There Is No Jerryworld Pot Of Gold Comment Count

Brian April 23rd, 2012 at 9:02 AM

l081013_jonas[1]dave-brandon-press-conference[1]

Dave Brandon, Jerry Jones, and two weird old guys. Unless I've got that wrong.

A lot of people are pretty mad that Michigan's band is not going to Alabama. So many people are mad that there is a backlash against the mad people. The strength of the reaction is a combination of a number of things, amongst them the sudden reversal, how bush-league we look in comparison to Alabama, and the growing feeling that maybe this wasn't such a coup after all.

Remember back when this thing was scheduled and we were assured that the take from this was going to be epic? Back then, I thought it was a good idea because it seemed impossible for Michigan to schedule a real nonconference opponent in any other way. This came paired with rending of garments about that fact, how college football is broken, etc., but the fact remained that 2012 would be the first season in a long time in which two nonconference games would be against truly interesting opponents. It was the only way.

That assumption has steadily eroded as we find out more and more details and observe Big Ten scheduling trends in general. The conference announced a scheduling alliance with the Pac-12 that will force every league member to undertake regular home-and-home matchups against comparable opponents, no neutral site funny stuff (or at least not much). Michigan State jumped the gun on that agreement to schedule Oregon to a home-and-home. The year after that series finishes, the Spartans will take on Alabama in a home-and-home, in years when they also play Notre Dame. It can be done. Michigan just didn't do it.

As for our Alabama game, Michigan's announced take, $4.7 million, is so low it seems impossible it's correct. If that's all Michigan's getting from the game that's at best equivalent to playing a body-bag game at Michigan Stadium. Assuming random one-off opponent cost a million bucks, Michigan would match 4.7 million in gate receipts alone by charging an average of 52 bucks a ticket.

Michigan's 2011 budget shows $41.3 million for last year's eight-game home season in pure ticket costs minus guarantees, $8.7 million in PSDs, and $13 million in premium seating donations. Everything included, the average price paid for a seat at a Michigan game last year was about 72 dollars. Without all the donations, it was $49 last year; ticket prices increased by an average of $4.64 this year. $4.7 million is about 300k less than they'd get from a home game on ticket face value alone.

Add in Michigan's expenses for getting down to Dallas and the ancillary benefits of having a home game (parking and concessions seem to be around 300k per game and there would be some level of increased donations required to get a season ticket) and either $4.7 million is undershooting it by a lot or Dave Brandon sold a home game to Dallas for no financial benefit whatsoever. Meanwhile, tickets for Dallas start at $125. At that price Michigan could easily afford a home and home with a high-quality opponent.

Surely this can't be right. Dave Brandon didn't send Michigan down to Dallas for no reason whatsoever, right? My previous belief was that there was something we were missing in the numbers. But the sudden about-face about the band—and it was an about face given the contract and the conspicuous "Michigan band" sections on seating charts—suggests that the financial picture could be as grim as that: $400k is a significant chunk when you're already getting hosed backwards and forwards.

I finally took a close look at the contract. We are getting hosed backwards and forwards. Check it:

CSLP will … pay $4,700,000 to Michigan. The team acknowledges that the Team Guarantee constitutes the sole financial compensation for the Team for playing the Game, and that no other compensation will be due or owed to the Team under this Agreement in connection with the Game. … The parties acknowledge that the Team may be entitled to compensation from its conference related to broadcast of the game. CSLP … will … retain all other revenues from the game. CSLP and ESPN acknowledge and agree that (a) all rights to telecast of distribute the programs of the Games have been assigned by Michigan to the Big Ten (b) Michigan has no ability to grant to ESPN any rights for telecast or distribution of Games played pursuant to this agreement and c) as between Michigan and ESPN, ESPN is responsible for obtaining such rights from the Big Ten. Notwithstanding the forgoing, if ESPN has the broadcast rights [they can get a title sponsor, etc.]

The TV point is important: my Big Theory for why this makes sense is that the teams would get the TV rights to themselves because the game is outside of their conference footprints. That's not the case. The money Michigan gets from television will be split twelve ways—every extra dollar they make for playing a big time opponent also goes to OSU.

Michigan gets a couple hundred tickets, a couple suites, seating for the band, a field-level "party suite" and right to purchase 500 tickets near it, and 100 parking passes. Cheerleaders get in free. They get one "official retailer" in the stadium that CSLP takes a 22% of the gross of. So that's nothing. An addendum makes it clear that "hotel rooms, and other costs of transportation and lodging, shall be at the cost and expense of the individual institutions." Even the police escorts are at the respective teams' expense.

The only thing that could possibly redeem this is if the Michigan got the revenue from the uber-expensive tickets, but the contract makes it clear they don't:

CSLP shall also provide a minimum of 25,000 tickets for Michgian to re-sell to its fans as specified on the stadium map as an addendum to this document.

Michigan got no more money than they would for an average regular season game and is charging their fans 60% more (at a minimum!) to attend it. There is no way to read the contract other than this: Dave Brandon got ripped off.

So when Dave Ablauf tells AnnArbor.com that they're treating Dallas like "any other road game," it's because they have to. This supposed financial windfall simply does not exist. At best it's a break-even proposition even without the band. They will probably make more against Air Force the next week. Michigan gets a "bowl game experience" in an NFL stadium without its band at "neutral site" Michigan is twice as far away from as Alabama. Meanwhile, Mark Hollis gets Alabama at home. Michigan got owned by Mark "people u is" Hollis.

You can consider the future created, yo.

BONUS: I hope this came from Brandon.

MT @sbell021 Game announced 2 months before Hoke hire. RT @schadjoe Brandon asked Hoke if he'd like to play Alabama and Hoke said "Why not?"

Comments

g_reaper3

April 23rd, 2012 at 9:22 AM ^

His background is marketing.  From my experience, marketing guys aren't very financially savvy.  Even as a CEO, he probably leaned on his CFO and had oversight from the private equity firm that owned Dominos. 

GoBlueInNYC

April 23rd, 2012 at 10:44 AM ^

What if the value being added is the exposure? Being a marketing guy, what if he knowingly took less money than a home-and-home in exchange for greater attention?

I'm not saying this is actually the case, but there is definitely a line of thinking that would say an opening weekend game between two (possibly) top ten teams at Jerry World is a major, prime time event that a home-and-home series isn't. It could very well be that Brandon isn't getting hosed, just that he's choosing to take a smaller profit in exchange for increased exposure.

coastal blue

April 23rd, 2012 at 11:01 AM ^

really bring more exposure than a home and home? Perhaps its bigger than one of the game's individually, but this is Michigan-Alabam we're talking about...

Wouldn't Michigan-Alabama be the main focus for two seasons rather than one? And if the first game was a classic, wouldn't the second then become even bigger?

Doesn't fly. 

GoBlueInNYC

April 23rd, 2012 at 11:45 AM ^

I'm not saying that that line of thinking is actually right. Just offering an explanation that could be behind Brandon's logic when he set this up. As Brian says above, this is supposed to be creating a "bowl game experience." Assuming high pre-season rankings for both UM and Bama, it's basically creating the equivalent of a BCS bowl to open the season.

Don't get me wrong, I'd much prefer a home-and-home, but from a marketing standpoint, someone like Brandon may view this set-up as more of a national "event" than a home-and-home series would be.

wile_e8

April 23rd, 2012 at 12:43 PM ^

I think the problem with this is that if you are going to knowingly take less money to create a bowl experience, then create the bowl experience. Don't cheap out and call it a normal road game once it turns out creating the bowl experience is expensive, which is something that should have been known prior to signing the contract.

STW P. Brabbs

April 23rd, 2012 at 1:05 PM ^

Here's the problem: even if Brandon is only thinking with his marketing dinosaur brain, if the only variable he can consider is 'exposure,' he's a complete moron. 

For something like Michigan's football program, exposure alone is a really shortsighted goal.  Fans know who we are.  Recruits know who we are.  Obviously we haven't reached total saturation, but it isn't as though we're in the same tier as Michigan State, Boise State, etc. in terms of national recognition. 

So the quality of that exposure - yes, the branding - is at least as important to consider, IME.  And if Brandon thinks that he's doing Michigan football a favor by associating it with sterile NFL stadiums and making it appear ramshackle by not being able to afford sending the band, he's terribly confused.  We are never going to be Pete Carroll USC, Urban Meyer Flordia, or Saban 'Bama.  And that's fine.  Our brand is based upon tradition, even a certain degree of stodginess.  And the Jerryworld experiment is weakening that image.

Think about all the recruits that Hoke has been getting for the past couple of cycles - how many times have you heard these kids talk about Michigan's tradition?  How many kids on visits have been wowed by the Big House and have talked about all the legends that have come through Schembechler Hall?  My hunch - though I'm sure this is unfounded, and biased by all kinds of homerism - is that we'd probably rather have recruits like this than kids who are going to USC for the LA scene or Oregon for the uniforms.  And it's clear that we don't need any more exposure than we already have to reel in top recruits. 

Without a financial windfall, this whole experiment makes no fucking sense, except in this regard:  Dave Brandon wants to do things that get Dave Brandon noticed for his visionary, creative, aggressive leadership of the athletic department.   Dave Brandon probably thought to himself, 'any asshole can schedule a home-and-home, but how many teams are playing in the State of the Art Football Experience that Jerry Built?' 

This is an ego trip for Brandon, and a result of his MBA dinosaur brain leading him to innovate at all costs, even when that innovation is either useless or even damaging to Michigan football. 

Blue in Yarmouth

April 24th, 2012 at 9:11 AM ^

"Without a financial windfall, this whole experiment makes no fucking sense, except in this regard:  Dave Brandon wants to do things that get Dave Brandon noticed for his visionary, creative, aggressive leadership of the athletic department.   Dave Brandon probably thought to himself, 'any asshole can schedule a home-and-home, but how many teams are playing in the State of the Art Football Experience that Jerry Built?' "

IMHE DB has shown from the time he stepped on campus as the AD that he loves the attention and "getting noticed". This has laways been my biggest issue with the guy and this particular example on further proves he is the attention whore I always thought he was.

I'm not saying the guy has never made a decent decision since coming here, but his desire to be in the spotlight couple with his condescending approach to almost every direct interaction with fans drives me absolutely crazy. 

Hannibal.

April 23rd, 2012 at 3:11 PM ^

You'd get a lot more exposure having Gameday on the Michigan campus with the Michigan band attending than you will at an NFL field.  The campus gameday atmosphere is a huge part of the appeal of college football.  Not-to-mention, you could charge through the roof for that season ticket package and get gobs of extra alumni donations. 

There is no improved brand name exposure here.  This is a money grab by an airhead who lacks quantitiative and logical skills.  So it's the worst kind of money grab -- one that doesn't actually make money.

profitgoblue

April 23rd, 2012 at 11:14 AM ^

BUT the whole argument for making sure the band makes the trip is to strengthen the Michigan brand in front of an audience that might otherwise never know the greatness that is Michigan football.  In other words, did Brandon slap himself with his own Pimp Hand?

BJNavarre

April 23rd, 2012 at 9:25 AM ^

I have not crunched the numbers, but a fair analysis would assume that Bama would expect $4.7 million for playing at Michigan (and vice versa). I may not have read Brian's analysis closely enough, but I do not think he took this into account.

Still think it Brandon could have made a home and home work. Just trying to improve the analysis.

wolverinestuckinEL

April 23rd, 2012 at 10:03 AM ^

No, they would expect the return home game.  So bascically by scheduling a high quality opponent to a home and home you give up the ability to schedule another home game the year you make the return visit.  Maybe MSU had to pay Alabama to get them to agree to the series, but I doubt it.  State/Boise State is a different story, MSU could end up buying their way out of that return visit.  There is probably a $$ amount written into that cotract for breach, somewhere in the neighborhood of $2 million?

BobbyRizigliana

April 23rd, 2012 at 9:32 AM ^

I think Brandon would not blink at the financials of this and would just talk about the "marketing" this creates.  Jerry Jones is trying to create a CFB "opening day" and Michigan and Alabama are both buying.  Brandon (and Jones) would argue a home and home won't create as much excitement.  I disagree.

Marketing people do not understand or care about NPV.  This is purely about marking the Michigan brand in a way that Brandon does not think a home and home would allow.

The bigger point that Brian highlights is at the end.  I saw this tweet from Joe Schad and thought about the Michigan-OSU end of year quote from Brandon.  If Brandon did indeed say that to Joe Schad, it is a complete lie and potentially the 2nd or 3rd time Brandon just flat out lied to us.  That's a big issue to me.

State Street

April 23rd, 2012 at 9:37 AM ^

Re: your last point, I think you (and Joe Schad for that matter) probably took this quote out of context.

For example, if while Brandon was interviewing Hoke for the job, he could have asked "Do you want to play Alabama?" 

Hoke: "Why not?"

Makes sense in that context.

In a similar vein, Schad is often wrong and/or confusing and/or flat out oblivious, so there's that.

PatrickBateman

April 23rd, 2012 at 9:35 AM ^

This is just embarassing really.  This is MICHIGAN, not Kent State, we shouldn't be getting the short end of the stick in an college football related deal.  Brandon has gone from hero to zero within the past month or so in my book.  The Arby's sponsorship ON THE ******** JERSEYS for the Big Chill, followed by the hashtag on the field, the threat of a mascot, the band not going to Dallas, and now this financial snafu. 

MillerTime

April 23rd, 2012 at 9:36 AM ^

Nothing like some ice cold venom to get the week going.  Can't say I disagree, though.  It'll enhance the "brand" to be playing in such a marquee game, but the game would probably be just as notable on the national landscape if it was played in Tuscaloosa or Ann Arbor.  It seems like the Jerryworld location and "Opening Day" nature of the game is the only "value add" that might be worth taking a haircut on.  Difficult to quantify such value, but it does seem like we are getting screwed...

R Kelly

April 23rd, 2012 at 9:36 AM ^

Just because the game was already announced doesn't mean that Hoke and Brandon didn't have that conversation.  That quote could be taken in a whole different context than it is being used here.

Silly Goose

April 23rd, 2012 at 9:39 AM ^

To be fair, this game is receiving more hype than last years LSU-Oregon game, which in turn was far more hyped than the home and home with PSU and Alabama. While we lose money compared to 1 home game, ESPN has been and will continue to gush over this matchup for the next 5 months.

MI Expat NY

April 23rd, 2012 at 10:13 AM ^

I think you're more attuned to the hype as a Michigan fan.  I can't say I see a noticable difference between last year's game and this year's game, at this point in the pre-season.  Also, there really isn't a second big non-conference matchup this season.  Last year, in addition to LSU-Oregon, you had a week three matchup of top 10 teams, #1 Oklahoma v. #6 FSU.  

I also think it's folly to think that, with so few interesting non-conference matchups, the game wouldn't be just as hyped if it was being played in Ann Arbor or Tuscaloosa.  Alabama-PSU isn't a great comparison as they were barely a top 25 team last year, and the year before the game did get a ton of hype even though most thought it would be an Alabama bloodbath.

Ziff72

April 23rd, 2012 at 9:41 AM ^

I just don't get it.   I think Brian has made this point before, but I think it warrants repeating.

If you have an Alabama coming to Michigan you make that game a premium game and jack the ticket prices high enough that you make a boatload of jack so that the next year when you lose the home game because  you travel to Alabma it works out.   Maybe I'm misreading the fan base, but I think Alabama at close to double the cost would still sell out.   The million you don't have to pay to Central Michigan is your profit on the deal.

Advantages

UM players get to play in big national game-check

UM makes money-check

UM fans get  better entertainment-check

Disadvantages

UM adds risk to MNC chances

Fans pay extra $50

 

Does anybody think this is a bad idea?  An extra $50 to see a top 10 team instead of UMass during the even years when the only "big" home game is MSU is the right play for the season ticket holders.

 

CincyBlue

April 23rd, 2012 at 9:43 AM ^

Didn't he steal MDen's contract a few years ago, then to default on it, just a year later?

Now this? 

Something doesn't sound right about these two deals.   To be fair, I believe Sailboat Bill did the clothing deal.

Lionsfan

April 23rd, 2012 at 9:46 AM ^

Hey I don't know if anyone has noticed this. But a link in the first paragraph for the MSU games aren't working. The jumped the gun link, just takes you to the Texas Rivals page where they're talking about basketball recruiting

MGoJoe

April 23rd, 2012 at 9:46 AM ^

WHAT!?!?! Brandon scheduled a game with no financial benefit whatsoever? I thought he was supposed to be all about the benjamins baby? I thought he was the corporate master who only thought about the dollar signs? He made a decision that wasn't based on money? This is surely not the Brandon we know, right? RIGHT???

Hannibal.

April 23rd, 2012 at 10:26 AM ^

The problem with this deal is that it isn't a good investment in the brand name either, when we could have done a home-at-home instead.  However, conventional wisdom at the time this deal was made was that the money was so huge that it was worth that little bit of sacrifice.  Turns out, that wasn't true. 

Mr. Robot

April 23rd, 2012 at 9:49 AM ^

But is does not change the fact that as an athletic department we still turn a profit, and even if it means making a little less this year, we should not be embarassing ourselves and doing a disservice to the team by not sending our band to a game as big as this.

MznbluePA

April 23rd, 2012 at 9:52 AM ^

I think all of the benefits  of this game would happen if we played a home-and-home series with Alabama.  Call it THE start of the football season, just like in Dallas.  ESPN would gush, Gameday would come, ticket prices could increase, AND we could hear the band.  Two years in a row!

The bloom is off Dave Brandon.  What is he thinking?

 

Anthony the Darter Carter!  The Human Torpedo!