Friday, August 12, 2011

Twin City Federal Stadium - University of Minnesota


Judith Martin, a longtime geography professor and faculty leader at the U explains the plan [of President Bruininks] in this way: “The biggest way you can improve your rankings is to graduate students in four years and buy yourself a couple of Nobel-winning profs, right? Takes care of everything else. If your football team can win, that’s icing on the cake.”

See p. 3 in the July 2011 Minnesota Monthly report on The Man Who Slew The U (emphasis added).

The strategy of buying “star professors” did not work at the Medical School. See Financial Perils at Medical School.

And a big time athletics program is expensive icing.

In fiscal year 2009 the U of M ranked No. 20 in the nation in expenditures on athletics at $70.3 million. (The University of Southern California ranked No. 10 at $80.2 million.) See Table 1.1 on p. 18 of Big Time Sports in American Universities (Cambridge University Press 2011) by Duke University economics professor Charles Coltfelter.

The color of the financing is red:

Yet again, nearly every Division I athletics program spent more than it made last year. . . . The [NCAA] report, released Tuesday, presents a bleak financial picture of intercollegiate sports and reinforces critics’ charges that the current pattern of sports spending is unsustainable.

Only 14 programs [out of 120] from the Football Bowl Subdivision (formerly Division I-A) generated more revenues than expenses. This is down from 2006-07 and 2007-08 when 25 programs turned a profit. . . .

In a similar vein, the median institutional subsidy for athletics in the FBS rose from around $8 million in 2007-08 to more than $10 million in 2008-09. This reliance on institutional funds has increased as the growth in median revenue generated directly by athletics programs in the FBS—via sources such as ticket sales and media contracts—slowed to nearly 6 percent from 2008 to 2009. This is down significantly from the 17 percent growth in revenue from 2007 to 2008. By comparison, total athletics expenses sped in the other direction—ballooning by nearly 11 percent. This is double the growth in expenses from 2007 to 2008.

Up,Up and Away, the August 18, 2010 report in Inside Higher Ed (emphasis added). See also the 2010 report of the Knight Commission on Restoring the Balance: Dollars, Values, and the Future of College Sports.

The athletic department at the U of M continues to receive annual multi-million dollar subsidies from the general fund of the University (the Operations & Maintenance Fund). In fiscal year 2010 the subsidy was $8 million; in fiscal year 2011 the subsidy was $7.8 million. See pp. 77, 81 of the U of M budget. Meanwhile, the administration continues to cut courses and faculty positions and to replace professors with part-time instructors without tenure. See Section 1 of $tate of the University—A Parent’s Perspective.

Then there are the continuing direct and indirect costs for the construction of a $288.5 million football stadium that will be used for six games each year. See Section 5 of University Inc. Part II.

There is a solution that would enable the University to disentangle itself from the big business of the major revenue sports while allowing those programs to continue. The football and basketball teams should be organized as separate corporations. The University would grant a license to those corporations to use the University name for the teams. The license fee would be a percentage of the revenues generated from ticket sales, broadcasting rights, advertising, etc. The license fee income would be used to support the non-revenue sports that the University decides to retain, such as track and swimming. This is a solution that would enable the fans to continue to enjoy the games and would enable the University to focus on education, research, and public service—the reasons for its existence.

Michael W. McNabb
University of Minnesota B.A. 1971; J.D. 1974
University of Minnesota Alumni Association life member

No comments: