What does football pay for at Michigan?
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.
November 11th, 2014 at 3:33 PM ^
November 11th, 2014 at 3:35 PM ^
November 11th, 2014 at 3:58 PM ^
Men's basketball is always profitable. TV deals are extensive. Hockey also makes a profit, though a smaller one. The rest generally lose money.
November 11th, 2014 at 4:18 PM ^
Some sports had donors set up an endowment to fund the sport. Certainly most though.
November 11th, 2014 at 3:34 PM ^
i think BBall pays its own way but them 2 pay for the rest .....
November 11th, 2014 at 3:36 PM ^
football makes up about 35% of the athletic department expenses but is responsible for 80% of the athletic department income. Infact i think the only sports football doesnt pay for is mens bball, ice hockey, baseball, and i think softball. So ya it pays for a shit ton
November 11th, 2014 at 3:37 PM ^
I thought Brandon secured independent funding for lacrosse somehow, but mabye I'm making that up.
November 11th, 2014 at 4:51 PM ^
November 11th, 2014 at 3:55 PM ^
I have also heard that softball is self-sustaining. Where there is smoke there is fire.
November 11th, 2014 at 3:58 PM ^
They do have the distinction of lowest season ticket prices at Michigan, but there's no way a northern softball program could be self sufficient unless they were selling out a much bigger stadium than Alumni Field and had a TV deal. The amount of travel is absolutely ridiculous and makes softball a pretty expensive sport to play if you're located where Michigan is and competing at the top level (which they are).
November 11th, 2014 at 4:23 PM ^
But what about softball specific donations. The softball team has quite a big following and they could have travel endowments, etc. Their revenue is not soley based on ticket sales.
November 11th, 2014 at 4:37 PM ^
I think that's much more likely to be true about the recent facility upgrades to Alumni Field than the budget for the entire program.
Michigan spent $473,982 on softball athletes in 2013 in addition to 12 scholarships (assuming all lower division in-state comes to 297,360 with an upper limit of 673,704).
Assuming I've got my arithmitic correct, softball cost between $771,342-$1,147,666 last year which would require a $10-19m endowment if the university guarantees an eight percent return.
Edit: I also completely forgot to include coaching salaries and benefits that are (I'm estimating here) in the $600-700k range, and I don't know how the accounting works but there would be additional travel expenses for trainers and managers and coaching staff at the very least.
November 11th, 2014 at 10:58 PM ^
that 8% figure is not net of inflation. I'm not going to get into the whole "inflation will be ___%" argument, but you'd really like to see a 10% return, which is the stock average (including small stocks, which are riskier) over the last 100 years. So. . . I don't do fund management, but I don't think that's a realistic goal.
In sum, I think it'd have to be an even larger sum. Yet, this is not my area of expertise, so fund managers, please amend as necessary.
November 11th, 2014 at 11:23 PM ^
the 8% guaranteed for endowments figure was something I remembered hearing from a poster that's really involved with fundraising for scholarships. I don't know if that's true all the time or if I'm confusing a few different things.
I do agree the number would have to be larger. Expenses are probably a shade north of $2m and the combined revenue of all womens sports (minus basketball) is $971k. Even if the vast majority of that is softball there's still a shortfall of something like $1.25 million when it's all said and done.
November 12th, 2014 at 8:26 AM ^
Endowment distributions are much lower than the figures you talk about. From '01-'11, the average distribution was 5.6%. (http://www.finance.umich.edu/reports/2011/cfo/) That was in a higher interest rate environment and didn't include many years post-financial crisis, where many universities lowered their distribution rate. The current distribution rate is either 4 or 4.5% if I recall correctly from my conversations with the UM CFO.
This makes sense relative to returns because you want the endowment to retain its inflation-adjusted spending power. So, the first ~2-3% of returns every year need to be reinvested in the endowment so that inflation doesn't eat away the spending power of the endowment.
EDIT: 4.5% http://www.vpcomm.umich.edu/pa/key/endow_qa.html
November 12th, 2014 at 2:43 PM ^
Very interesting/informative, thanks.
November 11th, 2014 at 4:54 PM ^
November 11th, 2014 at 3:36 PM ^
Some good info here. Donations, football/basketball/hockey tickets and PSD's, the Big Ten TV deal and the NCAA basketball tournament bring in the lions share of the revenue. Football is by far the biggest of the three revenue sports (making $82m on its own).
November 11th, 2014 at 3:47 PM ^
EDIT: There is nothing in there about the dinosaur terrarium, but I'm going to assume it's a secret.
November 11th, 2014 at 3:53 PM ^
I'm completely lost but I'm 100% behind any building of dinosaur terrariums.
November 11th, 2014 at 4:02 PM ^
I think that probably speaks well of you in this instance.
November 11th, 2014 at 3:37 PM ^
At Michigan, football, basketball, and hockey are revenue sports. That being said, hockey makes a fairly small profit, basketball a much larger one, and football a comparative mountain of cash.
November 11th, 2014 at 3:37 PM ^
November 11th, 2014 at 3:40 PM ^
I was curious about the answer either way.
November 11th, 2014 at 4:51 PM ^
With just a quick google search (not trying to give you a LMGTF - just saying you might find something more relevent with more searching), I found the following FY12 operating budget for the Athletic Department:
http://www.regents.umich.edu/meetings/06-11/2011-06-X-13.pdf
The athletic department appears to operate on its own, I see nothing in there about providing money to any other part of the University.
November 12th, 2014 at 2:33 PM ^
I think you're misled by the phrasing "Financial Aid to Students." That doesn't all go to students--some of it is a direct trannsfer to the University to pay for those students' tuition. Some of it would also go to Housing (if they live on campus). Housing is, like athletics, an auxiliary unit, so payments to Housing aren't payments to the academic side, but they are payments out of Athletics to other parts of the U.
This seems to be poorly understood by many on campus. When they hear that scholarship athletes get a "free ride" they assume the University just doesn't charge them anything. This is not true. They do charge them--and the athletic department pays.
TL/DR: Some money flows FROM athletics TO academics.
November 11th, 2014 at 5:53 PM ^
We actually don't know Schlissel's intentions, so it's not necessarily a faulty premise. Maybe he should say "If Schlissel decides to de-emphasize...etc." then we can have a discussion about it. Just because you don't think a hypothetical will happen, doesn't mean it isn't worth discussing.
November 11th, 2014 at 3:37 PM ^
Everyfuckingthing. But I might be wrong - basketball I think covers it own way so it's actually everyfuckingthing but basketball.
November 11th, 2014 at 3:38 PM ^
November 11th, 2014 at 3:38 PM ^
Those three programs are self sustaining and the rest is paid for by the football program. In addition, BBall and hockey do receive some of the benefits from the football program.
November 11th, 2014 at 3:46 PM ^
I thought recently Softball has been self-sustaing as well. I could be wrong though and nothing would be self-sustainging if it weren't for the football program paving the way.
November 11th, 2014 at 4:13 PM ^
No, that would make no sense at all. Every single ticket sold for the entire season would maybe pay for one trip down south in February (airfare, hotels, transportation, food), and that's assuming pretty big airfare/hotel discounts.
Michigan is in Tampa the weekend of February 7-8.
Michigan is in Tallahassee the weekend of February 13-15.
Michigan is in Tuscaloosa the weekend of February 20-22.
During Spring Break, February 27 to March 7, Michigan is in Tempe & Fullerton.
That's 4 round trips--2 to Florida, 1 to Alabama and 1 to the West Coast. For 25 people (20 players, 3 coaches, a couple support staff). Even if you pay a deeply discounted $300 per person per trip, which is just a WAG, that's $300K right there. Add on top of that 17 nights in hotel rooms, figure 13 rooms each night (221 total nights) plus 17x25=425 days worth of food, you have completely obliterated any money that they make from ticket sales, summer camps, donors, etc.
And I haven't even started with coaching salaries ($350K?) and equipment and field upkeep, not to mention 4 more trips in the Big Ten (OSU, Minnesota, Rutgers, Maryland) with 3-day series each.
No way does softball pay for itself.
November 11th, 2014 at 4:34 PM ^
You're assuming that ticket sales are the only revenue generated by/for the softball team, which may or may not be the case.
Are there softball-specific donations? I understand there's a decently large following. What about BTN money? I just think there may be a few other considerations. Though you're certainly right (I would think) that softball ticket sales alone do not pay for softball.
November 11th, 2014 at 5:55 PM ^
Yes - and Michigan (or at least the Big Ten) gets a cut of every game on TV, which are a lot nowadays. When ESPN or ESPNU picks up the NCAA tourney, that money gets distributed, as well as some of the bigger regular season games.
November 11th, 2014 at 3:39 PM ^
I think de-emphasizing the football program would be more damaging than people realize, it plays a big part in academic recruitment, the football team and their dedication to winning was a huge reason I chose to go to Michigan from out of state
November 11th, 2014 at 4:11 PM ^
Yeah, just look at the State University of New York system. Great academics, but nothing to speak of as a reason to be pumped about your alma mater (other than a great education at a reasonable price). It's hard to get the old gang together and plan a weekend trip to check out the new library addition. They generally frown upon tailgating at the reference desk. And it is really easy to keep the checkbook in the desk when the annual fund folks come calling.
November 11th, 2014 at 4:41 PM ^
I think UVa or UC Berkeley would be more realistic comparisons. Neither have football programs that we'd be satisfied with at Michigan, but academically they're doing more than fine.
I don't really think that Schlissel intended what people are reading into his comments, but it's not outrageous to think of a top-tier public university with a much lower emphasis on athletics.
November 11th, 2014 at 5:17 PM ^
The problem there is that both schools are traditionally bottom feeders. Since the 50s, Cal has only had three winning coaches (out of 12), and UVA only two (out of 11). Only one coach at each school during that time (Welsh and Tedford) was better than a few games over .500. When you've sucked for pretty much the entire lifetime of anyone who would be supporting the school, further sucking doesn't have as much of an impact. But to take a school like Michigan with all its tradition and success, and sink the program, it's going to have a much bigger impact. I have a strong feeling that it would take 50-75 years of acceptance of UVA/Cal level performance here to be able to say that such a drop wouldn't be accompanied by a corresponding drop in support, school wide...
tl;dr version: I think it's naïve to assume that a permanent hit to the football program wouldn't be accompanied by a similar hit to support of the school, just because schools like Cal/UVA are doing ok (and I wouldn't necessarily call Cal "ok;" CA's budget problems are taking a huge toll that donors aren't filling...)...
November 11th, 2014 at 7:06 PM ^
Having attended Michigan, Cal and ULCA, I can say I have experienced that the importance of footbal success at Michigan is much greater as you say. The odd thing to me, coming to Cal from Michigan, is how much football mattered, also at Stanford which was awful. Despite no reason to expect to win, folks would be forlorn at a loss, and ecstatic about wins. THe lesson to me was that allegience and rooting interest, having a college identity, was all that mattered.
I do think the move to less competitive football for Michigan would be traumatic, ...feeling kind of like now? But would it have long term effects? Not so sure. As an older alum now, in my 50's, the long term allegences hold despite traditions of losing. So, the same could happen for Michigan. However, probably an 'academic' arguement as the pres would find few supporters of that mission. Why would he take on a battle of lessening the imprtance of football.
Rather, I think he would be wary of playing catch-up to the SEC and instead model football like a good Stanford team or, excuse my reference, an ND type team with above average standards.
As for budget problems, I think the UC system is fine. The academics always claim budgets are too tight. They are swimming in money. The UC budget is north of $20 billion. UCLA pulls in more than $2B in grant money a year and pockets 55% as overhead. Students pay tuition for bond measures, and yes donors are filling the pot too. It is sickening how much they squeal and complain. Did you know UC profs salaries can top 300k? With a pension too. Wonder if same is true at Michigan.
November 11th, 2014 at 6:33 PM ^
Even at UAlbany (where I graduated from), where football is now D1 and has been for several years, they still give lots of tickets to the games away for nothing or next-to-nothing. Basketball is getting more prominent, but still, yeah....
Great education at a great price though.
November 11th, 2014 at 4:19 PM ^
November 11th, 2014 at 4:39 PM ^
People are still going to come to Michigan even if the football program went for a toss. I for one didn't know about American football at all. Michigan has high academic standards and will remain that way. EDIT: I replied to the wrong person. Thread above!
November 11th, 2014 at 4:58 PM ^
Yes, "Michigan has high academic standards and will remain that way." I agree. But why should that mean we give up on having a good football team?
I think most people have it backwards. Yes, Michigan academics are the most important thing. But why does that mean the football team must scale back? Is the football team taking money out of professors or students' pockets? Does having a strong football program destroy Michigan's academic ranking?
Actually, no. Football has--at least in the past--generated a lot of revenue which supports other student athletes, coaches, AD personnel, etc. And it does not seem to have held back Michigan's acadmics, which generally place it among the top few public institutions in the nation.
Pay up and get a damn good football coach; pay up and get his preferred coordinators, too--it's not going to hurt Michigan's acadmic standing!
November 11th, 2014 at 5:58 PM ^
I'd argue that football's success has impacted much more than just athletics. To think, especially in the middle of a huge capital campaign, that donors would be ok with de-emphasising football is insane. Strong performance in public things like football are what have helped drive Michigan to having one of the largest endowments in the world. We make fun of Gee's comment re Tressel, and rightly so, but it is founded in some truth. For schools with football programs like Michigan's (similar to basketball at UK, KU, Dook, etc.), the value of the football program to the university is much greater than just the sum of it's parts, like the revenue brought into the AD. I'm holding out hope that Schlissel knows this (or is smart enough to figure it out), and realizes that actions like some have speculated would sevely piss off a large segment of the donor population and put him on the fast track out the door. Especially for a program that's completely self sufficient (and directly supports so much else), it seems like suicide. U Chicago could get away with gutting for the sake of academics football back in the 30s; if a school of that caliber tried that today, no way it wouldn't backfire.
November 11th, 2014 at 3:40 PM ^
Indirectly, lots of other things. Winning football teams = happy alums, happy alums = more cash in the overall University coffers.
Makes this "sports stuff" stuff all the more confounding.
November 11th, 2014 at 3:42 PM ^
I really hope Schlissel understands what you're saying.
Sports and academics can be competitors, but they can be really good friends too. And I think the competition is often more symbolic than substantive.
November 11th, 2014 at 3:46 PM ^
November 11th, 2014 at 3:48 PM ^
But intelligence doesn't prevent you from being an ideologue (which he may or may not be).
November 11th, 2014 at 4:50 PM ^
"...doesn't prevent [him] from being an ideologue (which he may or may not be)." Otherwise known as, "I don't have any evidence of my position, but I'm paranoid anyways."
November 11th, 2014 at 5:18 PM ^
...I'm okay with your definition.