Let's jump right into the questions. So Jim, this whole trauma for Webster University started a couple months ago, and it was because they did not see risk. Do you know why? Why did Webster not see risk in refusing to pay that measly $75,000 rent payment?

This is a big mystery to me. Uh, when I first saw it, I, it was clear that it was a dispute between the landlord and the tenant over, over terms of the lease and perhaps trying to get out of the lease. Why they didn't respond immediately, apparently maybe the top administrators were out of town, but it seemed like they should have recognized that this was, you know, this was an issue that needed to be responded to right away, and they failed to do that and left the impression that it was like some of the local grocery stores, or I saw in the paper today a local restaurant didn't pay its rent and going out of business, but like you say, it was a small amount relative to the budget. And so it, it wasn't that they couldn't pay it, but it was a dispute that ended up going public and looking bad for Webster.

Yeah, I bet they regret that from day one, not paying that $75,000 rent and then taking up the issue with the landlord.

Yeah.

And, and this is an opinion question, and some of these, um, during our podcast today will be like this, but before you retired, um, what was your view of of Webster and their Board of Trustees?

Well, as, as a Faculty Senate president for 6 years, I, I sat, uh, went to board meetings, and, and, uh, like most boards, uh, you know, some people were actively engaged and, and interested and contributed, and others, you know, kind of showed up half the time and, and didn't seem to be very deeply engaged. Uh, it did seem to me that that there was always, you know, at least 3 or 4 people who were CEOs of major corporations and, and brought that kind of expertise to the board. Uh, but I'd, I'd be remiss if I didn't say that, that over the long haul, the board member that, that I thought was, was most actively engaged and I think ended up giving the most money in the history of the university was the late Bert Walker. And Bert loved Webster and, and, uh, was a, was a great cause of his. And, and in his role on the board was, was to be active and engaged and, and, uh, and involved. And, and certainly his, uh, his passing a few years ago is a, is a, is a loss to his family and the community.

And when, when you think about, just kind of a follow-up, Jim, um, when you think about boards of trustees of private colleges in general. Do you have any perspective on what those boards are like across the country or even across just the Midwest?

Uh, no, I really don't. I mean, other than— I mean, I have some familiarity with Webster's board, but, but I suspect that that's— that particularly for small to middle-sized institutions, as opposed to the Washington U's or the Harvards, uh, you know, that it's kind of like Webster, kind of a mix of mix of people, some CEOs, some other people. I think usually people don't get on the board unless there's some expectation that they're going to be able to write some level of check to the board. I think that's an expectation. And I mean, I've been on some boards. I was on a community board and of a nonprofit, and there was the expectation that, you know, we made a contribution to the organization as being a being a member of the board, in addition to trying to talk to some other people about fundraising. So I think that, that the fundraising part is, is an expectation. And I do remember years ago, you know, not this administration but a couple of administrations past, at Webster they kind of complained sometime that they weren't getting enough money from people who were on the board. They were disappointed that they didn't write bigger, bigger bigger checks. So I think that's an expectation. And I think in the management literature, you see exit and voice. And I think that sometimes people who are on a board and then when a problem comes up or a set of problems, they kind of have a choice. Either they can become more engaged and express, you know, their concern and voice, or they say, oh, this isn't the central part of my life. This is, this is too much of a problem. I'm just gonna resign and get off, you know? And, and so, you know, if you have a board that, that too many people exit when there's a problem, then the problem doesn't get, doesn't get addressed and solved.

Yeah. Yeah. And just, you know, even in addition to the work I do for College Viability and the College Viability app, I've done a lot of research and writing on consolidation mergers, if you wanna call it, but I use the term consolidation. They're synonymous. Would you ever think in your own mind that Webster would consider a consolidation or merger with another regional or national college group?

I, I have my PhD from Case Western Reserve University, which was once Case Institute of Technology and Western Reserve University in Cleveland, and they were across the street from each other. And they, they merged just before I arrived in 1969 in the political science department. And, and there was a social science department on the other, on the Case side. and they negotiated back and forth about the merger of those two departments the whole two years I was there. And I kept telling people that if they can merge the football teams, they can merge the political science departments. And eventually they did. Uh, but, but that was kind of an ideal merger because Case was, was science and, and Western Reserve was liberal arts and professional schools like law school and, and medical school. I don't see that kind of match with Webster and any place in, in St. Louis. You know, I don't see that kind of a natural match that's going to, to occur. And, and, you know, there's, there's mergers and there's acquisitions. And my, my younger brother was an executive with the Neutrogena company, and eventually they were bought out by Johnson Johnson, and He said somebody asked him whether it was a merger or an acquisition, and he said, you know, millions of dollars Neutrogena, billions of dollars J&J, you tell me whether it was a merger or an acquisition.

Yeah.

So, so, you know, it would seem like it would be more likely that, you know, maybe some bigger place would want to, to acquire Webster for its real estate or something else. But it, but a, a real merger of kind of two equals, like Case and Western Reserve, two equals with different, you know, different histories and functions is probably not quite as likely in the St. Louis environment or even a for-profit from someplace else in the country. I mean, what advantage would they have in acquiring Webster unless they just wanted a bunch of buildings in Webster Groves?

Yeah. Yeah. And just to follow up on that with another question, and I see this across the country, and that colleges in financial stress like Webster— and that's been well documented by Steph Kajolian and Blythe Bernhardt in the St. Louis Post-Dispatch— they, they say we're going to start new programs, new degrees, new majors, new courses. And, and from my perspective, they kind of throw these things up against the wall and hope they stick. What's your perspective on Webster being able to do that and being able to generate materially significant new revenue from new stuff?

Well, that's, that's been going on for years. And in a sense, you know, Webster emerged out of the, out of the near bankruptcy of the early 1970s with the development of the graduate and undergraduate business, uh, business programs and, and taking those programs in an innovative format and taking those programs the military bases and other civilian sites. So that kind of innovation, you know, was very successful for Webster. But all along there was always the, you know, the administration would push and faculty would say, well gee, if we just had Program X or Program Y. And, and sometimes those worked and sometimes they didn't, um, you know, kind of particularly specialized programs, uh, uh, the in my time as a chairman of the management department, the two biggest programs in our department and in the school were the undergraduate basic management program and the graduate basic management program, you know, and the MBA, you know, kind of big generic programs because you get some economy of scale when you're putting a fair number of students into the same sets of courses as opposed to having, you know, kind of a narrow-focused specialized program that doesn't have many students. So unless you latch onto something that is, you know, particularly appealing or particularly unique, then just adding another program, another specialized program may not really help your finances that much.

And so I assume, Jim, I know you have, you've read about the demographic cliff and that's upon us shortly. When there won't be enough 18-year-olds to fill all these college seats coming up, and the intense financial pressure that's put on, on most non-selective private colleges across the country. In your mind, how does Webster differentiate themselves in light of the fact that the supply is too high and the demand is too low in the coming years?

Well, from an undergraduate perspective, one of the principal reasons that Webster started campuses in Geneva and Vienna and, and, uh, so forth, was to, to differentiate Webster from other, other similar institutions by having an international campus that students could go to and, and go to kind of seamlessly and study for a semester or a year abroad and, and so forth, which was kind of, kind of unique and still somewhat, uh, somewhat unique. But Webster also innovated on the level of adult education. And, and the big innovation in the '70s, '80s, and into the '90s was, was the adult education market rather than the, than the undergraduate market. You know, I would say, you know, Webster had certainly a long tradition of, of fine arts programs and, and, uh, you know, developed a fairly good-sized business school, business school program for traditional age students. But the, the big innovation of Webster and the big driver of enrollment growth for Webster in the, in the '70s, '80s, and '90s was the, the graduate and undergraduate adult business school courses. So, you know, as, as more competition there and, and the market is somewhat smaller there probably than it was 15 or 20 years ago, then, then, you know, Webster needs to find another kind of innovation. And apparently now they're, you know, bringing in some students from, particularly from Asia, uh, in onto campus. And that, you know, may or may not prove to be a significant innovation for them. But it's a, you know, you have to, you have to offer something a little different than, uh, now the fact that it's a lot of Small colleges that are small liberal arts colleges are out in the middle of nowhere, and the fact that you're in a, in a suburb of a major metropolitan area, you know, offers some advantages for students who may not want to— you know, a student who lives in an urban area may not want to go out and live in Podunk for 4 years.

Yeah, yeah, yeah. And we see that, I see that all the research and reporting that I do, that, that urban and suburban private colleges, if nothing else, you have valuable real estate. Where that's not always the case in rural areas for small private colleges and even small publics. Wisconsin is going through all sorts of trauma with their publics because they don't have enough enrollment and they're consolidating, closing, all sorts of issues in Wisconsin on the public side. So let's go back to the Webster situation in the Post-Dispatch from earlier, earlier this month. And when I talked with the reporters from the Post-Dispatch, The Webster board chair had yet to respond one-on-one to the Post-Dispatch. He had only responded via email. Can you speculate on why that might be the case?

Well, I can speculate. I've never met the man, so I, I, I really don't know. Uh, as, as somebody who was a public official, uh, elected official for 24 years, I've got used to dealing with the press and, and enjoyed you know, enjoyed dealing with the press. And in fact, when I was a kid, I dreamed of being a reporter at one time, and that was just after I dreamed of playing shortstop for the Cardinals, and neither one of those really worked out. But, you know, I think I was comfortable. But on the other hand, I know a lot of people, even people, you know, active in public life, who Maybe because they were burned, or maybe because they're just, you know, not very confident in dealing with reporters, or just afraid that if they say something, it's going to be misinterpreted, or that they say something stupid, and then when it gets reported accurately, they get embarrassed by it. So I don't know why, you know, I mean, it's not the way I would do things. I mean, I would deal directly with the reporter and You know, and if I had confidence in the reporter and wanted to say this is for public consumption and here's a little background thing and I felt the reporter was professional enough to understand those differences, then I'd be comfortable at doing that. But I can't speak for him because I never have met the man and have no knowledge of why. Fair enough.

And then when you and I spoke recently, you You said you had come from a Webster University Faculty Institute meeting. That's correct, right?

That's right. Last Friday.

And just how would you characterize the mood of the faculty at Webster and how they foresee the future developing?

Well, I think it would be fair to say that there's concern among the faculty about the future of the institution in a changing world. But I didn't think that they— there was a sense that the place was about to close or fall apart. And, and I think that many of them, in, in my conversations with them, many of them talked about things that they're trying to do to, to— whether it's new courses and existing programs or, or developing new programs and doing things to try to, to enhance the viability of the, of the institution going forward. And, and, and and the education of students who come there. So I think there's a sense that, yes, we have problems, but a sense that we're working to resolve those problems. So in that sense, a kind of positive feeling that they can do something to shape the future.

I'm guessing you were not particularly surprised at the vote of no confidence from the faculty and the student protests that came out after the Post Dispatch stories.

Um, no, it didn't. And, and apparently there was, you know, some disagreement among the faculty. It wasn't the unanimous vote. And whether that disagreement was, no, we don't think we should do a no-confidence, or whether it was we shouldn't do it at this particular time, you know, I'm not, I'm not, uh, certain. But I think that all of the, of the publicity, and in addition to the obvious, uh, problems that have been felt over the last few years because of the budget cuts of one kind and another, that there was a sense that the administration, you know, was not doing what they should be doing in terms of managing well the fiscal stability of the university. So it's not a, you know, in that sense it wasn't a surprise that the vote was was taken.

Yeah, I noticed it was, it was a reasonably close vote in terms of numbers. It wasn't even close to being unanimous.

No, no. And as I say, I'm not sure. I had some sense that part of that was not, was the sense that, that it's premature or we didn't have enough time to think about this in advance.

So, so I have, Jim, I've regularly made the case that we are in the higher education version of the Moneyball era. When there is all sorts of data out there from iPads and financial statements and 990s and all that kind of stuff. Given that we're in that moneyball era for colleges, in your opinion, how do private college— private colleges only will be our focus— how do private college boards of trustees move forward to avoid the, I guess, are characterized as awful press and public relations that Webster University just experienced?

Well, I think from a public relations standpoint, you know, as we discussed a few minutes ago, the kind of failure to quickly respond to, to what was a minor issue, you know, kind of escalated. And, and so, you know, one way is be more public relations savvy and don't be tone deaf to the fact that, uh, you know, if there's a story in the newspaper about you're failing to pay for rent, you know, that maybe people are going to take that as a as a symptom of a much larger, as a much larger problem. On the other hand, you know, an administration and a board and so on can't be lying or deceiving about, you know, real financial issues. And what happened here was, you know, a minor issue escalated into people looking closer at the real financial issues of Webster in terms of, you know, deficit for several years, several years running, and so forth. So I'm not sure how that plays out exactly, but I think that the board and administration need to pay attention to the positive part of public relations and to tell a good story You know, and to be honest about the bad story. Don't try to hide or cover up the bad story because it's going to come out, you know, and when it comes out, if you've tried to hide it or lie about it, you know, you're going to be found out. So, you know, you don't necessarily issue a press release saying we had a deficit this year, but on the other hand, you know, you want to be kind of straightforward with what what the real issues and to address them and not try to cover them up. Now, the, you know, the Moneyball Oakland was the Oakland A's or the picture for the Moneyball book and so forth. And, you know, basically they tried to be efficient and not spend a lot of money on free agents and develop their own players and so on. On the other hand, the Oakland A's haven't been in the World Series for quite a while, so it hasn't been completely— the Moneyball for them hasn't been completely successful, but I guess it's kept the franchise going. So, so, you know, I guess the Moneyball analogy would be that, that an institution needs to be efficient and, and spend money wisely and so on. But you've got to have some good pitchers and hit some home runs if you want to get to the World Series.

Also, I like that analogy. I think I'm going to steal that. And I follow these kind of stories across the country and I have people drop me notes all the time about colleges. And one of the patterns I've seen, Jim, is these colleges, especially the ones that have closed, will through their media and whatever sources say, we're fine, we're fine, we're fine, we're closed. And that's just a travesty for so many reasons. Now, Webster is highly unlikely to close, I understand that, but that, that upfront honesty about the situation is not commonly practiced by these places in trouble. And students— there are all sorts of, of horror stories about students and having to scramble to get new classes, new courses, new colleges, and all that kind of stuff that goes with it. Yeah, and I, I, I, I— it concerns me, concerns me a lot. So, and that takes me to, to a question about private colleges and closures. And again, I'm going to ask for your perspective, your opinion. And folks have bandied about all sorts of percentages of private colleges that will close. Since 2016, you've had one, about, not quite one private college closure per month. It's about 80 a year, 90 a year, something like that.

I didn't realize the number was that high.

Yeah. Yeah.

I mean, I, you see, you see press reports every now and then, but I haven't studied it like you have. And so, so, uh, That's a higher number than I would've guessed actually.

And you know, the analogy that I draw, there was a politician who says a billion here and a billion there, and pretty soon you're talking about serious real money. Same thing here. You know, a couple hundred students here, a couple hundred students there, and you're talking 10, 20, 30,000 students who've lost their college homes. And that's what we've seen in the last 6 or 7 years. But attach the Jim Brassfield thoughts to college closures in the coming years, especially for private colleges.

Well, I, as I tell you, I, I think the ones that are most, uh, at risk would be small liberal arts colleges with only, you know, 1,000, 1,500 students in, in rural areas. And, and where kids from cities don't want to go to live in a rural area and, and don't, don't like the idea of a small college like that without a football team and, and, uh, and so forth. So, so they seem to be the most vulnerable. But as you mentioned, I can see some second and third tier state universities also, you know, the enrollment cliff hitting them. The advantage that they have is that they're going to have some money from the state and the local community leaders don't want to see their local college close. So they put pressure on the, on this, on the state, even if they're losing losing money, they put pressure on the state not to, not to close their institution. Whereas, uh, uh, same kind of institution that is a private institution doesn't have that kind of backing and support and is more likely to simply go under, particularly if they don't have much of an endowment to, to tide them over. And then, you know, I'm sure many institutions were hard hit by COVID and, and disruptive in a whole variety of ways that COVID hit, just as I think Webster was disrupted. And the, you know, the financial losses and so on increased because of COVID because students weren't coming to class and, you know, maybe not going to school at all. Adult students, you know, may drop out because of COVID And so I think that while I don't have I don't have a sense of numbers like, like you do, but it does seem to me that, that there probably are dozens of, of, uh, colleges over the next few years of one kind and another that'll, that'll close. And, and maybe some of the, you know, the government is kind of cracking down on some of the for-profit institutions that really were, were often ripoffs of, of students. And, and so I, I suspect some of those places will, will close if they haven't already. Because the government is cracking down and making it harder for them, students, to get loans, government loans to go to those places. And so that's a, that's a kind of institution we haven't mentioned, but I suspect they are also one that, uh, you know, if they're not making a profit, they're going to close down pretty quickly.

Our guest today has been Dr. Jim Brasfield, a longtime faculty member and community leader in the Webster Groves region of St. Louis. It's a suburb of St. Louis proper. Jim, thank you very much for making time today, and we'll look forward to talking with all of you and sharing additional updates on This Week in College Viability in the coming days. This is Gary Stocker. So long for now.