Tuesday, April 19, 2016

Financial Swamp: USA Today Database on Athletic Spending

Earlier this week, the USA Today released its athletic spending database, allowing for a wide variety of analysis and comparisons.  As always, the story for the MAC is not good and even a little bit disturbing, maybe for what it is and maybe because it is nothing new.  Hustle Belt has broken the thing down and I'd recommend popping over there for a read and then coming back here for a discussion.

OK, a few hard facts.
  • No MAC athletic department breaks even, or even comes close.  Those tickets, sponsorships, suites, parking fees...none even come close to covering the expenses of an athletics program.
  • In an era of skyrocketing college debt, MAC Athletics only survive because of student fees...ranging as high as 80% of total expenses at EMU and as "low" as 57% at UT.
  • The highest revenue in the MAC is WMU at $34M.  Alabama had $148M,
  • The lowest revenue in the MAC...BG at $21.

In fact, the numbers for BG are interesting.  With football championships in 2 of the last 3 years and supporting a hockey program, BG has the lowest revenues and expenses in the MAC.  BG spent $21M in the year in question.  The difference is significant...Akron spent $34M as the top spender, 62% more than the Falcons spend.

In a related matter, BG is second lowest in student subsidy by percentage, at 59%, and lowest in total student subsidy at 12.9M.  Which means that the student body at BG is collectively keeping $14M more than the EMU student body.

Even with BG's frugal ways, nearly 60% of athletics revenues come from student subsidies.  It is an astounding figure.

BG's strategic plan has aggressive goals for ticket increases, sponsorship increases and donations.  I support this entirely.  To the fullest extent possible, you'd want the people who enjoy athletics to pay for them.  Even with that, you can't help but think that maybe this whole thing is unsustainable, that its going to topple over from its own weight.  In fact, I'm surprised that given the debt crisis among college students, there hasn't been a move to curb student subsidies.  Perhaps...as much as it is...it isn't enough to be worth the fight.

As readers are aware, I love my Falcons and I love the University.  I stand by what I said in the article on the strategic plan...I see big changes coming.  


Anonymous said...

A couple things to think about. BG is centrally located (much more so than Buffalo, NIU, and others). That has to help keep travel costs low. Football doesn't need to make one flight in MAC play and is one of the few programs in the MAC that can say that outside of Toledo and EMU. Does that make up for $10mil difference in expenses? Probably not, but it's a big chunk. And BG probably makes up the gap in some other areas as well (lower cost of living than the "big" cities).

Also, BG's revenue is last in the MAC, but only when the revenue includes University support. BG's revenue minus subsidy from the University is about $9mil, which is right in line with the rest of the conference. Athletics seems to be doing there part in generating revenue (at least compared to the rest of the conference) but the University support is not there. The University gives athletics about $13mil, while five schools all get well over $20mil. And two of the most supported in the MAC, Miami and WMU are the two other hockey playing schools.

Of course, BG is probably one of the smallest schools in the MAC so I'm not sure how much the University can actually afford to give to athletics. In all, I think it's a balanced approach that seems to be paying dividends in the higher profile sports (like football and hockey) while causing the lower profile sports to struggle a lot.

GoBG said...

If students didn't approve of paying subsidies then why are they? Why are they enrolling at schools like EMU that have them? It's not nearly the issue that the complainers make it out to be. College sports isn't just "sustainable"; it's thriving now more than ever. The only people who dislike it are national media writers searching more a provocative story angle. They can keep crying if they mute their outrage long enough to let us fans watch the games, teams and schools we love.

NWLB said...

College sports surviving, or thriving, under the current model and structure is not sustainable. Idaho is dropping down a division. EMU was already preparing to make the case for cutting football when the HBO special hit this week and likely now has the political cover to do so. Even BGSU's president has made it implicitly clear that the center will not hold at BGSU unless it succeeds in meaningfully boosting the bottom line in sports-and I differ greatly as to the chances of that actually happening with some.

The storm clouds are gathering quickly, the damnable part of all this is the waiting for the P5 to declare their intentions. If the P5 splits entirely, and mercifully permanently close the door on the rest of college football crawling behind them, then those left behind can reset expectations and build from scratch. That can make a huge difference in determining how much money has to be raised, what the bottom line really is, etc.

EMU is the bottom of the heap, we know this. Yet even a UT, which has a modest winning record, the lowest MAC budget, and a big city around it, struggles financially. Oh, the local paper can talk about having sponsored suites full every year, but if that were such a really big deal, how is it their revenue and expenses are worse than BGSU's objectively speaking? It is because they aren't actually doing "that" much better despite so many alleged "advantages." And with UT's declining enrollment, financial mismanagement, stagnating donor, alumni, and other support, they are at risk as a school to say nothing of sports. Then you get the Akron and BSU's spending way more money and with only marginally better results. A lot of state legislatures, people trying to pay for college, etc, are going to have issues if they are a $1,000 or so short for books or rent and that happens to be what they pay for athletics.

There are a lot of people in administrations across the country that I think would welcome a true break with the P5 and a large scale down-sizing of what they have to pay for football specifically. And I don't mean just dropping to the 60s in grants-in-aid, but maybe lower than that. Because nobody wants to create another world where coaches continue to demand insane salaries to do their jobs, or see the same mess evolve again from the mess that is left behind.

But again, we can't plan until the P5 acts.

For BGSU, it isn't like we can expect to generate $150,000,000 to endow 500 grants-in-aid. I think too that too much pussy-footing will take place, new AD not withstanding, and nobody will want to call-out openly what is at risk at BGSU until we have to enter a crisis mode after it is too late.

Yet I think we seriously need to engage this issue NOW, not five years from now, not even until after the P5 makes their move.

We need to not pussy-foot around the issue of students supporting their fees paying for athletics. They've never marched on the presidents office in history demanding that change, even when faculty have agitated and pushed some to do just that. We need to have a plan to make things sustainable at BGSU so what of their fees is spent is well spent and eventually replaced or at least reduced. Leave the topic alone out of fear of talking about it and you leave a smoldering issue that can and will jump up to bite you.

NWLB said...

We need to be frank when we say that most BGSU alumni alive today were not and are not especially big Falcon sports fans. In many cases those who are supportive are at best marginally supportive. Thus, we have to redefine what being a BGSU Fan actually is. From recruiting to graduation and beyond, sports should be more seamlessly woven into a collective fibre of being a BGSU Fan. Records, divisions, that shouldn't be the lead, supporting BGSU in all things, and thus also in sports, should be the thing. This wouldn't mean beating people over the head with sports as much as building support by raising awareness through a "slow boil." Bring things to the point where you cheer an art exhibit or alumni on TV as seamlessly as a football win or hockey title. That would require a total university effort, which brings us to another ongoing issue: the University as a whole does not truly embrace sports.

There are faculty on staff this very day whom I sat in class with 20 years ago, who openly took time to lecture students on the waste of college sports and their general disdain for the topic. That needs to stop. Sports shouldn't so much be pushed on students as much as the experience for them, the community, and alumni made more of an integrated support of BGSU. But that is a high concept, it takes time, lots of mental effort, lots of legitimate buy-in not lip service.

BGSU needs to be hostile, aggressive, unafraid in building support. Not just local but nationally. Limited staff and budgets hamper this now however, which is yet another thing that must change. A now former AD can kvetch about staff limits and he'd be right to do so. The University has to likewise realize the battle athletics fights needs to be part of a larger fight. Recruiting, alumni relations and development, university marketing, merchandising? I see no reason why these are split apart in the ways they are. Likewise, certain individuals and their precious fiefdoms need to be torn down. I'm not saying staffs need to be merged but there is more potential in full top-down coordination and effort than we get out of everybody doing their little parts.

BGSU should be able to march into even UT's supposed "home turf" and eat their lunch. Oh, I know the arguments provided when that is suggested and after 25 years I call bull-shit. UT is the ass-end of academics in Ohio and Toledo the city is the ass-end of civilization in Ohio, which isn't politically correct but true. Take our superior results on the field, in the classroom, and beat the other school to death with it. Even if you only split the money it is more than we get now. The city of Toledo can't draw jack to live inside it, make the point that BG the city and BGSU as a school is a suburb and rural outpost. That supporting it appeals more to students who might like to stay local, living in places better than Toledo. You make it clear to them that the best and brightest are at BGSU and living in the burbs, not Toledo, and by not supporting us more they are failing to reach those whom they say spending at UT is supposed to serve.

You reach out beyond NW Ohio, because bluntly there isn't that much money to be had around here. Find the niches where our programs have done well, be bold, make the case, at least bloody well try. And do it while we still have a case to make with decent football, cachet as a top college town, with programs and veteran friendly status all over the place to leverage.

Don't just jam another stupid hashtag on an annual tee-shirt and go home, that won't save BGSU athletics.

Anonymous said...

Stumbled upon this story a few years ago and found it interesting that, even in 1871, faculty was complaining about the role of intercollegiate athletics in a University setting.


I don't see the "doom and gloom" that others do about college sports. Might the landscape shift dramatically from what we all grew up with? Sure. But I'm not ready to suggest that faculty upset with college sports is some new phenomenon that's going to destroy college athletics.

When the first professional baseball player earned a $1 million contract, I'm sure there was gnashing of teeth over the death of pro sports, but salaries have continued to escalate. There's no reason to suggest the same can't happen in college sports.

In the end, there's only so many players to go around. We aren't getting Ohio State's recruits now. So, no matter how much money they spend, they aren't dipping into our talent pool. There's no reason to believe, outside of the general ebbs and flows of a program, that the talent level we get in the future will be any less than what we are getting today.

NWLB said...

I understand and appreciate your thoughts, but this isn't really the same situation as a player earning a new record salary, not getting the same recruits as bigger programs, nor the standard faculty hostility toward sports in general. All of those are historic norms.

Spending is only going up, schools are not closing the gap with the most elite schools in fact they are losing ground faster by the year. The pool of money from TV contracts for non-elite conferences is starting to dry-up as the value declines to TV networks. There is growing political sentiment to force change. A lot of things, including some at BGSU are only surviving as they are on the grace of success.

I don't think the whole world is going to collapse overnight. And usually to some extent things work out alright. But change is coming, period. It really has too. And those leading BGSU through the coming years have to be able to engage what is unique about the school and community, not just run the same playbook they wrote in grad school.

Orange said...

Enjoying the discussion very much. I fall a little more on the side of the points NWLB is making...