Montana AD: Finances of FCS

[TexasTerror]

Here's a post that I threw up on the other site and thought it was worth bringing over here because of the discussion it brought.

I am not sure how many of you saw this on MontanaGrizzlies.com. The athletic director posted a note on their official web site regarding ticket renewal and more particularly, why the $$$ is due early.

I am going to include some of the more interesting points and we can go forward with discussion from there, link at the bottom...


With increasing economic concerns, athletic departments across the country are seeking ways to determine more accurate numbers to keep them out of deficit. One way is to move up ticketing renewal dates.


Our football program brings in approximately $6.5 million per year in revenue through various funding sources (ticket sales, GSA contributions, corporate sales, etc.). The cost to run the program is $6.5 million, so it essentially breaks even. Every other school at the Football Championship Subdivision level loses money, thus causing university officials across the country to look closely at their programs. Many are losing in the neighborhood of $4 to $6 million per year.


In the past two months, Northeastern and Hofstra have announced they are dropping their football programs. There is high speculation other schools may follow. Our goal is to do our best to generate the most revenue possible and to use as little of the state/institutional support as possible. This is a challenge, but with the continued support of our dedicated fan base who go the extra mile to support the program, we can continue the fine tradition that has been established over the years.

http://www.montanagrizzlies.com/pages/news_item.aspx?n=8648&m=175

[TexasTerror]

Some of the key points brought up by posters, to help open up some more discussion...

1) ADs having to balance budgets based on revenues/expenses specifically for college athletic departments

2) 'Hard money' vs 'soft money'

3) Handling of scholarship money - whether or not it should count towards an athletic department budget or not.

4) Where does some of the revenue earned at sporting events go - namely concessions, guarantees, etc. - and who is paying for it?

5) Whether or not programs do lose money on sports?

[msusig]

Some of the key points brought up by posters, to help open up some more discussion...

1) ADs having to balance budgets based on revenues/expenses specifically for college athletic departments

2) 'Hard money' vs 'soft money'

3) Handling of scholarship money - whether or not it should count towards an athletic department budget or not.

4) Where does some of the revenue earned at sporting events go - namely concessions, guarantees, etc. - and who is paying for it?

5) Whether or not programs do lose money on sports?



Football promotes the college to potential students and can lead to higher enrollment which means more money for the college. It also creates a since of loyalty to the college which can lead to more donations by alumni. It's not all about if football is profitable.

[ngineer]

The concept is wrong. College football...or basketball, softball, or whatever was not invented to "make money". How much money does the English Department make? If it is truly part of the overall educational process, then the 'bottom line' should be secondary. The question is, does the activity bring value to the University?

[DFW HOYA]

How many teams are losing $6 million? A better question, how many teams are even spending $6 million?

Outside of Montana, almost no one.

[Sonic98]

I was reading an article earlier today that had me wondering what is the average athletic budgest for each FCS conference

http://www.clarionledger.com/article/20100617/SPORTS030106/6170339/Most-budgets-rise-but-not-Valley-DSU

[Lehigh Football Nation]

Ole Miss has the larger of the two totals, checking in with a projected $43.7 million. Mississippi State's 2010-11 budget is $37.4 million. Both budgets are among the smallest in the Southeastern Conference.

Jackson State's $6.8 million, which increased by 3.3 percent, is the largest of the state's three Southwestern Athletic Conference teams.

Budgets didn't rise everywhere, though. Mississippi Valley State's $3.3 million budget is 20 percent less than last year's edition. Alcorn State's $5.3 million budget stayed basically the same.

That tells you everything you need to know. For comparison, Lehigh's total athletics spending was somewhere around $21 million, I think, with the lion's share of that being scholarship money.

[Lehigh Football Nation]

Our football program brings in approximately $6.5 million per year in revenue through various funding sources (ticket sales, GSA contributions, corporate sales, etc.). The cost to run the program is $6.5 million, so it essentially breaks even. Every other school at the Football Championship Subdivision level loses money, thus causing university officials across the country to look closely at their programs. Many are losing in the neighborhood of $4 to $6 million per year.

I think it's highly irresponsible for him to say this because that implies that the kids you are paying on scholarship in the football program would be replaced with rich students that would receive no aid. Whether the scholarship expense comes from the athletic department or financial aid, it's still an expense for the school.

When you take scholarship costs out of the equation, the real cost is something like $1 million to $2 million a year - not chump change, but not a $6 million hole. That is an incorrect, dangerous argument.

[Sonic98]

That tells you everything you need to know. For comparison, Lehigh's total athletics spending was somewhere around $21 million, I think, with the lion's share of that being scholarship money.

yeah all 3 schools need a serious upgrade in facilities and budget. JSU and Alcorn just off the size of the schools should be working with budgets of at least 80% of what USM is working with

[Ronbo]

An athletic schalorship is a paper loss. Does a scholarship athlete deny admittance to a student that pays his/her own way? NO. Does a scholarship athlete create the need to hire more professors? NO. Is the University getting fewer paying students because they bring in a couple hundred scholarship athletes? NO! In fact it has been reported many times that a good athletic program is one of the deciding factors when students choose a college. Since 1990 when Montana started winning consistentley in football our enrollment has increased from 9000 to 14,500. 61% more paying students.

[TexasTerror]

The fact that Valley has a $3.3M budget is just flat out ridiculous...

Every school in the Southland's budget is at least twice that much except for Nicholls. Believe Nicholls was at $6.4M last I checked.

[MR. CHICKEN]

NO SCHOOL MAKES DUCATS...ON PIGGY........GRIZZWOLD'S BREAK EVEN........AFTERAH SQUANDERIN' 6.5 MIL.............NOT AH-LOTTAH BANG FO' BUCKS.....DERE MONTE........AS YER BEIN' OUT HUSTLED BAH......SOME PROGRAMS.......WHO ARE ON BEANS & FRANKS.......xchinscratchx.....BRAWK!

[WMTribe90]

An athletic schalorship is a paper loss. Does a scholarship athlete deny admittance to a student that pays his/her own way? NO. Does a scholarship athlete create the need to hire more professors? NO. Is the University getting fewer paying students because they bring in a couple hundred scholarship athletes? NO! In fact it has been reported many times that a good athletic program is one of the deciding factors when students choose a college. Since 1990 when Montana started winning consistentley in football our enrollment has increased from 9000 to 14,500. 61% more paying students.

In WM's case the majority, if not all, of the football scholarships are endowed with private donations/funds. The athlete attends for free, but the school still recieves tuition for the student-athlete. So, in our case it really isn't realistic to count scholarship costs as a cost incurred by the college. T4SF can correct em if I'm wrong here?

[henfan]

It really burns my britches when ADs & CEOs use creative math, scare tactics, hyperbole and selective observation to justify their fundraising practices. These folks have no shame.

If they want the public to believe one word of the crap they're peddling, they'll open up their books for public examination.

Short of that...xwhistlex

[DFW HOYA]

An athletic schalorship is a paper loss. Does a scholarship athlete deny admittance to a student that pays his/her own way? NO. Does a scholarship athlete create the need to hire more professors? NO. Is the University getting fewer paying students because they bring in a couple hundred scholarship athletes? NO!

Well, it can (and often times, does) in schools with fixed enrollments.

[Squealofthepig]

Since 1990 when Montana started winning consistentley in football our enrollment has increased from 9000 to 14,500. 61% more paying students.

Quick fact check on that, as that's pretty nonpersuasive. That's a gain of 5,500 students over a period of twenty years, or a sixty one percent gain, as you point out. But that's over two decades! Let's look at that every year then.

Over twenty years, that's 1.61^.05 power, or 2% gain in students every year. Then there's the small problem of showing a strong correlation between Montana's football success and that number...

Definitely agree that the football program can be one of the most effective marketing tools any university can have; however, truly measuring the positive impact is definitely not clear cut.

[ursus arctos horribilis]

Quick fact check on that, as that's pretty nonpersuasive. That's a gain of 5,500 students over a period of twenty years, or a sixty one percent gain, as you point out. But that's over two decades! Let's look at that every year then.

Over twenty years, that's 1.61^.05 power, or 2% gain in students every year. Then there's the small problem of showing a strong correlation between Montana's football success and that number...

Definitely agree that the football program can be one of the most effective marketing tools any university can have; however, truly measuring the positive impact is definitely not clear cut.

It may have something to do with the football program but the University was growing every year and we had no notable national level success until 1995. Being in the playoffs didn't probably do a whole bunch as far as marketing up until then. The other thing that probably had much more to do with it is the Missoula & Bitterroot population explosion of the 90's.

[bandit]

Interesting comments, especially his assertion that there is heavy speculation that more FCS schools will drop their programs. He mentions Hofstra and Northeastern, obviously.... who else is in danger?

[TokyoGriz]

Interesting comments, especially his assertion that there is heavy speculation that more FCS schools will drop their programs. He mentions Hofstra and Northeastern, obviously.... who else is in danger?

Portland State, Eastern Washngton, and Northern Arizona are in trouble in Big sky country I have heard.


I know for sure Portland State and Northern Arizona have publicly mentioned the possility of dropping football to save money.

[TokyoGriz]

And Montana has Financial difficulties as well according to AD Oday in this U of M kaimin article.



In a meeting with the Kaimin a month ago, athletic director Jim O’Day outlined the budgetary crisis the athletic department was facing. He said budget cuts and rising fixed costs have put the program in a tight spot and gave three possible solutions:
—The aforementioned move up, which would give the Griz more revenue in the form of television contracts and league payment.
—The end-of-the-world option of a move down to Division II that would cut the amount of money to Montana’s teams, though the lower division would compensate with lower-quality opponents.
—The third option of staying in the Big Sky and potentially cutting the more expensive out-of-state scholarships, limiting the ability for the Grizzlies to compete.
A month later in his office, O’Day ruled out choice two.
“Where we’re at right now, I don’t think that’s even an option,” O’Day said. “We have too much going for us.”
If the athletic department can work through its budgetary woes, option three would be pristine, O’Day said.
“Right now, we’re very comfortable with where we’re at,” he said. “The Big Sky Conference is good for us right now.”
But it’s the first option that has been the talk of the town.



Source University of Montana Kaimin, April 15th 2010 by Tyson Alger
http://www.montanakaimin.com/index.php/articles/article/changes_ahead/1099

[Lehigh Football Nation]

Interesting comments, especially his assertion that there is heavy speculation that more FCS schools will drop their programs. He mentions Hofstra and Northeastern, obviously.... who else is in danger?


Portland State, Eastern Washngton, and Northern Arizona are in trouble in Big sky country I have heard.

I know for sure Portland State and Northern Arizona have publicly mentioned the possility of dropping football to save money.

I repeat that I think his claims of schools losing $6 million a year and potentially dropping football are massively overblown. It does cost money to field a team, but probably somewhere in the $1 million range - and likely could be covered by a university president should he or she choose.

It's worthy of noting that Northeastern never mentioned cost as a reason for dropping football, and after initially mentioning cost Hofstra seriously backpedaled away from that argument as well, probably because it couldn't survive even a tiny bit of scrutiny. (It may very well have been a reason why they lost their head basketball coach to Fordham as well.) This is precisely why O'Day's repetition of the old, incorrect arguments of financial meltdown is so worrisome.

[ursus arctos horribilis]

I repeat that I think his claims of schools losing $6 million a year and potentially dropping football are massively overblown. It does cost money to field a team, but probably somewhere in the $1 million range - and likely could be covered by a university president should he or she choose.

It's worthy of noting that Northeastern never mentioned cost as a reason for dropping football, and after initially mentioning cost Hofstra seriously backpedaled away from that argument as well, probably because it couldn't survive even a tiny bit of scrutiny. (It may very well have been a reason why they lost their head basketball coach to Fordham as well.) This is precisely why O'Day's repetition of the old, incorrect arguments of financial meltdown is so worrisome.

I dont' buy any of it either.

Anybody believing that football at UM loses ACTUAL money is a fool. They siphon off revenue to other departments and load up expenses on the football ledger to make it easier to keep the gravy flowing out of football.

It's a position move to get the hold out fans that are happy with playing at this level to say "A move up is now necessary". Even if the "move up" is deemed as un-doable they have set the table with a scare tactic to make it easier to up the ticket prices again.

[CopperCat]

An athletic schalorship is a paper loss. Does a scholarship athlete deny admittance to a student that pays his/her own way? NO. Does a scholarship athlete create the need to hire more professors? NO. Is the University getting fewer paying students because they bring in a couple hundred scholarship athletes? NO! In fact it has been reported many times that a good athletic program is one of the deciding factors when students choose a college. Since 1990 when Montana started winning consistentley in football our enrollment has increased from 9000 to 14,500. 61% more paying students.

MSU's football teams consistently SUCKED in the 90's (with a few exceptions, Rob Compson comes to mind) and their enrollment is 13,000+. I think there is much more to this equation than you are suggesting.

[Husky Alum]

Cost was an indirect issue at NU, not the current cost - but the future costs to compete.

In order for NU to compete in the CAA, we'd have needed a complete overhaul of our atheltic facilities, which couldn't be done given the footprint of our campus and the inability to secure an on/near campus site for a suitable FCS facility.

As someone who was involved in the discussions, NU never said "we can't afford to play football" we said "we can't afford the incremental costs to compete with the large public schools in the CAA who can build 20-35K seat stadiums and who have training facilites that cost more than we wish to pay, and who have more sources of funding."

NU has a hard cap on its enrollment, so to say there's no "cost" to scholarships isn't accurate for NU (and I wager for many private schools). NU is heavily tuition reliant for its operating budget, so you can argue, NU will be able to "sell" some of the scholarships from football to other departments in the school - where the level of donations, goodwill, warm fuzzies from college can support it, or sell the slots to other students.

[bandit]

Cost was an indirect issue at NU, not the current cost - but the future costs to compete.

In order for NU to compete in the CAA, we'd have needed a complete overhaul of our atheltic facilities, which couldn't be done given the footprint of our campus and the inability to secure an on/near campus site for a suitable FCS facility.

As someone who was involved in the discussions, NU never said "we can't afford to play football" we said "we can't afford the incremental costs to compete with the large public schools in the CAA who can build 20-35K seat stadiums and who have training facilites that cost more than we wish to pay, and who have more sources of funding."

NU has a hard cap on its enrollment, so to say there's no "cost" to scholarships isn't accurate for NU (and I wager for many private schools). NU is heavily tuition reliant for its operating budget, so you can argue, NU will be able to "sell" some of the scholarships from football to other departments in the school - where the level of donations, goodwill, warm fuzzies from college can support it, or sell the slots to other students.

Then why agree to join the CAA in the first place? Surely these facts were known before making the move to the CAA.

And secondly, if competing in the CAA is the issue, why drop football entirely? Why not try and determine a league home that would better suit all of Northeastern's athletic programs, including football?

[Husky Alum]

When we joined the CAA we had plans (similar to UR) to build a 8,500-10,000 seat stadium on our campus, which would have ameliorated the need for Parsons for football. There are/were some pictures of the proposed stadium floating around in 2005.

However, we were unable to obtain approval from the City of Boston to construct the facility - on land we owned.

Then, NU and Bob Kraft teamed to approach the City of Boston to build a 20-22,000 seat stadium for the MLS Revolution, NU football/soccer/and a new lax program on a lot across from Boston Police Headquarters that has been vacant since the 1980s or so. NU and the Revs would have split the cost, and the designs (which very few have seen) were simply magnificent. A stadium built with no track around it, seats up to the pitch, 1/2 block from NU's campus, with plenty of parking for tailgating. Was a fan's wet dream.

However, the City of Boston refused to sell/lease the land to Kraft and/or NU for an athletic facility. The neighbors have said for years that they would only use that plot of land for "mixed retail" - so the land will lay fallow for about 20 more year.

NU believes that it can (and its performance on the fields have demonstrated) compete in the CAA. Without football, we've increased funding for the sports in the CAA we believe we can compete on a regular basis - field hockey, m/w basketball, baseball, m/w track, m/w soccer.

One thing to keep in mind, NU's sport to "tie people to the University" is ice hockey. That's the sport that draws the most and has the students' interest.

Our sport that garners the most alumni donations - men's and women's crew.

[Proud Griz Man]

Sale of Griz Jerseys, T-shirts, hats, banners, etc. is not in the Athletic Department revenue. Diverted elsewhere. Plus in the expenses is rental payments on the Adams fieldhouse facilities, offices, lockerrooms, etc. Football is profitable, make no mistake about that.

[WMTribe90]

When we joined the CAA we had plans (similar to UR) to build a 8,500-10,000 seat stadium on our campus, which would have ameliorated the need for Parsons for football. There are/were some pictures of the proposed stadium floating around in 2005.

However, we were unable to obtain approval from the City of Boston to construct the facility - on land we owned.

Then, NU and Bob Kraft teamed to approach the City of Boston to build a 20-22,000 seat stadium for the MLS Revolution, NU football/soccer/and a new lax program on a lot across from Boston Police Headquarters that has been vacant since the 1980s or so. NU and the Revs would have split the cost, and the designs (which very few have seen) were simply magnificent. A stadium built with no track around it, seats up to the pitch, 1/2 block from NU's campus, with plenty of parking for tailgating. Was a fan's wet dream.

However, the City of Boston refused to sell/lease the land to Kraft and/or NU for an athletic facility. The neighbors have said for years that they would only use that plot of land for "mixed retail" - so the land will lay fallow for about 20 more year.

NU believes that it can (and its performance on the fields have demonstrated) compete in the CAA. Without football, we've increased funding for the sports in the CAA we believe we can compete on a regular basis - field hockey, m/w basketball, baseball, m/w track, m/w soccer.

One thing to keep in mind, NU's sport to "tie people to the University" is ice hockey. That's the sport that draws the most and has the students' interest.

Our sport that garners the most alumni donations - men's and women's crew.

That's too bad the city stone-walled NU twice. The Revolutions soccer/NU football facility sounds like it would have been a great FCS venue. Really too bad. Can't disagree with the end assessment that NU was not positioned to compete in the CAA in the long-run without improved facilities.

[bandit]

When we joined the CAA we had plans (similar to UR) to build a 8,500-10,000 seat stadium on our campus, which would have ameliorated the need for Parsons for football. There are/were some pictures of the proposed stadium floating around in 2005.

However, we were unable to obtain approval from the City of Boston to construct the facility - on land we owned.

Then, NU and Bob Kraft teamed to approach the City of Boston to build a 20-22,000 seat stadium for the MLS Revolution, NU football/soccer/and a new lax program on a lot across from Boston Police Headquarters that has been vacant since the 1980s or so. NU and the Revs would have split the cost, and the designs (which very few have seen) were simply magnificent. A stadium built with no track around it, seats up to the pitch, 1/2 block from NU's campus, with plenty of parking for tailgating. Was a fan's wet dream.

However, the City of Boston refused to sell/lease the land to Kraft and/or NU for an athletic facility. The neighbors have said for years that they would only use that plot of land for "mixed retail" - so the land will lay fallow for about 20 more year.

NU believes that it can (and its performance on the fields have demonstrated) compete in the CAA. Without football, we've increased funding for the sports in the CAA we believe we can compete on a regular basis - field hockey, m/w basketball, baseball, m/w track, m/w soccer.

One thing to keep in mind, NU's sport to "tie people to the University" is ice hockey. That's the sport that draws the most and has the students' interest.

Our sport that garners the most alumni donations - men's and women's crew.


A shame things didn't work out with the proposed stadiums. I'm still surprised that the university decided to drop football entirely rather than seek a league home that would better fit all of its athletic programs, but maybe that wasn't an option.