Big Ten Expansion Part Six: an MSU Perspective

 Big Ten Expansion Part Six  In our series of articles covering conference expansion, we have looked at potential schools that hopefully the Big Ten can

 

Big Ten Expansion Part Six

 

In our series of articles covering conference expansion, we have looked at potential schools that hopefully the Big Ten can land, those I hope they don’t land and many other aspects of the process. Today we take a look at the expansion from another angle. We will look at this from the perspective of the schools themselves and we will use MSU as the active comparator.

 

The Spartan Nation has long been a proud fan base knowing that the MSU athletics are 100% self-sufficient. They get absolutely zero tax dollars or revenue from Michigan State University. They are a stand-alone entity. That is something to be very proud of. It is something that is rare in college athletics.

 

Most schools have to “prop up” their athletic programs. Michigan State is the rare exception. What makes this even more astounding is that they get no financial help from the university. The university is never shy when it comes to finances. They are constantly dipping their hands into athletic department and constantly taking more. They never ask, they just ‘do.’ They never ask Mark Hollis if he can afford to do all that the administration mandates. They just simply take more of the pie.Â

 

Fans should be outraged at how the university administration has treated athletics. Big Ten expansion and the new revenue it brings will greatly help MSU athletics.

 

Considering what Mark Hollis inherited, he has done a masterful job managing the MSU athletic program. Hollis has had to endure an adminstation that has largely looked at his department as a university subsidizer rather than a stand alone profitable department. It is a shame. Â

 

Let’s look at the MSU athletics model and why they are in need of the enhanced revenue.

 

At many schools the athletic department in some part gets help financially from the university. Here is how.

 

1. Student Fees: At some other colleges the students are assessed a fee each semester or quarter with their tuition that is sent to the athletic department. It is a way for the students to help cover the costs. I don’t support this model at all, but it does happen in many places. MSU is not one of them. Remember whether or not we like any model, if other schools athletic programs are getting money this way and the Spartans are not, that is what MSU competes against.
2. Tuition wavers is another area. This one astounds me. Most people are not aware that the athletic department has to write a check to the university each term to cover the tuition of an athlete. Many assume that since he plays for MSU that they absorb that cost. This is not true. Tuition wavers are when a student is given a scholarship to play at a school, and he/she is not a resident of the state the University is located in. The University charges a significant lower in-state tuition cost to give the athletic department a break. According to Tom Oswald who is an MSU Communications manager, the process is easy math. The cost per credit for a state of Michigan resident student is $342. If a student comes to MSU from another state the cost per credit hour is almost $895.75.  Let me put his in perspective. Last year when MSU kicked off the football season against Montana State, they had 42 non-Michigan resident players. If each of them took 15 credit hours for the fall and winter terms (the average according to Oswald) that would be a total of 630 credit hours. At the out of state rate that would be a check in the sum of $564,322.50 that Mark Hollis would have give to the University. If MSU had a tuition waver system like MANY schools do (and in my opinion it is an embarrassment they don’t) they would have had to pay $216,610 at a savings of $345,712.50 or 62%. Now remember that most go to summer school and there are 24 OTHER varsity sports at MSU. The numbers are astounding. I know that there is support on the Board of Trustees to pass tuition wavers to help Hollis, because I have spoken with members of the board who told me they would support it.  Many other schools use tuition wavers to help their athletic programs that like MSU athletics are the single largest revenue stream for a University. Once again MSU athletics loses as do you the fan. Do you want your coaches to question whether they take a kid from Ohio or do I take a Michigander who is less talented because it will save us money? I know of one former MSU coach who felt like that and he told me, “Had to take that into account. It is sad, but sometimes it did come down to dollars and that shouldn’t be that way.” Izzo and Dantonio both take a Michigan first mentality for the right reason. Not this one, but I don’t want them or any other coach to ever consider than on a recruit. Remember folks. Each year the athletic department (the largest revenue source) gives the University a check for $11,000,000. Eleven million. I realize that capitalism isn't as widely respected as it once was, but come on. Athletics is their biggest source and they can't even treat them like a valued customer? If any business treated their best customer like the Universtiy did athletics they would be out of business. Saying the right thing at a press conference DOES NOT make you a supporter of the athletic program. Actions do.
3. Subsidies are the last way that other schools help their athletic departments out and MSU does not. Like the first option of student fees, I do not support this one and think it is absurd. This is exactly what it says. It is a check written from the school to the athletic department out of their general fund to help defray the costs. Sadly in a few moments I will show you where not only is this very common way of financing athletics at other schools, but in the Spartan Nation the reverse is going on. Athletics is giving money back to the school. Not for tuition, actually giving them back money essentially giving them a subsidy.

 

Spartan athletics subsidizes the University.

 

I can tell you that the heading I just wrote is going to infuriate some people. Frankly I don’t care. Not because I am flippant, but because athletics is in a constant state of flux trying to raise more money (obviously from the fans) while the university takes more and more. Mark Hollis can’t cut, but has to balance rising costs and a university that is taking more from him. Imagine with your own expenses. If things are tight the average American family or business (certainly not the Government) cuts their costs. Hollis isn’t allowed to cut, and has the university just keeps on takin’.

 

Let’s look at four areas that will shock the average MSU fan. MSU once again has to deal with an administration that takes from them and gives very little back in return.

 

Concessions

Think about this. When you go to the Breslin Center or the High Cathedral of the Spartan Nation (Spartan Stadium), how often to you buy a hot dog? Most people would think that all of that money goes to athletics. WRONG. Let me break it down for you.

 

For the sake of this discussion let’s say that a hot dog at the Breslin or Spartan Stadium costs you $3. For the sake of argument once again lets say that the cost of the dog, wrapper, condiments and distribution and all expenses that they can tag on means the true profit is $1. Athletics only gets fifty cents. $.50. The other $.50 goes to the University. So out of that $3 hot dog only $.50 goes to athletics because the University sets the cost and then takes half of the net. Remember they set the cost so there is profit in the cost before they “Split it” with athletics.

 

Licensing

My niece is a brilliant veterinarian. She is smart (beautiful by the way) and did well at MSU and is now successful in her practice. I love her and adore both her intelligence and skill. I can also tell you that the vet school doesn’t drive shirt and souvenir sales like athletics.

 

The Dubai campus doesn’t drive sales like an Izzo march to yet another Final Four. It doesn’t do what a bowl trip and a successful football program do. When you go buy your MSU football hoodie how does that money get split? Surly the athletic department gets all of the money from their apparel sales. Certainly when you buy that Final Four hoodie they at least make the profit right? No.

 

For the sake of this argument lets say the hoodie you bought proclaiming the success of the Spartan Nation’s Final Four costs $50. Again for the sake of the argument let’s assume the vendor had to pay MSU a licensing fee of $10 to sell it with their logo and name. You would assume that the $10 would go to Hollis since it was because of athletics. You would assume wrong. Here is how MSU breaks up that $10. MSU takes 10% or $1 for expenses. They then give $4.50 to the general scholarship fund. Athletics gets the other $4.50. Forget that the revenue was raised because of athletics. Once again athletics kicks in revenue to non-athletic endeavors. If they were supported by the school it would make sense, but being stand alone is simply amazing.

 

Parking

So it is a beautiful fall day and you have your parking spot. You bought a pass for all home football games. Let’s assume for arguments sake it cost you $100 for the year. Sure athletics is what brought you to campus. You are parking, but only a slight percentage goes to athletics. Think about this. One senior administrator told me, “It is only a slight amount. Minimal. Almost nothing when you look at the percentage that is given to athletics compared to what is taken in.” Really? They "Give" athletics $100,000 dollars of the millions generated by parking. You are going to see athletics, but athletics doesn't prosper from it.Â

 

 So you go and buy a hot dog, grab a hoodie and park to support your football or men’s basketball team and very little goes to athletics. What a sham!!

 

In part seven on Big Ten Expansion we continue our series looking at MSU as the example. Find out what bad news Hollis got courtesy of the Administration without any approval from the Board of Trustees. Why for years did MSU ignore a simple request to help athletics and finally who to blame?