John Fry and Denis O’Brian prepare Drexel’s transition as universities struggle

This is not the first time that John A. Fry and Denis P. O’Brien have passed on the leadership baton.

The two worked together in 2016 when O’Brien, former president of Exelon Utilities, was leaving his post as chairman of the Greater Philadelphia Chamber of Commerce and Fry, president of Drexel University, was taking up his new post.

Now it’s Fry who is leaving the university. He is set to move across town on Nov. 1 to become president of Temple University after 14 years at Drexel University. And O’Brien, who previously served on Drexel University’s board of trustees, will take the helm. O’Brien was named interim president last month and the two are working together, meeting individually and with teams.

” READ MORE: Drexel names Denis O’Brien as interim president; John Fry to assume office as Temple president on November 1

“Denis has been in the office every day for a month,” Fry said, pointing out that they have separate offices in the presidential suite across the street.

“It feels like a year,” O’Brien said, sitting across from Fry in a Drexel conference room earlier this week. “Has it only been a month?”

The private university in West Philadelphia is currently undergoing major projects, including a merger with Salus University, switching from a quarterly to a semester system – in addition to a major academic restructuring – and implementing an agreement with the U.S. Department of Education’s Office for Civil Rights to help Drexel handle complaints of anti-Semitism.

” READ MORE: John Fry of Drexel is elected as the next president of Temple and has the following plans

O’Brien, a Newtown Square resident who has served on Drexel’s board for more than two decades and worked for Exelon and affiliated companies for more than 37 years, said he plans to continue those efforts as the university searches for its next president.

“John has a great playbook and we have a lot of really significant and important initiatives prepared and underway,” said O’Brien, 64, who noted that he will not be a candidate for the permanent position. “So my strategy is not to reinvent anything, but to move these things forward as quickly as possible.”

“John and I have known each other for a long time. I am convinced that we will have a great handover and continuity.”

O’Brien was on the search committee when Fry was hired. He served on the trustees’ executive committee and chaired the Buildings and Grounds Committee, where he oversaw major projects including Schuylkill Yards – a multi-billion dollar development undertaken in partnership with Brandywine Realty Trust that transformed parking lots and industrial buildings between the Drexel campus and 30th Street Station.

O’Brien will not receive a salary in his interim role. Fry’s total compensation in 2022 was approximately $2.2 million, with a base salary of more than $886,000.

Drexel on enrollment and finances in a challenging environment

Fry’s departure also comes at a time when Drexel, like many other universities, is facing budgetary problems. Net tuition revenues have declined and fall enrollment numbers are still uncertain, in part because of ongoing problems with federal financial aid forms. Both Fry, 64, and O’Brien acknowledged that “cost adjustments” or “cuts” will be necessary, but did not elaborate on whether that might include staff cuts.

“Higher education is facing some challenges right now,” O’Brien said, citing recent closures of local colleges, including the University of the Arts and Cabrini University. “Drexel is going to face some of the same challenges. And there are going to be some financial challenges that we’re really going to have to address to make sure our revenue and cost structure is right.”

Fry declined to release Drexel’s projected fall enrollment numbers, saying it was too early because the start of the quarter is only a month away and problems with the Free Application for Federal Student Aid (FAFSA) process are still being felt.

“There are all kinds of jumps that we have never seen before,” he said.

Last school year, enrollment was 21,700 students, down 10% from 2017. While that’s a significant decline, it’s not as large a percentage drop as Temple, La Salle and some other schools have seen in recent years.

On the positive side, the university lost fewer students this summer than in previous years, and nearly 90 University of the Arts students have paid a deposit to enroll, Fry said. The school will also take in 1,200 students with the addition of Salus, he said, and the medical school’s campus in Reading is full; there are plans to open another in Atlantic City.

But with the improving economy, doctoral enrollment has declined because people find it more lucrative to enter the job market than to go back to school, Fry says.

This has partly led to a decline in Drexel’s net tuition revenue, Fry said. In 2023, it will be $610 million – $17 million less than in 2015.

Fry said he remains confident Drexel will meet its enrollment goals, but he won’t know until official numbers are available six weeks into the semester.

Enrollment is not the only reason for a budget crisis.

“Some of the cash flow problems are related to malpractice settlements that are never planned,” Fry said. “Because we were involved with Hahnemann Hospital, these are backlogged litigation cases. They haunt us to this day. … Some of these cases are over 10 years old.”

Hahnemann was the teaching hospital of the Drexel School of Medicine. It closed in 2019.

Drexel, Fry said, ended fiscal 2023 with a positive operating margin. He declined to release results for that year, saying the numbers were under audit and would not be available until October.

Fry noted that the university has weathered financial changes in the past, including the impact of the pandemic and the abrupt closure of Hahnemann, both of which resulted in financial cuts. The colleges must also cope with increased competition, a decline in the number of high school students and pressure from domestic and international events, including the October 7 Hamas attack on Israel and the subsequent military response in Gaza.

“This environment will continue to be turbulent for all universities,” Fry said.

Drexel has sought to bolster its endowment, which currently stands at more than $1 billion. Lease agreements for the Schuylkill Yards development have already added $108 million to the endowment, and another $70 million is expected, Fry said.

However, he said, “It’s not close to exceptionally well-endowed institutions like Penn, which actually insulates those institutions from a lot of what we’re talking about.”

The University of Pennsylvania’s endowment exceeds $21 billion.

Always available for a consultation

O’Brien received his bachelor’s degree in industrial engineering from Rutgers University-New Brunswick and an MBA from Drexel. He is married and has three adult children, one of whom is a graduate of Drexel and one of whom is a sophomore at Pennsylvania State University. He is an Eagles season ticket holder and grew up in Havertown and lived there most of his life before recently moving to Newtown Square.

Fry, who will leave Drexel on Sept. 30, said he will take October off before joining Temple. During that time, he said, he plans to settle into his new 18th-century home on Newtown Square and prepare it for hosting Temple guests.

However, he said he would remain available to consult with O’Brien if needed.

“My commitment and loyalty to Drexel will never end,” Fry said.