Michigan State athletics strives to strike spending balance

A pecking order exists within every team.

There are superstars, significant contributors and role players.

Undoubtedly, MSU’s superstars are football and men’s basketball. Bringing in nearly $70 million between them, these programs pay for the other 23 sports MSU offers.

So as Spartan football fights for national prominence, should more money be invested in the Big Two at the expense of other sports? It’s a question MSU athletic director Mark Hollis asks himself regularly.

“All in all, I feel pretty good where we’re at,” Hollis said. “But you’re always worried as an AD of how you can continue to keep that balancing act going.”

The pressure for the football program to win and generate revenue is both enormous and business-like, as evidenced by Hollis wrangling to add $4 million to its $19 million budget. The school’s desire to provide athletic and academic opportunities for about 750 student-athletes plays a pivotal part in MSU’s overall mission of providing a broad-based college experience.

Can those contrasting philosophies coexist?

“We genuinely get that football and basketball have to be successful for anyone else to be successful,” softball coach Jacquie Joseph said. “There’s no disconnect there — we get that. That’s just the reality of it.”

A closer look

Michigan State offers 25 Division I varsity sports, near the Big Ten average of 24.667 per university. Hollis says most sports cost the athletic department between $500,000 and $1 million annually.

The last two programs cut were men’s gymnastics in 2001 and lacrosse in 1996. The last one added was women’s rowing in 1997. Hollis says there are no plans to eliminate or add more.

“I think having a broad-based program says a lot about your university,” he said. “I’m a proponent of opportunities. I think when you look around nationally, we’re becoming too professionalized as a college industry. If for no other reason, that’s something that I want to attempt to keep in place — as many opportunities as available.”

Yet there is no question college sports have become big business.

Since 2003, MSU’s athletic department revenues have grown by more than $29.1 million as reported to the federal Office of Postsecondary Education (OPE). Over the same time, MSU’s sports-related expenses have increased by $31.3 million.

Spartan athletics brought in $79,019,535 in 2011-12, the most recent year for which data is available. The revenue comes from a variety of sources, including ticket sales, donations, merchandise licensing, Big Ten bowl games and shared conference and NCAA television revenue.

MSU spent $73,173,261 to cover costs such as coaches salaries, scholarships, travel and game-day expenses.

According to NCAA-released figures gathered by USA Today, MSU is one of 23 Division I athletic departments that turned a profit that school year. Eight of those 23 schools were in the Southeastern Conference, seven in the Big Ten.

Football factor

When it comes to prowess in college football, both competitively and economically, most point to the SEC and Big Ten as the two preeminent powers.

The SEC had nine of the NCAA’s top 20 revenue-generating athletic departments in 2011-12, according to the U.S. Department of Education’s Equity in Athletics database. MSU ranked 30th, which puts it eighth among the Big Ten’s 12 schools.

Mark Dantonio’s MSU football program, by far, provides the most money in the university’s athletic department. It generated nearly $50 milion in revenue in 2011, while spending more than $19 million. That $31 million in profit is used to fund the Spartans’ other sports.

And 2011 capped two of the most successful years in football program history, both on the field and at the bank. The Spartans won 11 games twice, played in the inaugural Big Ten Championship Game, captured a bowl victory and produced a number of current NFL players. MSU’s football revenue also reached a record high while topping $45 million both years.

“I feel that we are one of the ones that have — we’re a have, not a have-not,” Dantonio said.

However, MSU’s football revenues ranked sixth in the Big Ten and 18th nationally, behind seven SEC programs.

Alabama, under former Spartans coach Nick Saban, ranked third in the nation in football revenues for 2011-12 at $81.99 million. Fellow SEC schools Auburn, Georgia, Florida, Louisiana State and Arkansas each brought in more than $64 million to rank among the top 10. Michigan, second in the nation at $85.2 million, was the only Big Ten football program among the top 10. Ohio State ranked 12th at $58.1 million.

With less revenue from football than some of his peers, Hollis’ annual task is figuring out how to divvy up the profits and keep MSU’s other sports programs competitive.

Slicing the pie

Hollis’ budgeting challenge gets a big boost from having a men’s basketball team with a prominent national stature.

Tom Izzo’s program brought in more than $19 million while spending close to $10 million in 2011-12, a surplus of more than $9 million. Men’s basketball has generated more than $54 million beyond its costs since 2003.

The only other MSU sport that turned a profit in 2011-12, per the OPE database, was baseball ($62,772), but Hollis says that was due to Drayton McLane’s donation for the building of the new baseball stadium.

Hockey and women’s basketball each spent more than $3 million in 2011-12, making them the third- and fourth-most funded MSU sports. Combined, they generated $2.77 million in revenue to offset some of their expenses. No other sport costs more than $2 million, and none of the remaining 20 programs bring in more than $450,000 in revenue.

“If you look around the country, we have what I would argue is a top-25 football program, a top-10 basketball program, the breadth of 25 sports, a market that’s not a major metropolitan area and a (football) stadium with 75,000 seats,” Hollis said. “It sure will be difficult to find a program that kind of replicates all of those different components.”

More than wins

Most of MSU’s sports — and those at other schools, regardless of market size — don’t exist to reap millions of dollars. Hollis readily admits that. They’re usually the teams that fewer fans notice. Yet they are an integral part of MSU’s athletic department.

Hollis says he uses a sliding scale in which he grades each program. It starts with success in the classroom and includes competing for championships. But it also entails staying within budget parameters and NCAA rules.

“I’m looking at quality of life for the student-athlete,” Hollis said. “Jud (Heathcote) argued that you couldn’t bring a kid into Jenison Fieldhouse in the summer and make them go to Michigan State. We still have sports that are in those positions, from a facilities standpoint and an operational funding standpoint.

“Therefore, I evaluate them differently than perhaps a fan would. They’re looking at one focus — the output — and not what goes into it, and not the other variables that we value at Michigan State.”

Communication, continuity and cohesion according to coaches within the department are the hallmarks of Hollis’ tenure since taking over as AD in 2008.

Yes, there have been championships. Yes, there have been failures. Yet his coaches point to Hollis’ ability to juggle the desire to compete in all sports with the department’s mission of emphasizing education.

And those coaches say they appreciate that Hollis isn’t viewing their programs’ progress merely in terms of wins and losses.

“Do I think what we’re doing here is successful? If you look at where we’re falling in the Big Ten, you’d probably say no from the outside,” said swimming and diving coach Matt Gianiodis, who arrived at MSU in 1997 and has been head coach since 2004. “But Mark’s really doing a nice job in this department, and I think he understands what’s really important.”

Hollis said his conversations with coaches includes “reality checks of where we’re at.” Because as go the two superstars, so go the Spartans’ other 23 sports.

“That balancing act — there’s kind of a joke among athletic directors that you want your programs to be really good but not too good. That reaches a point where your investment into programs rises,” Hollis said.

“I think our coaches have a good understanding that we want to strive for championships and Final Fours and bowl games — but they also know where the revenue growth is,” he said.Image


Posted on July 16, 2013, in Athletics and tagged , , , , , , , . Bookmark the permalink. Leave a comment.

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