Bloodbath in Fuqua: Duke Corporate Education sales of training programs were one third what they were two years earlier. Red ink flowing.

✔✔✔ In reporting to the Fuqua faculty on two masters degree programs proposed for Kunshan, the investigating committees noted that the business school has operated in the red for the past four years.

That surprised us, because after all, these people are supposed to know how to run a business and turn a profit (or more accurately, a surplus).

We were intrigued, of course, as we wanted to know why a school that could not get its act together in Durham was being allowed to go hell-fire into nine international cities all at once. The biggest of these, right now, is Kunshan, China, but there are others -- which the Brodhead Administration has suddenly become very silent about -- that are grandiose as well.

As we snooped, we were fortunate enough to obtain a document prepared for the Board of Directors of Duke Corporate Education. That's just one segment of Fuqua, but an important one.

Duke Corporate Education is a separate corporation formed by Duke and Fuqua to sell training programs to major corporations, and in the end pump its surpluses into Fuqua. There are plans for Duke Corporate Education to make use of Kunshan for its non-degree programs, as the business school itself hopes to offer degree programs.

The effects of the recession have been startling. A year ago we reported DCE -- as Duke corporate education is known -- had revenues in 2007-08 of $81 million.

In the following year -- with the world wide recession -- this tumbled to $47 million.

✔✔✔✔✔ Fellow Dukies, you haven't heard anything yet. The new document we received covers the 2009-10 year. Revenues tumbled again, to $29,626,844.

✔✔✔✔✔ The bottom line was a bloodbath. While losses in 2008-09 were $1.4 million, in 2009-10 there was deep red ink -- $7,093,310.

Small wonder that the Fuqua school started to hawk a $99 a night bed and breakfast deal to tourists -- to make up for corporate executives who normally would fill the rooms in the Thomas center.

✔✔ The $7,093,310 with a giant MINUS SIGN in front of it is all the more disconcerting because we believe that the Brodhead Administration -- in looking to Fuqua to make up (and disguise) massive operating losses anticipated in Kunshan -- was going to reach into DCE to the tune of $1.8 million a year, a sum obviously not reflected in numbers two years ago. Careful Readers will note we said "we believe," because no one in the administration is ever willing to sit down and go over these complicated matters.

With this contribution of $1.8 million annually shaky, the amount of subsidy from other Duke sources -- including $1.5 to $2 million a year from the strategic initiative fund -- is likely to increase substantially.

We believe Mr. Brodhead and his team owe us a full explanation, as this is highly relevant to evaluation of whether the entire Kunshan Initiative is sustainable or folly.

Thank you for reading this report from a Deputy FC.