Monday, September 20, 2010

Report Released on Financial Advantages of Mergers

I normally focus this blog exclusively on college and university mergers within the United States, but wanted to share an interesting report recently released in the United Kingdom. There tends to be much debate as to financial advantages of mergers, with efficiencies frequently listed as a top reason for considering a merger by proponents. Historically, there has been little to no conclusive research to show that financial efficiencies have been realized due to university mergers.

PricewaterhouseCoopers suggests that mergers and collaboration "offer UK universities a financial lifeline" and must be considered in this economy. The report continues to offer a "how to" for successfully implementing a merger.

In the end, financial benefits of mergers are difficult to prove, at best, through post-merger analysis. University merger experts James Martin and James E. Samels suggest that if considering a merger for financial reasons alone, it is being considered for the wrong reason. Mergers should be considered for mutual growth, for two institutions to become stronger together than apart. Whatever financial efficiencies result in the end are an added benefit.

The full report is available online here.

Proposal Floated to Merge the University of North Dakota and North Dakota State University

Bill Kiefer, a Fargo, ND financial planner and North Dakota State University alumnus, has proposed a merger between NDSU and the University of North Dakota. He cites potential efficiencies and prestige of having one flagship state university.

have run the gamut, but most feel that an all-out merger is not feasible due to reasons including the physical distance between campuses, political concerns and alumni loyalty.

In the end, a merger question such as this must be boiled down to asking, "Are we better together or apart?" Implementation issues can be resolved. The "frictional" time and costs are not recalled 50 or 100 years down the line. What is recalled is the result of the merger, which can oftentimes allow an institution to take a quantum leap forward in institutional offerings, prestige, research portfolio, student and faculty recruitment and more.

However, serious concerns should be addressed, not the least of which are cultural issues and the deep-rooted notions of institutional identity and alumni and community loyalty. If these issues can be resolved in a way that satisfies most, however, the combined institution may be much stronger as a result.

Kiefer should be commended for his vision and initiating this discussion. One student posting a comment online about the story suggested synergies such as the ability to be enrolled at one institution and taking courses offered at the other. Kiefer's proposal has enabled this type of positive discourse at the very least. Kiefer's only mistake? Coming forward to the public with only a rough idea. If he was serious about bringing this idea to fruition, he should have begun with conversations with the institutions' leaders, state legislators and the University System chancellor. From there a realistic plan could have developed, with the core merger issues addressed, to then be presented to the public. At that point, the merger would have been well on its way, with the remaining task of selling it to the public. There is a major difference between presenting an idea as an individual and presenting it as a unified front of state higher education and political leaders.

Combining two higher education institutions with duplicative programs is always the most difficult type of merger to enact. As opposed to mission-complimentary mergers without the duplication of programs, many hurdles must be overcome. How does one reconcile two English departments, two mathematics departments, two chemistry departments - let alone two athletic departments rife with tradition and nostalgia? People begin to get territorial and dig in. Merging a free-standing medical school or a law school into a comprehensive university entails much less friction.

Credit Kiefer for initiating the discussion, and it will be interesting to see where it goes from here, though it does not seem to have much traction. In the end, what is seen here is a proposed merger that could have enormous potential, difficult implementation and a flawed early-onset approach.

Tuesday, July 20, 2010

Inside Higher Ed: Mergers and Survival

An Inside Higher Ed article examines a merger that never happened between Dana College and Midland Lutheran College in Nebraska, and mulls prospects for college mergers in the future. The article centers on mergers happening mainly for financial reasons, with one institution bailing out another in fiscal disarray.

Strong Start for UMass Law

Following the merger of the Southern New England School of Law with the University of Massachusetts Dartmouth, the new UMass Law School is enjoying a larger class with enhanced academic credentials. Outside of financial advantages, these types of synergies are exactly what merger proponents tout as a benefit of such mergers. The Southern New England School of Law became instantly more prestigious and reputable due to its affiliation with UMass Dartmouth, and this while the law school has yet to be accredited by the American Bar Association.

Ashland University Receives Approval to Merge With MedCentral College of Nursing

Ashland University in Ashland, Ohio, has received approval from the Higher Learning Commission of the North Central Association of Colleges and Schools to merge with MedCentral College of Nursing in Mansfield, Ohio.

Sunday, May 23, 2010

San Antonio Merger Discouraged

A special advisory group created within the University of Texas System advised in a report that there is no compelling reason or cost benefit that would result from a merger of the University of Texas at San Antonio (UTSA) and the University of Texas Health Science Center at San Antonio.

  1. A merger may advance UTSA toward national stature, but the merger's effect in that regard would be marginal at best. Advancement is largely dependent on the quality of students and faculty and the level of funding.
  2. A merger would have a significant detrimental near-term effect on the UT Health Science Center - San Antonio as a result of the costs, conflicts, disruptions and distractions during the three to five years of integration post-merger, as well as a negative impact on philanthropy in support of the health science center.
  3. Both institutions have strong leadership and enjoy positive momentum, and a merger would effectively delay achievement of their mutual goals of attaining national stature.
In my opinion, the advisory group, the UT System Board of Regents and constituents of both institutions and the greater San Antonio area are missing an enormous opportunity by deciding against this merger. This is exactly the type of merger that has the best chance for success, in that it is mission-complementary and mutual growth. The missions of the two institutions work together - they do not overlap, creating duplication of programs. And both institutions would come from positions of strength, to become stronger together than they would remain apart. This truly would be a match made in heaven.

The key findings of the advisory group reek of political wrangling to derail the merger. In my opinion:
  1. The advancement of national stature for the two institutions is certainly dependent on the quality of students and faculty and the level of funding. However, merging the two institutions would allow the combined institution to jump forward substantially as budgets, workforces, student bodies and more are combined and synergies achieved. Opportunities begin to present themselves in major institutions of this size and scope.
  2. The potential "detrimental near-term effect" on the UT Health Science Center is overblown and shortsighted. To say that the costs, conflicts, disruptions and distractions would be a major hindrance is overstating the issue and underestimating the people of the institution and their ability to handle the execution of the merger. To say that there would be a "negative impact on philanthropy in support of the health science center" - as someone who works in higher education fundraising, I simply do not see how this can be the case. While working at The University of Toledo (UT) during the merger with the former Medical University of Ohio (MUO), there was instant excitement on the part of both parties. Those of us from the UT side were thrilled to have gained a medical school and a university medical center, and those on the MUO side were able to enjoy the perks of a comprehensive institution, complete with undergraduate education and student life, visual and performing arts, athletics and more. Philanthropy can only be emboldened at a merger such as this, assuming that it is executed with caution, transparency and participatory implementation processes.
  3. That both institutions are currently enjoying visionary leadership and positive momentum are not reasons to take the merger off the table - just the opposite. Mergers should not happen only for reasons of necessity such as financial disarray and the like. Those mergers are doomed to fail. When both institutions are coming from positions of strength - those mergers are likely to be the most successful.
In the end, one giant missed opportunity results in the San Antonio community. It is unfortunate for all of those that would potentially benefit from this merger. Comprehensive benefits of mergers such as these can take years to realize, and analysis cannot be done on the short-term. One hopes that leaders that are true visionaries will resurrect this concept at some point in the near future and bring it to fruition.

Monday, May 10, 2010

Additional Mergers Proposed in New Jersey

New Jersey Governor Chris Christie created a commission to examine the entire state's college and university system. The commission, to be headed by former Governor Tom Kean, may propose that the University of Medicine and Dentistry of New Jersey be broken up and merged with Rutgers University and the New Jersey Institute of Technology.

The same merger had been proposed by previous administrations, but never gained serious traction. In 2002, then-Governor Jim McGreevey proposed an outright merger of the three institutions into one "University of New Jersey."

Kean suggests that the commission has an "open mind," and that the proposed mergers are only one aspect of a huge, broad mandate" - to evaluate the "overall quality and effectiveness" of higher education and to make it more affordable for New Jersey students to stay home for college.

The previously discussed merger of Thomas Edison State College into Rutgers University also remains on the table.

While these proposed mergers may be mission-complementary, they are initiated by the state, and not by the institutions. However, facing serious budget shortfalls, state officials may see that there are no other options besides these forced mergers. Institutional leaders will want to have as much say as possible in these discussions in order to shape the result in a desired manner. Otherwise, a full lack of cooperation on the part of the institutions may result in a mandate from the state that may be less than desirable.

Saturday, March 20, 2010

New Jersey Governor Proposes Merger of Thomas Edison State College and Rutgers University

The governor of New Jersey has apparently unilaterally proposed a merger of Thomas Edison State College into Rutgers University. The proposal was outlined as part of the governor's Fiscal 2011 "Budget in Brief." Thomas Edison serves 18,000 students, nearly all adult, pursuing continuing education with flexibly-designed courses. The President of Thomas Edison, George Pruitt, is vehemently opposed to the merger. Even Rutgers President Richard L. McCormick called the merger an "unsolicited proposal" that was "not his idea" and "not something he coveted or wanted."

Like the recent proposed Mississippi mergers, we have a governor on his own suggesting radical changes in the fabric of his state's higher education institutions. Again, this is the notion of having something being done "to" you, not "by" you. Universities are communities of people, all working towards and sharing in the common mission of the organization. Broad buy-in for a change such as a merger must take place. Otherwise, merger proponents face a steep uphill climb, with potential negative effects that can last for extended periods of time. Mergers are successful when they are initiated and supported from within the institutions, not the opposite.

University of New Hampshire, Franklin Pierce Law Center Move Towards Merger

The board of trustees of the University of New Hampshire has approved an affiliation with the Franklin Pierce Law Center. A full merger can take place pending approval by the American Bar Association and a regional accrediting body. At that time, the law school will become the University of New Hampshire School of Law.

This merger comes after a similar announcement between the Southern New England School of Law and the University of Massachusetts Dartmouth. It appears that stand-alone law and medical schools are finding it increasingly difficult to compete with counterparts that are part of major research institutions, and are dwindling in numbers.

Sunday, March 14, 2010

USU-CEU Merger Legislatively Approved

The merger of Utah State University and the College of Eastern Utah will become official with the Utah governor's signature, after approval by the state legislature. The merger will take effect July 1, and the 2,100 student CEU will be known as Utah State University - College of Eastern Utah. Merger benefits outlined by proponents include providing more Utah students with opportunities for high-quality higher education.

Recent articles on the subject are listed below.

Sunday, February 28, 2010

Mississippi Mergers Update

The bill to merge three historically Black institutions in Mississippi recently died in committee. In the meantime, Mississippi State University and the Mississippi University for Women are exploring opportunities for enhanced collaboration. An opportunity to cut costs, MUW President Dr. Claudia Limbert prefers to call the arrangements "shared services." Departments that may be consolidated include accounting, human resources and payroll. Dual degree programs have also been announced in culinary arts and nursing. While stressed as "not a merger," this type of collaboration is quickly being hailed as the type of cooperation that may serve as a model for other institutions in the state.

In the end, while merger proponents may not have the mergers they wanted, this collaboration between MSU and MUW is likely more than what would have taken place otherwise. It is important to note that the collaboration discussions between MSU and MUW were initiated from within the institutions. Under this impetus, decisions such as these are likely to take root. Being pressured by external forces only emboldens resistance. It is the concept of having something done "to" you as opposed to "by" you. Kudos to the leaders of these two institutions for recognizing an opportunity to make a positive change from this situation. It will be interesting to see if any other institutions in the state follow suit.

Tuesday, February 16, 2010

Update on UMass Dartmouth Law School Merger

The Massachussets state Board of Higher Education approved UMass Dartmouth taking over the donated assets of the Southern New England School of Law and creating the state's first public law school. The university plans to upgrade the law school program and seek American Bar Association accreditation.

Detractors of the merger still point to poor standards at the former Southern New England School of Law as well as budget constraints on the part of the state.

A committee of academics, judges, attorneys and higher education experts will oversee facilitation of the merger.

Recent articles on the subject are listed below.

More on the Mississippi Proposed Mergers

Continued discussions on the proposed university mergers in Mississippi reaffirm that the merger plan is "dead," and Jackson State University President Ronald Mason continues to take heat for his merger proposal.

In the meantime, the merger discussion has generated much more debate about problems and potential solutions at the Mississippi University for Women, "The W." Major issues at play include a potential name change, substantial tuition increases and cuts in jobs, degrees, course offerings and departments.

Recent articles on the subject are listed below.

Update on USU-CEU Merger

Enthusiasm is high in Southeastern Utah as the merger between Utah State University and the College of Eastern Utah progresses. Much of the previous opposition to the merger has now subsided.

Sunday, January 31, 2010

Update on Proposed Mississippi Mergers

The discussions on merger proposals in Mississippi continue to get significant press, while prospects for the mergers taking place remain slim. Options on the table, as proposed by Governor Haley Barbour, include merging Mississippi Valley State and Alcorn State into Jackson State University, and merging Mississippi University for Women into Mississippi State University. The impetus for the mergers stems from a significant state budget shortfall and a desire for greater efficiencies among the state universities. Leading state legislators have called the proposals 'dead on arrival' and suggested that no mergers will occur. The latest proposal is by Jackson State President Ronald Mason, Jr. who developed an idea to merge Alcorn State, Jackson State and Mississippi Valley State into a new "Jacobs State University." Mason has received quite a bit of negative response on the idea from his constituents and legislators alike.

While the proposed mergers clearly have racial undertones with the HBCUs, the need or lack thereof for HBCUs is not the central question. Rather, budget issues have forced these discussions, and for that reason, the budgetary debate should continue to be foremost in the minds of legislators. Some Mississippi politicians have suggested that the state can and should support eight public colleges and universities, and they simply should be funded at an appropriate level. These decisions are proving to be difficult ones right now in legislatures all around the country.

Recent articles on the subject are listed below.

Baylor College of Medicine Merger Update

After failed talks of merging with Rice University, the Baylor College of Medicine is now in discussions on merging with former parent institution Baylor University. These discussions have already drawn the ire of many who oppose the would-be merger. In a petition, signers commented on what they feel is a conflict between the religious-affiliated university and the research-based medical school. Issues such as evolution, stem cell research and sexual orientation could prove to be difficult to reconcile with the mission of the Baptist university. Baylor College of Medicine Interim President Dr. William Butler attempted to ease concerns, suggesting that "Any new affiliation agreement between Baylor College of Medicine and Baylor University will assure that BCM maintains its independence and importantly, its scientific and academic freedom." He continued, "Our board is firmly committed to remaining a non-sectarian institution and continuing with our current non-discrimination policy and affirmative action program."

Monday, January 18, 2010

UMass Dartmouth Law School Merger

The State of Massachusetts will have a public law school following an acquisition of the Southern New England School of Law by UMass Dartmouth. The UMass board of trustees approved the merger in December, and approval by the state board of education is pending.

Mississippi Mergers Update

The president of Mississippi State University said recently that he does not expect approval for a merger with the Mississippi University for Women. President Mark Keenum suggests that there isn't the political support in the state legislature for any of the university mergers proposed by Governor Haley Barbour.

While House Universities and Colleges Committee Chairman Kelvin Buck calls the merger proposal out-of-the question, his Senate counterpart suggested otherwise. Senator Doug Davis calls early decisions premature, and said that he was "not prepared to say a merger is dead in the water." Davis said that he wants to know how the state universities plan to cope with budget cuts of 12 to 15 percent, and suggested that enhanced efficiencies cannot bear the brunt of these types of cuts, and that other options must be considered.

Rice University - Baylor College of Medicine Merger Update

Rice University and the Baylor College of Medicine will not merge in the near future. Inside Higher Ed and the Chronicle of Higher Education report that merger talks ended between the two institutions. While there were voices on both sides of the proposed merger, it appears that financial concerns related to BCM scuttled the merger. Rice attempted to put the financial picture to the side with conditions outlined in deliberations, but it appears that the financial concerns continued to take center stage.

While the proposed merger may have been mission-complementary - a combination that programmatically made sense - the merger would not have been a true mutual growth merger. In mutual growth mergers, both institutions come together out of positions of strength. To an extent, this merger would inevitably have been considered a bailout of BCM by Rice. Nobody wants to take on a sinking ship. Perhaps if BCM can get their financial house in order, this merger can be revisited in the future.

Sunday, January 3, 2010

Mississippi Gov. Haley Barbour on Proposed Mergers

Mississippi House Universities and Colleges Committee Chairman Kelvin Buck recently said that the proposed higher education mergers "wouldn't happen on his watch," and Governor Haley Barbour defended his plan for merging state universities. Barbour suggests potential cost savings of merging the institutions including fewer administrators, athletic programs and reduced degree and course offerings. Barbour remarked, "Candidly, we don't need eight schools of education in Mississippi. And I think you would see some moving around of offerings, not only graduate offerings but undergraduate courses as well."

I don't doubt that the State of Mississippi is in a serious budget crunch. Other states including Ohio have looked at reducing the duplication of programs among state universities. But for Barbour to delve into a racially-sensitive issue (by suggesting merger of the HBCUs) to solve a budget problem was probably not the best idea. Merging colleges and universities should not be done exclusively for fiscal reasons anyway, so this idea never really had legs to begin with.

Saturday, January 2, 2010

Proposed Shreveport, LA Mergers

Ongoing discussions of university mergers in Shreveport, LA have resurfaced at a recent meeting of the Louisiana Postsecondary Review Commission. Potential mergers include a combination of LSU-Shreveport and the LSU Health Sciences Center, or LSU-Shreveport with Louisiana Tech University. These discussions have been initiated by politicians and commission members. So far, university officials have been non-committal on the possibilities, and not endorsing any specific options. Like the recent merger discussions in Mississippi, impetus for these mergers has come from outside the institutions, not within – a key indicator that typically does not bode well for merger formalization and implementation. Also of note is that the possibility of the LSU-Shreveport merger with the LSU Health Sciences Center would be a “mission-complementary” merger, as outlined and recommended by Martin and Samels (1994), in that it would add a medical school to the comprehensive university. Alternatively, a combination of LSU-Shreveport and Louisiana Tech would involve combining institutions with duplicative programs, again a model that can prove difficult to formalize successfully.

Recent articles on the subject are listed below.

Shreveport Mayor urges possible LSUS, LSUHSC merger (

Tech LSUS merger eyed (

Lots of hurdles before LSUS can merge (

Friday, January 1, 2010

Brief Background of American Higher Education Mergers

In my opening post on this blog, I promised to provide a brief background of mergers in American higher education. A much more extensive review can be found in the literature review of my dissertation. While mergers have not been terribly common in American higher education, quite a few have occurred over the years. It is also the case that this is a topic that has not been examined in great detail in the literature. A few books have been written on the topic, a handful of journal articles (most focusing on mergers outside the United States) and a few dissertations.

Central to the understanding of traditional merger thought was that institutions merged out of financial necessity, with one institution "bailing out" another in financial disarray. This view was espoused by John D. Millett in his 1976 book Mergers in Higher Education: An Analysis of Ten Case Studies. During this time, Millett found that the mergers he examined all involved some sort of financial difficulty by one or more of the partners involved, and the merger facilitated survival in some sense.

Millett's approach is contrasted by a more modern one, that of the mutual growth model. In 1994, James Martin and James E. Samels published Merging Colleges for Mutual Growth: A New Strategy for Academic Managers. In this text, Martin and Samels posit that mergers should occur for mutual growth, not for financial reasons. The mutual growth concept entails two or more institutions coming together each out of positions of strength, with the end product combined being stronger than the individual parts. This is merging for the "right" reason, and Martin and Samels would suggest that merging for financial reasons can mean setting up the merger for difficulty, and possibly failure. Mergers that do not involve the duplication of academic programs are also more likely to succeed, such as adding a medical or engineering school into a comprehensive university. Mergers involving the combination of two liberal arts institutions, for instance, may have much more difficulty due to the controversial nature of their overlapping programs. How does one reconcile two English department chairs? Two sets of English department faculty? Different requirements and curricula in the English program?

A list of higher education mergers in the United States shows a broad cross-section of institutions, geographically and with respect to the type of merger. Mergers that are proposed today tend to fit both the traditional and mutual growth approaches, though financial factors seem to figure in, at least in a minor way, in nearly all cases. In some of the strongest cases for mutual growth mergers, cost savings is listed as a minor potential benefit of the mergers. Major potential benefits of mutual growth mergers typically include enhanced opportunities for academic synergy (connection between programs and possibilities for new programs), greater opportunities for research funding, enhanced economic and political clout and more. President of The University of Toledo, Dr. Lloyd Jacobs, has one of my favorite sayings about universities that directly relates to the merger of institutions. Dr. Jacobs says that the degree that you hold from an institution is like a variable stock certificate; it can go up or down in value. Therefore as an alum of a university, you should want the institution to prosper, thus making your degree more valuable. Indeed, with mutual growth mergers planned and executed well, the institutions can become more prestigious, thus increasing the value of the degrees of alumni.

This blog covers proposed mergers of both the traditional and modern approaches, but added emphasis is given to mergers of mutual growth. This is due to the fact that the institutions examined in my dissertation followed the mutual growth model, and because I agree with Martin and Samels that merging under these circumstances provides the best opportunity for success in creating a vibrant, dynamic merged institution.

Rice University - Baylor College of Medicine Merger

A proposed merger between Rice University and the Baylor College of Medicine has been under discussion for more than a year. Rice University President David W. Leebron recently wrote a column describing the challenges and potential benefits of the merger.

This proposed merger is of similar type - mutual growth - to the mergers that I am examining in my dissertation. The institutions in my study also involve mergers between comprehensive institutions and free-standing medical schools. The higher education merger literature suggests that this type of merger has the best chances for success, as two strong entities come together to make them stronger combined, and they do not involve the duplication of programs (two arts and sciences colleges, two business colleges, etc.). It will be very interesting to see the progress as this merger moves forward and how the merger may impact the Houston area.