Do we have too much $$$?

Submitted by might and main on July 20th, 2012 at 8:12 AM
I'm as true Blue as you, a M fan since early childhood. I want to see our sport teams thrive, see the empire competing for the president's cup every year. But I am starting to think the empire has too much money. We're about to drop $12M on a big old sign and a really uninspiring (to me) facade/museum(?) for Bo's hall. $12M is serious money. It feels like the AD is just spending money so his fund balance doesn't get too big. If that balance got too big then it would quickly become a focal point. I'm sure the AD would accuse me of thinking small, which may be right. God knows I shouldn't be the AD. But I've got an uneasy feeling about where things seem to be heading with the empire.

Comments

Sons of Louis Elbel

July 20th, 2012 at 11:05 AM ^

Let's recall that just recently Pauper Dave was pleading poverty when it came to sending the Band to Dallas. I'm not saying we have too much $, just that a couple million for the marquee is perhaps not he best way to spend said $.

cmgoblue

July 20th, 2012 at 11:44 AM ^

Is overdue for some much needed rennovations. Schembechler hall is very 'blah'. The new rennovations will add some flare to the facade with glass on the outside, as you mentioned, but will also maintain the integrity of the rest of the building with matching brick. Also, the rennovations call for a recruiting lounge (which we don't have right now) that can really add mystique when recruits come on visits. Michigan state made similar rennovations to their memorial hall and it looks really great.

As for the marquee, it might seem useless (probably is), but I do think that it brings some new-age flare where alums and people sensitive to the tradition of Michigan football won't freak out--outside of the stadium. Plus, $2.8 million is miniscule, especially when you're working with a budget  surplus from the previous year. 

I don't think there's anything wrong with spending money to improve facilities, especially when we're improving a building that holds the history of our program and will be a mainstay for recruiting for years to come. You have to remember that the college football arms race, not unlike advertising in corporate America, is somewhat of a prisoner's dilemma. We throw money at facilities because if we don't, we know that the competition will and nobody likes to fall behind...especially the leaders and the best.

snarling wolverine

July 20th, 2012 at 12:05 PM ^

You have to remember, the AD has to pay tuition for all the student-athletes, and that expense  has been rising faster than the rate of inflation for years.  Given that, I don't think you can ever have too much money at hand.

 

WindyCityBlue

July 20th, 2012 at 12:21 PM ^

...it means the university is going to have to hire people to do the work.  This is good for the state of Michigan assuming those workers are from Michigan.  These workers will have to pay taxes (although probably too much) on these incomes which will help the state income tax base.  They will also buy stuff with the money they earn which will end up in the pockets of someone else.  And so on and so forth.

It's the theory of money velocity - how fast does money move between spend entities.  A healthy "speed limit" for this is unknown/debated, but I think a lot of economist wish it was faster these days.  The alternative is that these funds can simply be saved which will make its way to start-ups, car loans, mortgages, etc.

The point being.  It may suck that prices are being raised and pricing certain people out of going to games.  But other people are willing to pick up where you left off and in doing so will eventually benefit the construction workers, tax reciepients, local start-up, etc etc. 

Point being #2.  There is no such thing as having too much money.    

eschaton811ydau

July 20th, 2012 at 12:35 PM ^

Businesses spend their profit in one of three ways: 1) capital expenditures 2) M&A 3) dividends.

For a football program, #2 is clearly out of the question (although it would be awesome if we could buy one of our poorly performing rivals and make them a feeder program - just imagine, Little Brother could be more than a nickname).

#3 represents giving that money back to the athletic department and/or school at large, which we already do by funding the rest of the sports.

That leaves #1. Buying signs, renovating buildings, paying for top notch staff. Personally I'd rather spend more on our coaches and less on garish signs, but I see the MBA-style logic in DB's decision here.

The fourth possibility is just giving the money away to charity or whatever. I think I speak for most of us cynical folk here when I say that we won't be giving away any significant money after chasing the dollars with such vigor in the first place.

eschaton811ydau

July 20th, 2012 at 1:02 PM ^

Interesting idea, but where do you draw the line? Does "highest levels" mean top 5 or top 25? Clearly, we need to be in the same ballpark as Ohio State, but the fan in me wants to be #1. Texas is Texas, and blows everyone out of the water for revenue. But what benefit do they get from taking in more money than everybody else? Has all that money done anything to mitigate the horrendous product on the field?

eschaton811ydau

July 20th, 2012 at 1:46 PM ^

If 2011 wasn't horrendous, then they don't need to be drawing that much revenue. Relative to input(revenue), output(results) sorely disappointed.

The question I was trying to ask is: How much worse would the results have been if UT football revenue was 10% percentile instead of #1. This may be a bad example, as I'm not well informed on how the program allocates its capital.

French West Indian

July 20th, 2012 at 12:48 PM ^

I don't know the answer to that but if the athletic department is generating money in excess of what it needs then why not either 1.) lower the price of tickets or 2.) offer some of that money back to the University's general scholarship fund so that fewer students will be graduating with debt?  If we are truly rich, then there's no reason for any of our graduates to be leaving school with large education debts.

jmblue

July 20th, 2012 at 1:26 PM ^

We already do #2.  My understanding is that the athletic department pays out-of-state tuition for all scholarship athletes, regardless of where they're from.  That's an extremely unusual arrangement (most schools do the opposite - have them pay in-state tuition) and amounts to a significant subsidy to the university each year.  

BlueGoM

July 20th, 2012 at 1:22 PM ^

I don't like to see so much spent on something like football, especially when there are so many problems in the world.   However we saw what happened when the football program took a step back (for a multitude of reasons, not just RR) under RR's tenure.  Michigan fans and alums went bonkers.

So if we fall behind the joneses in athletic facilities I don't think the fan/alum base would be too happy.  So the money is spent....

 

SamirCM

July 20th, 2012 at 1:47 PM ^

This is why we couldn't have nice things for a long time. Why did we have Gerg? Cause the AD wasn't willing to pay up for a credible DC, are we seriously going to go after him for spending money to raise the Michigan brand? 

might and main

July 20th, 2012 at 1:55 PM ^

And I'm glad they renovated the Big House and Crisler.  I'm glad they've renovated other facilities too.  Meanwhile, I am raising the question of whether the revenue is coming in faster now than he knows what do with?  

If not, then great.  But if so, I'd rather see a bit less revenue coming in, if that allowed fan costs to rise somewhat slower, so that long-time loyal fans can still participate.

might and main

July 20th, 2012 at 2:50 PM ^

Show me where I ranted and raved. You can't, because I didn't. But if you too want to paint reasonable discussion as extremism, fine, but it does the Board no service.

I understand ticket prices have to rise.  I want the revenue to be high enough to support  championship programs.  I just don't want them to be so high that the AD doesn't know what to with more money than they need. 

Is that a rant? 

cheesheadwolverine

July 20th, 2012 at 4:45 PM ^

You can make a reasonable case that the entirety of d-I revenue athletics is hugely corrupting and we shouldn't participate (though I wouldt ultimately agree). But as someone else said, if you are going to do it you might as well win. I see the upside of being Chicago football, not so much the upside of just being Minnesota football.