What does football pay for at Michigan?

Submitted by Erik_in_Dayton on

This is not a rhetorical question.  Does football pay only for itself?  For itself and other sports? For brining dinosaurs back to life in an underground terrarium that will only be accessible to Michigan grads who are also Masons?  I don't know. 

Why am I asking?  Because I think it's at least reasonable to read President Schlissel's statements (discussed in a prior thread today*) as meaning he wants to dial back Michigan's emphasis on winning football games.  And I'm curious what de-emphasizing winning would mean for the school's budget.  I assume de-emphasizing winning would mean less revenue for the AD, but again, I don't know what that revenue goes to specifically. 

 

*See the "Schlissel on academics and athletics (AD search related)" thread.     

GoBlueInNYC

November 11th, 2014 at 5:38 PM ^

Of course his focus is going to be on academics, he's the president of an ACADEMIC INSTITUTION. If anything, all of his comments regarding the athletic department have been more of the "this is out of my wheel house, so I'm relying on other more knowledge people to help me" variety.

I get that having a new president, AD, and football coach all at the same time is a really unusual situation. But the football program has become so incestuous and inbred, there is a real opportunity to do some new things with it, which is desperately needed.

Erik_in_Dayton

November 11th, 2014 at 6:14 PM ^

1. I intended to be self-deprecating, not sarcastic, when I said I was okay with your definition.  That may not have come through.

2.  I think the quotes below can at least reasonably read to show an attitude toward sports that (for good or for bad) is not in line with "this isn't my wheelhouse, so I'll defer." 

 

 

“People have been saying all kinds of things about who I’m talking to about positions and this sports stuff, and they name names of people who I have no idea who they are,” Schlissel said. “I’ve really learned that this whole athletic sphere and the usual way you approach things just doesn’t work. It’s just a crazed or irrational approach that the world and the media takes to athletics decisions.
“It’s a time sink,” he added.
“We admit students who aren’t as qualified, and it’s probably the kids that we admit that can’t honestly, even with lots of help, do the amount of work and the quality of work it takes to make progression from year to year,” he said. “These past two years have gotten better, but before that, the graduation rates were terrible, with football somewhere in the 50s and 60s when our total six-year rate at the University is somewhere near 90 percent, so that’s a challenge.”

Bando Calrissian

November 11th, 2014 at 4:25 PM ^

Unless Athletics makes a donation to the general fund, which had happened a few times in recent years, all money from Athletics stays in the AD. The AD's finances have been kept separate from the general university funds since something like 1905. Yost didn't want the faculty telling him how to spend the money, basically.

laxalum

November 11th, 2014 at 3:43 PM ^

Football and basketball generate net revenue, although you could remove the basketball revenues and barely notice the hit to the overall budget.  Hockey is more or less break-even and made money in the Big Chill year because of that one game.  No other sport at Michigan makes more than it spends.

But it's not quite that simple.  Facilities are paid for mostly through donations.  Some scholarships and coaching positions are endowed.  Other revenue sources bring in a lot (BTN, donations, sponsors, etc.).

I do know that in the case of lacrosse the first few years of operating expenses were covered by donors. I know this because I'm one of them (although my check was pretty insignificant in the grand scheme of things).

LSAClassOf2000

November 11th, 2014 at 5:16 PM ^

The numbers for FY 2012-13 show department revenues of $144 million and football accounts for $82 million of it, so that couldn't be true anyway. I would imagine that thes figure are probably representative of most years in terms of relative contribution at least lately, or in other words, football is about 60% of the revenue. Interestingly, per and MLive piece on this subject that I remember, football only costs about $20 million or so to operate, so the program feeds a lot of money back into other sports. 

I think that same piece said basketball brought in about $15 million - can't remember the operating budget number though, but basketball is also profitable at Michigan. 

Drew_Silver

November 11th, 2014 at 3:53 PM ^

Todd Flanders: "Daddy, what do taxes pay for?"
Ned Flanders: "Oh, why, everything! Policemen, trees, sunshine! And let's not forget the folks who just don't feel like working, God bless 'em!"

cp4three2

November 11th, 2014 at 4:12 PM ^

That's what he said and he's right. Football pays for something fun for students to do: sports. His point is that the priority and mission of the school is academics and intellectual preparation rather than giving alumni something fun to do on Saturdays in the fall. Michigan could cancel football and its mission would be unaffected by it, which is all he's saying. He wants an Athletic Director who understands that, which is good because we hired Schlissel to continue our tradition of being one of the best universities in the world, not be Gordon Gee. The shit show at UNC has shaken a significant portion of the academy and he wants to make sure that something like that never happens at Michigan. He's right completely right to do so. He's goig to hire an AD that understands that there should be a strong academic component to our sports culture. Schlissel also strikes me as a guy who's not screwing around and is competitive. If anything, Harbaugh is a perfect choice for what he hopes to accomplish: a former coach of Stanford who criticized Michigan for not being rigorous enough who won games.

MGoCombs

November 11th, 2014 at 6:12 PM ^

I agree with your basic point (the university doesn't exist for sports), but I think you (or Schlissel) are underselling the importance of football and sports in general as a means to interact with the university. Sure, on the surface you can characterize it as just some silly or inconsequential thing people have fun with on Saturdays because in a lot of ways, that's what it is. But it's also the window into the university as a whole for a lot of alums and non-alums. Not only does it affect donations (I presume), but it affects people's overall interaction with the University. It's what brings people back for Homecomings. It's what out-of-state alums network around on Saturdays, and talk about at mixers. I just think it's more important than you're characterizing it. Athletics is a big part of what keeps people glued to the university.

cp4three2

November 11th, 2014 at 10:37 PM ^

And, don't get me wrong, I love that Michigan does it that way. I love football, I love that much of my family have had tickets for decades, I love that my future kids will experience it with me, but every other school that doesn't have football has alumni mixers and homecomings too. I went to Rice for grad school, they couldn't care less about football (and I actually wish they'd get rid of it because its a money sink). Instead, they have another tradition called Beer Bike (along with other things) that alumni participate in (though admittedly, I never attended Beer Bike so I can't be certain). My wife went to LaSalle, they have things like that too.  

 

Football has little to do with academc donations, in fact, it might even take away money. Very few people who would endow a chair in the History Department or fund a lab in the Biology Department (or whatever science people do, I'm a historian) consider sports as a factor in their decision. 

 

I agree with you in regards to non-alumni and it's the argument I make in defending colleges, at least state schools, having football programs. As the flagship university of the State of Michigan, the University of Michigan has the duty to encourage higher education in the state. I can attest to this because I experienced it, college football serves as a window into the academic and scholarly sphere for those who don't have parents who went to college. It gives people who just like the team a reason to come on campus and experience things like gigantic libraries, art, and architecture without feeling out of place. This is the biggest problem I had with Brandon making football tickets so expensive. By catering to the wealthier alumni base, he was going against one of the major missions of the university. Football is a tool to reach into homes that otherwise wouldn't think about Michigan specifically and higher education generally. 

Leatherstocking Blue

November 11th, 2014 at 4:26 PM ^

President Schlissel knows ( I think) that the de-emphasizing athletics ship has sailed. Maybe that is something he could do at Brown where they don't have a fraction of the athletic infrastructure that Michigan has - and will have.

It will be interesting to see if you can focus on academics, limit time dedicated weekly to the sport and still compete on a national level. I think a successful Michigan team, both financially and athletically, will have a mix pf players where some love football, are good at it and want an education at a great institution and others who have an eye on the facilities and coaching that will give them a shot at the NFL. Afterall, isn't that why many of us chose Michigan, to give us a better chance at succeeding after college?

goblue16

November 11th, 2014 at 4:59 PM ^

I don't want this to be taken the wrong way. I support equal sports funding for men and women however the numbers don't lie. Women's sports make less then half the money it costs to run them. There is no women sport that can sustain the rest of the womens side of the athletic department. Even without football men's sports still makes far more money and comes much closer to covering there expenses. Basketball, soccer, baseball, lacrosse all make more money from the men's side than the women's but the cost needed to run them is exactly the same

thumpinman

November 11th, 2014 at 7:05 PM ^

Number of sport for both Male and female athletes, schools are cutting back on all sports. Men's sports tend to draw enough to at least cover their expenses. Basketball, football, hockey, soccer, and baseball in particular generate revenue. However, none of the female sports come close. Since the male sports for most institutions cant support both so the universities are continuing to either cut or institute "pay for play" policies.

DarkWolverine

November 11th, 2014 at 7:00 PM ^

Thanks, Appreciate the Detail
The PSD's are a VERY big impact on this budget. If the luxury boxes and club seats had never been built, we would be in a world of hurt, budget wise. Actual tickets would need to double, or AD staff cut in half. Saving this document. With DB buyout and coaches buyout and higher costs for Harbaugh---we will be in the red for 2015.


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21-194-13

November 12th, 2014 at 1:08 AM ^

We'll be in the red either way, but tickets are gonna plummet if they keep Hoke. The only thing that could save us, is a "home run" hire. People are not gonna buy tickets if we hire someone like Schiano.

BTW-Take a listen to this season ticket holder(starts at 27:45) on the Jamie Morrris show:

http://www.stationcaster.com/download.php?file=http://cdn.stationcaster…

CriticalFan

November 11th, 2014 at 6:43 PM ^

But if the AD wants to pay for Jim Harbaugh and a G6 for Kate Upton to fly in as our new recruiting coordinator, and does it with its own budget, why does he care?

He'll sound silly saying "don't spend that BTN money on what it's for (a team worth showing on the air) do nothing with it or set it on fire"

blueday

November 11th, 2014 at 7:35 PM ^

About ticket prices and PSDs that don't realize football is the reason most other campus teams exist. Shocking. Yes prices are high. However, are they then saying end non revenue sports. I would hope most understand the facts and ramifications. Apparently not.

sadeto

November 11th, 2014 at 9:16 PM ^

Nonsense. If Michigan gave up football, other sports would still exist, just with more limited facilities and possibly scholarships. It's happened before, at Vermont and Boston. Both still have fantastic hockey teams, by the way, and occasionally good basketball teams.

bj dickey

November 11th, 2014 at 11:30 PM ^

I hear you loud and clear. On the other hand, and I've said this on a number of occasions, there are A LOT of people like me who thought the tickets were getting too expensive, add parking, gas etc. it's a big nut. Most I know, me included, accepted it because we can afford it and want to contribute to and carry on the tradition of Michigan football as a whole and personally with family and friends. But, when it becomes hard to take your kids to games or talk ro your friend in the next seat because of whatever music is playing, there's a point where it just won't become worth it anymore. I'm not there yet, I'm terms of my season tickets. But I have missed a few games I wouldn't have before. Sure, some of that comes from losing, but not as much as you might think. It needs to an enjoyable experience for me, my kids, and my friends to come to a game, and part of that for me is to hear the band play instead of Eminem, journey, whatever. There's a place for piped in music, but it was far far too extensive. I my opinion, and many of my peers, this detracted from the overall experience. So yeah, he expense gripes about psd, higher ticket prices, are directly related to other non revenue sports success and facilities. But, to answer your point, prices are not only high, but with a poor stadium experience, it's so high that some of us were asking, is this how I want to spend my Saturday?

sadeto

November 11th, 2014 at 9:38 PM ^

Two points I've tried to make in recent threads about Schlissel and the AD, to which I haven't seen anything but knee jerk responses. One, many here, including Brian, seem to take it as given that at a place like Michigan there is some sort of direct correlation between the success of the football team and the financial status of the AD. There is no evidence at all of such a relationship, in fact there is evidence that there is no direct relationship at all. The only times the AD has been in the red or on the verge in recent years coincided with relative success on the football field. And the recent period of football pain has coincided with fabulous financial health of the AD. The burden of proof is on those who suggest that Schlissel deemphasizing success would impact the bottom line. And alumni? the dough keeps rolling in.

Second, the AD budget is a fraction, less than 3%, of the university operating budget. Which doesn't include investments and certain joint ventures and unusual large donations. Tell me Schlissel should wake up in the morning worrying about whether football is going to pay for something. He's exactly right to say the undue attention it receives is a "time sink". Changes in, for example, Medicare and Medicaid reimbursements will have enormous impact on the fiscal status of the university. Football? Come on.

I think he's doing exactly what he should be doing, delegating to a competent, connected, man who will fix this mess under his guidance. Balance? Great, last time we had a president who talked about such balance we won multiple B1G championships. Not like Schlissel is messing with a recent tradition of winning, is he?

DarkWolverine

November 11th, 2014 at 10:07 PM ^

Good points all.
Considering that only 20 or so universities actually consistently run their ADs for a profit suggests that most presidents don't require ADs to be self supporting. Otherwise, there would be a lot of fired athletic directors each year. As you say, 3% is quite small. The recent decision to reduce student tickets may result in 8,000 more students(back to previous numbers). Just this one change will likely cut the 2015 profit projection in half.


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aiglick

November 11th, 2014 at 11:08 PM ^

If football is so important to the health of most other sports how do the Ivies do it since their football is not conducive to huge budgets I'd expect. It will be interesting who the new choice is for AD. There needs to be balance but I imagine we all want to be competitive in our athletics. The nice thing about Michigan is it is not quite an Ivie but a very good school and yet usually has some very good sports options. Maybe deemphasizing winning has an impact on the types of students interested in attending the University and I know we are reaching a tipping point with higher education where the institutions need every advantage they can get to draw great students. Also, I remember the Career Counseling Services attending a lecture and how they remarked that one of the reasons Michigan gets so many donations from alumni is because of the shared experiences in sporting events. Apparently we remember experiences where we're crowded and cheering together for a common good and that has us look fondly on our University experience. Just don't think it will be easy to deemphasize sports at Michigan but some of the statements are concerning me.

justingoblue

November 11th, 2014 at 11:13 PM ^

This isn't an exact answer but remember that the Ivy's don't allow athletic scholarships, so that takes a huge expense off the books of the AD and either turns it into cash for the school or a financial aid expenditure.

The Ivy's also endow head coaching positions like crazy (I believe 8/8 head football coaches are endowed), which is another way to keep expenses down.

patrickdolan

November 12th, 2014 at 7:30 AM ^

At most schools, the athletic department takes money from the academic side, usually in the form of mandatory fees. Michigan is one of a tiny number of universities that isn't diverting money from its core mission, education and research, to fund entertainment. (It always surprises students at Iowa when I show them the budgets when the AD doesn't break even and they realize their tuition subsidizes Ferentz's salary.)

The AD gives nothing to the university directly, unless you count the scholarhip tuition payments, which may or may not cover the cost of instruction.

The research is mixed on the topic, but a world-class nationally prominent educational institution like Michigan will usually have no trouble raising funds from, for example, business, law and medical school alums. AD donors, in general, with spectacular exceptions, don't give to the general fund--they may sign on for a capital initiative, but usually their money stays in the AD. (Think for a moment: what universities have the largest endowments?)

In terms of recruiting high-end academic students, especially grad students, or world class faculty, the football team means nothing at all. (An anecdote: I was recruited to play football by the Ivy League and Indiana. I decided to go to UM for academic reasons. The first time I saw the Michigan helmet was the 1970 OSU game on television. That's when I realized UM was good at football.)

Schlissel has no control over how much or how little the AD emphasizes football. All he can control is whether or not the academic side cuts corners on athletes. I don't think UM is UNC, and I don't believe that UM is worse than Stanford in this regard, Harbaugh notwithstanding.

The only thing that he can do to piss people who are fans of Michigan sports, but not the school as a whole, is take his time with the AD hire. I love Michigan football because I love the university as a whole, not the other way around.

I say let him do his job.

Feat of Clay

November 12th, 2014 at 3:00 PM ^

I've said this downthread, but I think it deserves a main-level comment.

Contrary to what has been claimed, Athletics pays $$ to the University's academic enterprise.

Athletes with full scholarships get what we call a "free ride" but it's not that the University is just waiving the tution fees.  The University still charges them--it's just that Athletics picks up the tab.   Just like if a rich uncle did.  

Now, I have seen arguments that this is not meaningul because it happens "in the system" (as opposed to athletics carrying bags of cash over Fleming, presumably) or because tuition is some arbitrary figure that may or may not cover the cost of instruction or whatever, or because athletes are just a small sliver of the student body.  That's beside the point.    The point is, the money flows from athletics to academics, not the other way around.  Tuition payments are made on the same basis as they would be for any other enrolled students at the U (that is, athletes don't get some special rate or some agreed-upon deal between the U and the AD).