SBD/March 6, 2013/Colleges

Hoop Dreams: Basketball A Powerful Revenue Generator At Michigan, Michigan State

MSU’s basketball revenue during ’11-12 was $19.2M, the highest in the Big Ten
Football is the "main revenue generator for most college athletic programs,” including Michigan and Michigan State, but at both schools, particularly MSU, basketball "more than pays for itself while generating a substantial surplus used to fund the other, non-revenue sports,” according to Angelique Chengelis of the DETROIT NEWS. U.S. Department of Education figures show that MSU’s basketball revenue during ’11-12 was $19.2M, the “highest in the Big Ten,” while UM’s was $9.8M. While a “main source of revenue for both sports at Michigan State comes from donors," bringing in added resources is "about financial survival.” MSU AD Mark Hollis said, “In our case, we’re right around an $80 million budget, which is relatively low for a 25-sport department. Without basketball, it would be impossible to sustain.” UM AD Dave Brandon said, “Men’s basketball is a significant contributor. It not only pays for itself -- and it’s an expensive sport (Michigan had nearly $6 million in expenses), but it helps defray the costs of many of our other sports.” Chengelis noted the Michigan and Michigan State men’s hockey teams “typically break even each season.” But Hollis said that MSU’s women’s basketball “never will be self-sustaining.” MSU’s women’s basketball team had $3.5M in expenses and $847,826 in revenue while UM’s women’s basketball program had $2.9M in expenses and revenue of $184,632. Hollis and Brandon said that this is why money “must be constantly fed into football and men’s basketball.” Hollis: “The hardest thing for an athletic director is resource-generation and resource-allocation. If you have a men’s basketball program that’s successful, it makes some of that decision-making easier” (DETROIT NEWS, 3/5).

GOING BEHIND THE CURTAIN: Hollis is on the NCAA Men's Division I Basketball Committee for the first time this year, and in Michigan, Gillian Van Stratt reported Hollis on Monday gave listeners of MSU men's basketball coach Tom Izzo's weekly radio show "a behind the scenes look at what that process entails." He said, "It's a lot more work than I anticipated coming in as far as the number of days. But now we're getting into selection week. I'll leave next Tuesday and we'll be locked in a room for about seven days the 10 of us and kind of go through the process." Van Stratt noted Hollis has "been watching a fair amount of basketball in preparation" for the selection process. Each committee member "has seven conferences that they work with extensively, gathering information and compiling a report to be shared with other committee members prior to jumping into the review and analysis." Hollis said he watched "about two to three games per night, at least parts of them." He said, "There's a thing called scrubbing, where once you get into the process of putting the teams in a rank order you'll go through and analyze every team against the one above them and below them. And you'll go through that literally hundreds and hundreds of times throughout the week trying to just get it perfect, trying to get the perfect set." A main concern during the selection process "is the attempt to keep teams closer to home, minimizing travel costs and the effect it has on student athletes." Hollis: "It's one of the surprises I actually had in the process. It very much is (a concern) at the top of each seed line" (MLIVE.com, 3/5). SportsBusiness Journal's Michael Smith two years ago took an inside look at the selection process.
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