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00:00It's about 25% growth in our undergraduate population, but look, the state of North
00:05Carolina is growing so strongly. If you want to feel old, I'll tell you that our incoming freshman
00:10class is the class of 2030, and by 2030, North Carolina will be the seventh largest state in
00:18the country. So we can't grow as fast as the state grows, but we have an obligation to grow as
00:24fast
00:24as we can grow to try to reflect the enormous growth of North Carolina. When it comes to the
00:30prosperity of the UNC system, though, is population growth, student population growth. Does that get
00:37you there? Is that fiscally prudent to pursue that track rather than something maybe a little bit
00:42more leaner? Well, it will take 10 years to add those 5,000 students because there are implications
00:48everywhere you look for housing, dining, parking, our large lecture classes. So we need to add the
00:55infrastructure as we add the new students. But we already have 1,000 additional students between
01:01last year's freshman class and this incoming freshman class. So we're well on our way.
01:06I am curious just about some of the funding issues, obviously tied to the state budget in North
01:12Carolina, or rather the lack thereof, and some of your enrollment funding that I would assume
01:17would apply to some of your growth ambitions are still locked up in that. Do you anticipate
01:21that the state legislature will get this sorted out anytime soon? Optimistic that we'll get a state
01:26budget here soon. I know our legislators are working hard on it. Look, we're really fortunate in North
01:32Carolina to have longstanding, broad bipartisan support for the UNC system going back decades. Most
01:41years, North Carolina spends a higher percentage of its tax revenue on higher education than
01:47any other state in the country. Number one out of 50. So we're really fortunate in North Carolina to
01:52have that kind of exceptional support from North Carolina taxpayers.
01:56What is the state of higher education now? And I ask that because a few years ago, there was a
02:02lot of
02:02discussion as to whether college was worth it, whether you could just go right out of high school
02:07into private industry and make a decent living, whether there was a real return on investment. And I feel
02:13like that talk has gotten more intense, particularly now with artificial intelligence and the concerns
02:17about job displacement. A lot of challenges, certainly around technology, around demographics. But college was never just
02:25about the transmission of information. Certainly our university, which is the first public university in
02:32America. We have never been just about transferring information to to our students. If we were, then
02:40YouTube would have put us out of business a long time ago. We were founded to form citizens. And if
02:49information
02:49is ubiquitous, we don't think wisdom and judgment are ubiquitous. And, and we're going to try to form
02:57citizens who bring our state and our country forward as we've been doing since 1793. I mean, not to be
03:04glib about it though, it's still a financial proposition. I mean, most people gravitate to college because
03:09they're told that that is the way to make a better life for yourself financially. Does UNC do that?
03:15By all means. So Princeton Review just put us number three in ROI, not the only measure of a college
03:22education, but an important one for students and their families return on investment. The only schools
03:28above us were pure play engineering schools. So pretty good story to tell about the value of a Carolina
03:34degree. Do you support some of the efforts to provide more transparency and more data about what
03:40that ROI or maybe a lack of, or different sort of RO something would be? I know North Carolina did
03:45a big
03:46study maybe two or three years ago doing just that. By all means, students and their families really need
03:51and deserve that data. You're right. We have a big study at the system level. Every degree program
03:58in the UNC system, we measure the ROI for, for each one of them. We need to get a little
04:04bit more granular
04:05and give students better relative data. That's really important for, for our incoming students
04:12in when, when they decide where to go to college and then what to study once they get here.
04:17Uh, I'm curious about your background, uh, Morgan Stanley, private equity. You ran the North Carolina,
04:23uh, budget, uh, for years and now you're running the university system. I am curious as to what your
04:28approach is to running UNC. Are you running it the way that you would run your private equity fund,
04:34the way you would run your business at Morgan Stanley, the way you would run it as a government
04:38official? You can't run a university like a business. The incentives are all different and
04:42the, the goals are different. We're, we've been around for 232 years because we have this profound
04:51sense of public mission. We're not trying to meet a quarterly profit target, but there are some things
04:58we do at the university that could be done in a more efficient or businesslike manner. And we do
05:04think a lot about making sure that we're using our resources as effectively as possible, which is
05:10obviously important as a public flagship. Like what? Can you give me an example? Well, for example,
05:15we're highly decentralized and so we're replicating our HR functions, our IT functions in a redundant and
05:23inefficient way across our campus. We can do a better job centralizing those functions,
05:29running them more efficiently, providing better results at the same time. Does that mean you need
05:34fewer staff, fewer faculty? You know, I think we probably do need fewer staff over time in functions
05:40like HR and IT. We've already done a lot through attrition. I'm not sure we need fewer faculty. I think
05:47we need more faculty as we increase our enrollment and as we try to serve the huge demand that we
05:53see
05:53for some of our most popular majors. Biology is a good example. It's our number one major
05:59and our fastest growing major. So, I mean, you've already identified a lot of cuts out there,
06:04close to a hundred million dollars, primarily by centralizing some of that back office stuff. How much
06:09further can you go with that? And based on some of the decisions that you've already made on a cost
06:15basis, what was the hardest decision that you did have to make? We're going to keep trying to be as
06:19responsible as possible with taxpayer money and there are a lot more opportunities out there to
06:27use resources more effectively, redirect the savings into some of these growth plans that we have,
06:34including hiring new faculty and renovating labs and classrooms. We haven't laid anybody off on an
06:42involuntary basis. I think that probably will be necessary at the margin at some point. Nobody likes
06:49doing that and we'll do as much as we can through attrition. When it comes to attracting students,
06:55and I know obviously a lot of them are in-state, but you still have a big out-of-state
06:58student body as well. Who are you competing against directly? So, the schools we think of as our peers
07:04across the board, UCLA, Berkeley, Michigan, Virginia, Texas, Florida. I'll tell you, I'm the longest
07:10serving president or chancellor of those seven schools, including Carolina, at just over two
07:17and a half years into the job. So, there's been a lot of turnover in higher ed. We look at
07:22lots of
07:22other schools depending on the topic, but when we think about our peer set, those are the schools we're
07:27talking about most consistently. I mean, as you sort of look at the cost equation for the school on the
07:33academic side, on the administrative side, there are a lot of people that are also going to look
07:37at what's been going on on the athletic side. And we put the asterisk that those are two tracks,
07:41both legally and ethically, for a lot of reasons. But when you look at the amount of money that the
07:45UNC spends on the athletic program, the amount of money that it might spend going forward with
07:50regards to the renovation or maybe the building of a new stadium, etc., how do you square that circle
07:56for those folks and for those taxpayers who look at that and wonder about that disparity?
07:59We have a really proud tradition in college athletics, 28 sports. We were just in the
08:04finals of the national championship for baseball in Omaha earlier this week. And we've been competing
08:12in intercollegiate athletics at Carolina since 1888. So, it's an important part of who we are. But
08:19right now, college sports is broken. It costs way too much. Nobody designed the current system. It all came
08:27about as a result of court rulings. And so, we think there's a need to bring some harmonization
08:33and rationality to college athletics. But a lot of those court rulings, I mean, they came out of
08:39at least the perception by a lot of the players that the way that the NCAA had run things for
08:44years
08:44was inequitable to them. Is there not equity now based on what those court rulings provided?
08:50I'm not saying every one of those rulings was wrongly decided. I'm saying that their collective
08:54impact has created this patchwork that doesn't really make sense when you're trying to run
09:00a top-tier college athletics program. We really need some more structure and predictability.
09:07There is a bill trying to work its way through Congress right now, sponsored by Maria Cantwell and
09:11Ted Cruz, that does look like it has bipartisan support and maybe potentially could actually make
09:16it to the floor for a full vote. Do you think what they're proposing, which would largely create
09:21more of a federal umbrella that would sort of address your patchwork issues, do you think that
09:26has a chance of actually being passed and becoming law? We've endorsed that legislation as have many
09:31of our peers. It's not perfect, but no high-profile bipartisan legislation is ever going to look
09:37exactly the way it would look if you could write it yourself. We're optimistic about it. I think the
09:42White House is supportive, so we're hopeful that that can get passed to make a difference.
09:46You think that would fix the economic issue going on right now that we've seen sort of unfold since
09:51those things, or does it just solidify sort of the big dogs and their advantage that they have over
09:57the mid-tier and smaller schools? No, it would make a big difference in creating more predictability
10:01and transparency as we try to run college athletics in any kind of reasonable way. Just the ability to
10:08enforce eligibility restrictions, transfer restrictions. I worry about us losing our
10:14connection to our fans if college sports stop looking like college sports and the Cruz Cantwell
10:21legislation will help us protect college sports. But then a lot of people would look at, you know,
10:26they look out the payout that you had to make to your former basketball coach, the huge pay package
10:31for Mike Malone, the new basketball coach, Bill Belichick on the football side. I mean,
10:36they are compensated handsomely, probably deservedly. And what would the players have with regards to
10:43being commensurate with their skill level and what they contribute to the school?
10:46Nobody's saying, let's not pay players. Pay for players is here to stay as it should be.
10:53But the Wild West that we have right now, our payrolls are increasing by 20, 30, 40 percent year over
11:01year. Players don't know what the market is. They're being taken advantage of by agents. There's no
11:06cap on agent compensation. We have players show up with multiple agents. It really is a completely
11:14unpredictable situation right now that I don't think is serving anybody particularly well.
11:19Can I ask you about Bill Belichick?
11:22Didn't start off too well the first year. Are you optimistic about what we're going to see
11:26come this end of summer, beginning of the fall?
11:29Really optimistic about the season. Great job recruiting, great job in the transfer portal.
11:35We kick off the season week zero in Dublin against TCU, which should be a lot of fun. They got
11:40us in
11:41Chapel Hill last year, so we're looking forward to the rematch in Dublin.
11:45I am curious too, when we talk about, I mean, obviously everyone knows the sports legacy at UNC,
11:51whether it's football, basketball, and some of the other sports as well.
11:54Is that important to you as you sort of look long-term for your career to preserve that? And
12:00I mean, when I say preserve that, I mean preserve the winning nature that's always been associated with
12:04UNC. Look, athletics are not the most important thing that we do at Carolina, but they're certainly
12:09the most visible thing that we do. And we have a remarkably proud tradition, as you say,
12:14not just in football and basketball, but we have the best programs in the country in women's lacrosse,
12:20women's soccer, field hockey. Very few schools are trying to compete at such a high level
12:26in as many sports as we are. And that's an important part of Carolina's history and tradition,
12:34and we're going to keep it that way. Speaking of history and tradition,
12:37there's been a lot of controversy over a new stadium. Is there going to be a new stadium,
12:42or are the plans to maybe just renovate the Dean Dome and try to bring it up to modern standards?
12:47We haven't gotten there yet. You know, we have to do something with the current arena. It's 40 years
12:52old. It needs some significant investment to keep it functional. So at a time when everyone's trying
12:58to find revenue, we don't have any premium seating in that arena. It's got some traffic and parking and
13:04other problems. We need to step back and figure out what the best course of action is. There's a lot
13:10of passion around it, which is a good thing. I worry about when people aren't passionate about Tar Heel
13:15basketball. And the progress on Carolina North, I think you had said in the past that you would
13:21expect a groundbreaking maybe sometime in the middle of next year? Yes, it's a really exciting project.
13:25So we have 800 acres, a mile and a half from our existing campus. We're going to build out a
13:30full
13:30blown new campus there that will focus on additional student housing, better facilities for STEM instruction,
13:39and trying to solve the really serious challenges we have around affordable housing
13:44housing in the town of Chapel Hill.
13:46So
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