College Football Profits Are Up: UofM #4
According to today's CNNMoney article big schools are making more money off of football than in past years and the University of Michigan is the 4th most profitable football team.
#1 Texas
#2 Georgia
#3 Penn State
#4 Michigan
#5 Florida
The following top 5 actually say according to the 2009-2010 school year, but the article seems to be focusing on the 2010 season.
December 29th, 2010 at 10:00 AM ^
good to not see tOSU on there
December 29th, 2010 at 10:14 AM ^
memorabilia market.
December 29th, 2010 at 10:17 AM ^
They forgot to put reserve prices up for the memorabilia on eBay.
December 29th, 2010 at 10:24 AM ^
Memorobilia profits go straight through to the players, with a little cut off the top for some sweet tats. They're excluded from this analysis justly, as they are not Athletic Department revenues.
December 29th, 2010 at 10:28 AM ^
December 29th, 2010 at 10:36 AM ^
that UM is in the top five. That is another category that I can put us in.
December 29th, 2010 at 10:49 AM ^
Why is Penn State outgrossing us by more than seven million?
Similar stadiums, PA isn't that much bigger, and most importantly, revenue sharing in the same conference. What am I missing here? Is their series with Alabama worth that much more this year than ours with Notre Dame?
December 29th, 2010 at 11:04 AM ^
It is profit not gross revenue. They probably don't have as many expenses or liabilities as we do. Recruiting in Florida costs money :)
December 29th, 2010 at 11:13 AM ^
Worthwhile money definitely.
But it's revenue where we lag behind PSU. I can understand differences in spending that would bring down net profit. But shouldn't our gross be nearly identical to PSU?
PSU
Revenue- 70,208,584/ Profit- 50,427,685
M
Revenue- 63,419,187/ Profit- 44,861,184
Edit- And shouldn't OSU be just behind M and PSU, just because of stadium size differences? Obviously there's a lot going into this that I'm not getting.
December 29th, 2010 at 11:20 AM ^
December 29th, 2010 at 11:23 AM ^
Yea it was 2009-10. It's amazing how much those seats earn.
I think I've heard a home game grosses somewhere in the 4.5 million range, it's amazing that those boxes are equivalent to more than another home game.
December 29th, 2010 at 11:16 AM ^
Revenue is also significantly higher. There could be several reasons, but I'd be willing to bet the primary reason is some difference in the schools' accounting processes.
December 29th, 2010 at 11:19 AM ^
I hate Penn State
December 29th, 2010 at 11:23 AM ^
I wonder if it has to do with marketing. I havent been at Happy Valley but I wonder if there is more marketing in those other schools then at Michigan (i.e. billboards and advertising in the stadium).
December 29th, 2010 at 11:46 AM ^
This could play a big role, but I've never been to Beaver Stadium so I don't know how much they advertise, if at all. But I'm sure you could bring in at least a few million advertising 7-8 times a year in front of 100k people.
December 29th, 2010 at 11:24 AM ^
Last season Beaver Stadium was bigger...
and we had 7 home games instead of 8. How many did PSU have?
Don't we pay our coaches more as well? Does that factor into it?
And PSU'ers are buying merchanidse because they love thier coach...and Michigan...umm...not so much lol
December 29th, 2010 at 11:27 AM ^
Last season Beaver Stadium was bigger, but we still led the NCAA in attendance, so that wouldn't explain it. If we paid our coached more, that would reflect in the profit column, but not revenue.
As for your merchandise comment, I'm sure that's not the case.
December 29th, 2010 at 11:37 AM ^
says the non accounting major, lol...
both schools still spend about $20M. It would be interesting to see where the disparity is, because we do have a larger stadium and a larger merchandising contract.
What about the bowl game from last year? That counts toward revenues right? and we haven't had that extra money in a couple years.
I guess in the end, it's no different than trying to figure out why one person has more billions than another. We are still close enough to the top...and to do so after the 3 seasons we have had speaks a lot about the national relevance, and the strong alumni and fan base that the school has.
December 29th, 2010 at 12:45 PM ^
Texas is in a category all their own. The sub par season on the field this year should be short lived with that kind of dominance in finances.
December 29th, 2010 at 2:42 PM ^
The numbers in the CNN/Money article reflect only revenues and expenses directly attributed to the football program. This is very misleading because many general overhead expenses that support football along with all other AD activities are not allocated to any sport. That is why the profit numbers are ridiculously high.
The table below shows total athletic department revenues and expenses for the top 10 revenue schools and all other schools in the B10+ND. UM comes in at #6 in total revenues and #4 in total net profit. Also, the B10 appears to be in very good financial shape, with eight of its twelve schools in the top 25 (based on revenues) and all but two (MN and NW) profitable.
| Athletic Department Revenues and Expenses | ||||
| 2009-2010 School Year | ||||
| ($ in millions) | ||||
| Revenues | Expenses | Net Profit | ||
| 1 | Texas | $143.6 | $114.0 | $29.6 |
| 2 | Alabama | 129.3 | 85.3 | 44.0 |
| 3 | Ohio State | 123.2 | 104.9 | 18.2 |
| 4 | Florida | 116.5 | 105.2 | 11.3 |
| 5 | Louisiana State | 109.9 | 102.3 | 7.7 |
| 6 | Michigan | 106.7 | 82.1 | 24.5 |
| 7 | Penn State | 106.6 | 80.3 | 26.4 |
| 8 | Tennessee | 100.7 | 96.7 | 4.1 |
| 9 | Oklahoma | 98.7 | 88.5 | 10.1 |
| 10 | Wisconsin | 93.9 | 90.1 | 3.8 |
| 12 | Notre Dame | 90.9 | 75.9 | 15.0 |
| 13 | Iowa | 88.5 | 74.2 | 14.3 |
| 17 | Michigan State | 80.1 | 61.6 | 18.5 |
| 24 | Minnesota | 73.6 | 73.6 | - |
| 25 | Nebraska | 73.5 | 68.5 | 5.0 |
| 29 | Indiana | 68.8 | 61.7 | 7.0 |
| 38 | Purdue | 61.5 | 58.2 | 3.3 |
| 49 | Illinois | 53.5 | 51.8 | 1.7 |
| 59 | Northwestern | 48.9 | 48.9 | - |
| Source: Equity in Athletics (Dept. of Education) | ||||
December 29th, 2010 at 3:26 PM ^
I was really confused by the lack of tOSU, and this explains why.
My only question: our goal isn't to be profitable, it is to be successful. Should we be spending more of the profit to improve our teams? Or is this profit going to current Basketball Infrastructure improvements?
December 29th, 2010 at 4:55 PM ^
During the decade prior to Bill Martin's tenure, we had minimal profit and even ran a deficit some years due to less than optimal financial management. Bill Martin did a fantastic job of getting us back to strong profitability and raising money for facilities upgrades.
Some of the current profits likely will be used to fund the new basketball player development center and pay for other announced facilities upgrades (e.g., Yost renovation, new video boards for the Big House, Crisler renovation). Also, it is likely we will be moving up to Division 1 in men's and women's lax in the next 2-3 years, which will add some expenses to the annual operating budget. I expect any remaining profit will be held in reserve for contingencies or used to accelerate repayment of borrowings incurred as part of the recent Big House renovation.
December 29th, 2010 at 4:34 PM ^
Shareholder party! Champagne and gold pants for everybody!
December 29th, 2010 at 4:51 PM ^
Moved.