Thursday, March 05, 2009

Still raking it in..2007 Football Revenues

ESPN.com's Adam Rittenberg, their Big Ten Blogger, wrote up this piece about Big Ten football revenues and expenses in the 2008 fiscal year (which would be the 2007 season), pulling from work done by The Cedar Rapids Gazette's Scott Dochterman. There are some interesting numbers from the Michigan perspective:

Michigan was the most profitable football program in the Big Ten, making a profit of just over $40 million dollars during Fiscal 2008. This was three million more than Penn State.

Michigan was #2 in revenues in the Big Ten, and fifth in expenses (and just 200K away from Penn State at sixth in expenses), but was still nearly six million dollars behind Ohio State. The key difference is that Ohio State's football expenses were almost double those of Michigan's (33 million dollars for the Buckeyes.)

I do not know if the football revenues includes bowl revenues divided up among the 11 Big Ten teams and the Conference. But, every football program in the Big Ten made money last year by this measure.

I also do not know if this data includes donations, scholarships, etc. made directly to the football program, as well as gifts to the athletic department without specific targets.

I'm hesitant to go all wonky on the fact that Michigan had the largest recruiting expenses in the Big Ten, because they are estimates by the author (though soundly arrived at) and they are for two seasons ago. That said, I am not surprised that Michigan would rank at the top of this list, mostly due to Michigan's national recruiting base and the coaching transition last season. I'd be interested to see the numbers from FY 2007 to see how they compare.

Being the 2007 season, Michigan's "victory" as the most profitable football program in the Big Ten was likely aided, sadly, by the 12th game, against, well, let's not go there. But as I was reminded when I kvetched about Delaware State, we didn't add Delaware State to the schedule, we added roughly four million dollars to the schedule.

I want to be clear that this next line is not snarky "Ohio State is always up to no good", but genuine curiosity: How did Ohio State spend nearly seven million dollars more than Iowa, the number 2 program in expenses? I realize that when you make the most money, you can afford to spend the most money, but the disparity seems rather significant.

It will be very interesting to see the FY 2009 numbers, if they come up again, for several reasons:
* Michigan only had seven home games last season (and if I recall correctly, Notre Dame keeps the gate for games in South Bend and Michigan does the same for games in Ann Arbor. Big Ten Conference games, if my quickly researched information is correct, the visiting team gets 35% of the gate.) Will that loss of $4 million (which is a ballpark number based on $50 per seat * 80,000 seats + $25 per seat * 20,000 student seats - guaranteed payout to opponent) hurt Michigan's bottom line.
* Will the buyout for Coach Rodriguez, as well as his salary and the salary package for his assistants, be included in the expenses?
* How will the construction costs on the stadium expansion figure into this, if at all?
* Will potential losses in season ticket revenues (or Victors Club donations) figure in to this?

As a whole, these numbers are interesting, but potentially misleading. There's three numbers for each school with some minor context. This is not to say I think there are any shenanigans going on here or with any of the Big Ten teams, it's just too narrow a snapshot to know a lot of this and like an onion, as we peel back more layers, more layers arise.

(Note: I hate to look at Michigan's football program as a revenue stream, but to ignore the realities of the impact that finances have on major college football in this era. The various arms races, in facilities, in coaching salaries, in recruiting budgets and the like, all problems dating back to the time of Fielding Yost, mean that Michigan needs football to maximize their profit margins while not harming the product on the field.)

3 comments:

Chris said...

The recruiting costs are for all men's sports, not just football. Michigan has elite teams in a number of sports -- including golf, tennis, swimming, track and field, soccer -- where there are probably recruiting costs as well.

Credit said...

I would guess that the OSU expense number is inflated by remaining debt on their stadium expansion in 1999-2001.

Craig said...

Credit:

I actually had the same thought on Friday, but didn't want to say anything until I did a little more research. Good call though.