SBJ/20100823/SBJ In-Depth

Print All
  • Gridiron Gold

    The understated charm of Michigan Stadium has been uniquely rooted in the cold, hard steel bleachers that run circles around the big bowl.

    The renovated Michigan Stadium will generate
    millions in additional revenue each year.

    The seats are not particularly comfortable and they’re too close together, but in 83 years of football at the “Big House,” none of the fans who packed the place  — up to 111,000 people these days — seemed to mind.

    The reason the biggest college football stadium in the country worked is because it stood for the same thing that Michigan football did: simple but successful; substance over style. The stadium was the essence of Bo Schembechler’s “three yards and a cloud of dust.”

    But when the season opens in a few weeks, style will have made great strides on substance in Ann Arbor. The “Big House” will be more than just big.

    The addition of 81 suites and 3,000 club seats — part of a $226 million renovation by HNTB — will have transformed one of college football’s great landmarks into a showplace for Michigan football. Rather than squeezing cheek to cheek on the old bleachers, suiteholders will now watch games from a climate-controlled environment that features granite countertops, tile backsplash, flat-panel TVs and leather chairs.

    Prior to its renovation, Michigan Stadium offered
    little more than a giant bowl of bleacher seating.

    The substance will be found on the athletic department’s revenue line. With more than 80 percent of the club seats sold and 63 of the 81 suites spoken for, the Wolverines stand to increase their annual revenue by about $15 million, which will take total athletic revenue to more than $100 million in fiscal 2011. Suites with 16 seats sell for $55,000 to $85,000 each, while the range on club seats is $1,500 to $4,000.

    Michigan Stadium stands prominently as another example of a school working feverishly to mine more revenue out of its football facility. With the expense side growing each year thanks to rising travel costs, double-digit tuition increases and skyrocketing coaching salaries, administrators are waging a race to keep pace on the revenue side.

    “It’s not just about building seats. It’s about creating a long-term revenue stream,” said Dick Baddour, athletic director at North Carolina. The university has $70 million worth of improvements to Kenan Stadium in the works, including 18 new suites. “When you think about this project when it’s paid off, then you’ve got a very significant revenue stream that simply didn’t exist before and that’s meaningful dollars that will help support, in our case, 28 sports.”

    Cultural differences

    An athletic department’s ability to increase revenue from its cash cow — football — isn’t unlimited. Administrators can raise ticket prices only so many times before they have to look for other ways.

    Club seats and suites are now part of
    Michigan’s inventory.

    Premium seating is the trendiest method to not only increase revenue, but also pay for other projects.

    Michigan’s project did more than build new luxury seating, it helped bring the aging stadium into compliance with Americans with Disabilities Act standards and widen the aisles, which allowed for the installation of handrails for the first time. The new premium seats, which will rise high above the top of the bowl at Michigan Stadium, will contain more of the noise and create a louder environment.

    The upgrades also created revenue in a venue in which the Wolverines have chosen not to sell advertising on video boards or in-stadium signage. There’s not even a corporate mark on the scoreboard.

    “Each school has a different culture and it does have an impact on the revenues they drive,” said Tom Stultz, senior vice president and managing director at IMG College, the multimedia rights holder at Michigan. “Michigan has no signage and they like it that way. That’s the game-day experience they want. Maybe it helps them in other ways, like driving more contributions.”

    At other schools, revenue-generating renovations to the football stadium have helped support other projects.

    Many of the suite holders attracted to the
    new Deacon Tower at Wake Forest had
    never bought season tickets before.

    Connecticut’s premium seating led to revenue that helped build a football practice facility and training center, primarily to meet recruiting needs.

    At Wake Forest, premium seating in the $38 million Deacon Tower opened a whole new fan base for the athletic department. Barry Faircloth, associate AD for external operations at Wake, was astonished to find that more than 30 percent of the suite holders in the Deacon Tower had not bought season tickets before. Suites there go for $28,000 to $50,000 each.

    Creating new fans is essential for Wake, which has an enrollment of just more than 4,000, the smallest in the big six college football conferences. The project also showed that premium seating doesn’t just work at schools like Alabama, Texas and Michigan; it’s a viable revenue tool at smaller schools as well.

    “We didn’t realize how many fans were looking for a good entertainment option and we didn’t have a product for them before we built the tower,” Faircloth said. “If you build something of a certain quality, people will pay for it. There’s a certain element there, whether it’s corporate entertainment dollars or just people who like to do things in a certain style.”

    That Wake Forest was able to not only build, but sell out 26 suites and 1,200 premium seats is an upset in itself, given the school’s small alumni base and woeful football past. Current coach Jim Grobe is the first coach to have a winning overall record at Wake since Peahead Walker in the 1930s and ’40s, and Grobe’s 2006 team won the ACC championship just as the Deacon Tower was taking shape.

    “Our timing couldn’t have been better,” Faircloth said.

    What about funding?

    Building the premium seats and reaping the revenue is sometimes the easy part, compared with how administrators are going to pay for the renovations.

    The University of Washington, about to start on a $250 million plan to practically rebuild Husky Stadium, went to the state legislature three times to ask for money and was denied each time. Washington finally settled on a preliminary plan that calls for building 25 suites, 25 loge boxes and 2,500 club seats.

    Football’s financial powerhouses
    Top athletic department revenue for football and overall*
    School Football Total
    Texas $87,583,986 $138,459,149
    Ohio State $68,196,195 $119,859,607
    Florida $66,150,063 $108,309,060
    Georgia $65,218,406 $81,496,357
    Alabama $64,606,392 $103,934,873
    LSU $61,868,953 $100,077,884
    Penn State $61,767,717 $95,978,243
    Auburn $58,618,819 $87,001,416
    South Carolina $57,118,519 $76,254,236
    Notre Dame $56,929,397 $81,088,368
    Nebraska $55,226,605 $74,881,383
    Michigan $52,246,025 $95,193,030
    Michigan State $43,506,725 $75,624,811
    Tennessee $42,805,360 $92,524,125
    Oklahoma $42,638,431 $81,487,835
    Wisconsin $40,005,517 $89,842,749
    Iowa $38,896,234 $79,521,143
    Arkansas $38,630,265 $63,978,641
    Texas A&M $38,358,422 $72,886,100
    Clemson $35,205,168 $60,167,535
    * 2008-09 academic year
    Source: SportsBusiness Journal analysis of U.S. Department of Education reports

    Most of the recent projects have been financed by a combination of borrowed money and fundraising. Michigan has generated about $30 million in gifts for the stadium renovation. UNC has a 50-50 model, with half of the money coming from gifts and half being borrowed.

    When Illinois spent $120 million to build 47 suites and 1,600 club seats in 2008, it achieved its goal of raising at least 15 percent from private sources to start the work. Those new premium seats at Illinois, which have sold out each of the last two seasons despite middling success on the field, have represented $5 million in new annual revenue, according to Ron Guenther, Illinois’ AD.

    Schools typically set up reserves to pay for the bonds in case there’s a revenue shortfall or perhaps a bad season leads to poor suite and ticket sales.

    “The advice I give everybody is to be conservative,” Guenther said. “The easy trap is to get overly aggressive. You’ve got a responsibility to the university’s administration to make sure you keep your debt under control. Your gate receipts are very tough to forecast, so you have to be prepared to pay the debt no matter what kind of season you have.”

    Wake Forest and North Carolina hired PriceWaterhouse Coopers to survey fans and determine the value and interest in premium seating. The firm is doing a similar study for Duke as it formulates a plan to build premium seating at Wallace Wade Stadium.

    “There’s a lot of work done behind the scenes before anyone comes out with what they’re going to do,” said Boo Corrigan, associate AD at Duke. “You don’t come out and say, ‘Hey, we’re going to do this, everybody jump on board.’ You have to build the excitement so that by the time a plan comes out, everyone’s already on board.”

    E.J. Narcise, principal at Team Services, works with schools to acquire naming rights and identify new revenue opportunities, through either sponsorship or premium seating. He advises administrators to have a plan for debt payments, beer and alcohol sales, displacing longtime fans, possibly relocating the band and students, and a pricing threshold that makes sense for that fan base.

    “Some stadiums get smaller in the process of adding premium seats,” Narcise said. “If you’re moving fans who never thought they couldn’t afford to see their alma mater play, that can be very contentious.”

    Print | Tags: In-Depth
  • Loge boxes provide alternative between suites and club seats

    When the 12- to 16-person suite is too large and the club seats aren’t intimate enough, the loge box might be just right.

    Loge seats at Minnesota’s new stadium feature all-
    weather televisions and space heaters.

    Tom Waggoner and 360 Architecture were on the front edge of developing four-person loge boxes at Nationwide Arena in Columbus, and as colleges turn to the pros for facility ideas, Waggoner sees this midpriced option as a hot alternative.

    Loge seats are often four-top or six-top tables with a view of the field and full access to all of the club-seat amenities. They’ve been a hot commodity at Oregon State’s renovated Reser Stadium and Minnesota’s TCF Bank Stadium. The 57 loge patrons at Minnesota have all-weather televisions and space heaters above to stay warm during late-season games.

    Other twists in premium seating have emerged. At Auburn, 360’s Waggoner worked with the school to design a new basketball arena with 12 suites that have outdoor patios facing Jordan-Hare Stadium, providing fans in those units the exterior space for tailgate parties during football season.

    “It’s a cool thing to market, something that ties into football games, but is not directly attached to the stadium,” Waggoner said.

    — Don Muret

    Print | Tags: In-Depth
  • Martin’s decision-making paid off for USOC

    In the fall of 2003, while serving as acting president of the U.S. Olympic Committee, Bill Martin stood before the board of USA Track & Field and reprimanded it for the group’s failure to rid the sport of doping. He urged it to cooperate with the USOC on the failed doping case of sprinter Jerome Young and define a strategy for eliminating performance-enhancing drugs.

    “Enough is enough,” Martin said. “We will put you on probation. We will decertify you if you don’t get your house in order.”

    The episode was vintage Martin. Like other times before, he walked into a difficult situation, took a stand and demanded that others join him. It was an approach that served him well as acting president of the USOC from 2003-04.

    “Bill was pretty courageous in his decision-making,” said Jim Scherr, the USOC’s former CEO and the current CEO of 776 Original Marketing. “He could take a stand in a difficult situation and had the courage to follow through with it.”

    The organization was in disarray when Martin took the helm. Its CEO was under scrutiny for unethical behavior, and Congress was pressuring it to reform. Martin managed to pull the organization back from the brink by building relationships with Sens. John McCain, Ted Stevens and Ben Nighthorse Campbell. He assured them that he could reform the USOC and received permission from the University of Michigan to lead that effort.

    Over the subsequent nine months, Martin led a task force that reviewed the organization’s structure, oversaw the drafting of new bylaws that reduced the board from 125 to 11 members, and avoided a congressional overhaul of the USOC. He went on to lead the organization in defining a hard stance on doping in sports.

    “He had a lot of personal credibility that he brought to the organization and he’s a very direct, frank and honest person, and that leadership style was exactly what the organization needed,” Scherr said. “He didn’t want anything more than to do his part as a leader and move on, and everyone bought into that.”

    — Tripp Mickle

    Print | Tags: In-Depth
  • Must-see attractions

    Davis Wade Stadium
    Mississippi State, Starkville
    Specs: 5,217 square feet. Produced by Capturion Network, a little-known supplier in Laurel, Miss. The 17-year-old firm also has made scoreboards for football stadiums at Rice and Southern Mississippi and the new Auburn Arena.
    Manufacturer: Capturion Network
    Gaylord Family-
    Oklahoma Memorial Stadium
    University of Oklahoma, Norman
    Specs: 5,146 square feet. Second in size in the Big 12 to Godzillatron, but installed in 2008, making it two years newer than the Longhorns’ model.
    Manufacturer: Daktronics
    Note: Stadiums dedicated specifically to college football
    Source: SportsBusiness Journal research
    Darrell K Royal-
    Texas Memorial Stadium
    University of Texas, Austin
    Specs: 7,437 square feet. Nicknamed “Godzillatron” because, of course, everything’s bigger in Texas.
    Manufacturer: Daktronics
    TCF Bank Stadium
    University of Minnesota, Minneapolis
    Specs: 5,184 square feet. The scoreboard is a big draw for the Gophers at their one-year-old facility, the Big Ten’s first new football stadium in 50 years.
    Manufacturer: Daktronics
    Neyland Stadium
    University of Tennessee, Knoxville
    Specs: 4,588 square feet. Same model as the one installed at Ralph Wilson Stadium, home of the Buffalo Bills.
    Manufacturer: Mitsubishi Electric and ANC Sports

    Print | Tags: In-Depth
  • No business as usual for new AD Brandon

    David Brandon, fresh out of the University of Michigan, was well on his way to a career as a teacher and a coach in the mid-1970s when a recruiter from Procter & Gamble called. Brandon thought the recruiter had a wrong number and nearly hung up. But the P&G rep had been turned on to Brandon by Michigan football coach Bo Schembechler, who coached Brandon for three Big Ten championship seasons. On Brandon’s first intimidating day at P&G’s Cincinnati headquarters, each of his fellow rookie hires introduced themselves as they sat in a circle. One was from the business school at Wharton, another had his MBA from Harvard. When Brandon stood, he introduced himself as a teacher and a coach from Michigan. Right away, he knew he was going to have to work a lot harder to catch up to those fellow P&G rookies.

    Not only did Brandon catch up, he sped by most of them. He later went to Valassis, an advertising agency that specializes in newspaper inserts and coupon books, and ultimately rose to CEO. In 1999, the Michigan native was named CEO at Domino’s Pizza and embarked on an 11-year run that ended this year when he became athletic director at the University of Michigan. The pay cut from a reported $3 million annually at Domino’s to about a fifth of that at U-M was never an impediment.

    David Brandon
    Age: 58
    Resides: Ann Arbor, Mich.
    Position: Athletic director, University of Michigan
    Previously: CEO, Domino’s Pizza
    Education: Bachelor of arts, communications, Michigan, 1974
    Favorite vacation spot: “We have a place in Scottsdale, Ariz., that I love. I love the desert; I love the golf. And it’s nice to have our own place so that I don’t have to pack a bag. I’d rather be there than anywhere. I’ve traveled the world — I’ve spent something like a year and a half in hotel rooms in New York, like 500 nights. I’ve been there, done that. Having a place that’s familiar to me and that I know, that’s what I like.”
    Favorite book: “‘Bo’s Lasting Lessons’ by Bo Schembechler and John Bacon is great. There’s a book written many, many years ago by a Jewish rabbi called ‘When Bad Things Happen to Good People.’ I give that to people who go through tough times. I like Ken Blanchard’s books. I quote him a lot. … One other one: ‘Flight of the Buffalo.’”
    Favorite movie: “The last movie I saw was ‘The Blind Side.’ I love that movie.”

    Staff writer Michael Smith spent a morning with Brandon in his Ann Arbor office overlooking South State Street. Here’s what he said about taking over as head of Wolverine athletics.

    SBJ: What’s keeping you the busiest these days?
    Brandon: Well, I’m completing my fifth month on the job, so I’m still in a pretty steep learning curve. I’m getting to know the team I inherited and trying to come up with an organizational design that’ll work for me. The old, “Get the right people on the bus and in the right seat” thing. It’s both interesting and challenging to come up with a design that works for me and is what I’m used to. And we’re coming up on a football season that’s going to be very important in many respects. We have the grand opening of a newly renovated stadium. We put a $226 million investment into it and we’re really happy with it, but from an operator’s standpoint, we’ve now got 81 suites to service. We’ve got club-seat patrons who have spent a whole bunch of extra money for amenities and benefits. There are a lot of new moving parts we’ve got to manage and it’s really hard to have a good dress rehearsal when you’re about to entertain 111,000 people. I’ll be glad to get that first game under our belt.

    SBJ: How do you compare where you came from at Domino’s to what you’ve found here?
    Brandon: After having been a CEO for the last 22 years, I have a certain way of thinking and doing things. Hopefully it will be very transferable, and so far it has been. Being CEO of Domino’s Pizza, to a large degree, is about building a brand. You do that with advertising, promotion, execution at retail, building stores, growing your geography. But fundamentally, it’s about building a brand as it relates to excellence in service, excellence in quality, excellence in corporate responsibility. That’s what you’re doing when you’re a CEO. When you’re director of athletics, you’re building a brand. That block M stands for something. It needs to stand for excellence in the classroom, excellence in competition, excellence in how we conduct ourselves and represent this university.

    I view this athletic department as the sales and marketing division of the university. We’re on TV every week, we send student athletes all over the world to represent the university, we bring attention to the brand. One of the years I was a regent here, we won a national championship and our applications went up 23 percent. It was for no reason other than our football team winning a championship, so I have great respect for the power of athletics. In a [$5.5] billion institution, we’re a little $100 million unit, but the power we have to extend the brand is pretty remarkable.

    SBJ: In terms of building the brand at a U-M, what are you looking at?
    Brandon: We’re looking at the depth of talent we have here on staff. How are we leveraging new channels of communication? How are we using the website? How much customer relation marketing are we doing? It’s an effort to build a strong marketing expertise that before I got here was pretty nonexistent.

    Brandon played football at
    Michigan under coach
    Bo Schembechler.

    SBJ: How is that going over?
    Brandon: Some of it is teaching. The staff here wants to grow and be a part of change and be a part of making things better. There are a significant number of people who want to grow and there are other people in a comfort zone and they want today to be like yesterday. They’re probably not going to stay here real long. I didn’t come here to preside over the status quo; I came here to grow this.

    SBJ: As you’ve reviewed your deals with partners like Adidas and IMG College, are you happy? Are there things you’d like that you’re not getting?
    Brandon: The contracts are done and a deal is a deal, so I don’t spend a lot of time with the contracts, other than to understand the mechanics. What I’m trying to manage better is the relationship. I want to have a closer working relationship where we’re communicating more and there’s clarity around expectations. I’ve spent a lot of time with Adidas and IMG and we’ve got a deal, that’s great, but what’s next? How do we turn this into something that’s great for both parties? If we’re getting our guarantee paid, but IMG is under water, that doesn’t make me happy. That’s not good. On the flip side, if they’re content and we’re content and we’re missing opportunities, that’s not good either. How do you make it grow?

    SBJ: There is a trend of outsourcing when it comes to marketing and ticket sales. What do you think about that?
    Brandon: I think it’s a trap. Outsourcing is a wonderful thing if you have someone with an expertise that extends beyond your reach. And outsourcing can be a wonderful thing in the right situation. But the trap is, OK, I’ve sold these assets to a third party and soon the business model is being driven by somebody you hardly know and you’re hoping they get it right. That’s not the way to run the railroad. There’s nothing wrong with having partnerships, but you’ve got to create the level of expectations. This sort of blind delegation and send me a check, that’s not the way to maximize those relationships.

    SBJ: So when you meet with Adidas or IMG College, what are you telling them?
    Brandon: I want to grow. I want (from IMG) double-digit increases year against year, in terms of sponsorships and leveraging all of the assets we have here. There’s a lot to be sold in 27 sports and all of these new facilities. If all we’re doing is selling the same things we’ve always sold, there’s not a lot of value-add there.

    SBJ: If it took 90-some years to get premium seating in Michigan Stadium, how long will it take to get advertising signage?
    Brandon: That’s a tough one. I subscribe to the old Sam Walton quote: “If you don’t know what to do, ask your customer.” In all the research I’ve seen, our fans have told us their disdain for going into the stadium and being bombarded with advertising. It’s a strong disdain. Is there a new revenue stream and are other stadiums taking advantage of it? Yes. Do we take advantage of it and flash commercials at people at the expense of making them angry and disappointed? I’ve found that you don’t build a brand by disappointing your customers. I’d rather find another way. … We’re going to experiment with a handheld device (Game Day Vision, formerly Kangaroo TV) that you watch the game on with people in our premium seating. You get radio, TV, replays and you can put advertising in there. It’s not in your face, but it is another medium that comes in a nontraditional way.

    Brandon greets Wolverine goalie Shawn Hunwick after
    a recent game at Joe Louis Arena.

    SBJ: To switch gears a bit, how did your leadership style evolve?
    Brandon: I’m a pretty nontraditional guy. I didn’t go to business school here. I wanted to be a teacher and a coach. When you’re here and you want to be a teacher and a coach, you tend to study Bo Schembechler. We lost one regular-season game here in my three years and won three Big Ten titles. This guy was achieving unprecedented success and I was just soaking it all in. I wanted to be like him.

    What I concluded was that this business gig wasn’t a whole lot different than coaching a team. You recruit great talent, set high expectations, have clear goals and prepare, all the things that Bo taught us that made us great. I just implemented all of those tools and concepts into what I did. The accounting and the finance, you can pick that up along the way. What I had was what Bo taught me.

    SBJ: Michigan Stadium opens with 81 suites and 3,000 club seats this season. What will premium seating do for revenue?
    Brandon: A lot. The first thing it will do is pay for the $226 million project. The first thing we had to do was put together revenue streams to pay for the debt. We put a plan together that was very conservative, with interest rates that were higher and assumed no donor support. We thought because the economic cycle at the time was really hot that we’d sell out all of the suites, but we assumed we wouldn’t. We had to make sure that this would be a cash-flow positive project and it is by a significant margin. As we pay back the debt and create incremental revenue flows, those dollars become precious for our other programs. All of those other projects to come are being driven by the financial flexibility that’s being created by the football stadium. As we sell more of the suites and club seats and eventually sell out, that will create another $4 million in revenue. When you’re a $105 million budget, that $4 million is important.

    SBJ: How often do you get reports on suite and club-seat sales?
    Brandon: Regularly. Yeah, when we sell a suite, we’re high-fiving. That’s great. Those suite holders can choose a three-year, five-year or seven-year deal and the range is $55,000 to $85,000 a year. So when somebody steps up and says we’ll take a suite for five years,that’s cha-ching, that’s terrific, that’s a big sell. … We recently had an open house and let people walk through. We didn’t serve beverages or food, it was just come on, walk through. We had close to 15,000 people go through and by the end of that week, we’d sold close to 250 club seats. We didn’t know it would be such a big marketing boom, but it tells us that as people get up there and look around, they’re going to say that they’ve got to have this. It’s a great way to watch a game.

    SBJ: Your fiscal 2011 budget is Michigan’s first over $100 million. Do you still expect a surplus and the ability to give back to the university?
    Brandon: Yes, the budget is growing. We will continue to fund all of our sports with the maximum allowable scholarships. We also do not tell our coaches where to recruit. We pay the freight if it’s an out-of-state student. And 70 percent of our student athletes come from out of state. We tell our coaches to find the best talent and if they’re out of state, we’ll pay the hefty out-of-state tuition. That’s another important investment.

    SBJ: How has U-M athletics been able to operate without subsidies and manage to run at a surplus, especially when southeastern Michigan is in the epicenter of the recession?
    Brandon: The fact that we put 110,000 people in that stadium for a football game and have for decades, the fact that we sell out hockey, the large alumni base, the passion for athletics here, it’s special. It all speaks to the power of what we have here. Economic cycles affect us with sponsorship revenues, licensing, merchandising revenues. It’s not that we’re impervious to down cycles. But the fundamental guts of this business are people filling up that stadium and investing in this program with their gifts. We’ve persevered through this storm in a healthy way. The business of Michigan athletics is quite good, despite the economy around us being so tough.

    Print | Tags: In-Depth
  • Passing the torch

    On Sept. 4, Bill Martin will settle into one of the premium seats that he planned at the newly renovated “Big House,” watch his University of Michigan football team play Connecticut, and then clock out for the final time.

    It will be a fitting scene from which the Wolverines will send off the man who guided their athletic department the past 10 years. Coming from the private sector as a real estate developer and banker, Martin took a nontraditional route to become Michigan’s AD in 2000, only to rescue one of the proudest and richest athletic programs in the country.

    Truth is, he didn’t even want the job, accepting it only after former university President Lee Bollinger and staffers in the athletic department talked him into moving from interim AD and taking the post permanently. He proved to be exactly what the school needed during troubled times.

    Martin (left) chats with his successor.

    Martin announced his retirement last year and David Brandon, the former Domino’s Pizza CEO, was named as his replacement earlier this year, but Martin has stayed on as a special aide to university President Mary Sue Coleman until his final day on Sept. 4.

    His legacy as Michigan’s AD will be his work on facilities, which were called an embarrassment, and the athletic budget, which one insider described as a “financial cesspool” when Martin arrived. His business acumen helped turn a $3 million deficit into a balanced budget in less than two years, and lucrative guaranteed contracts with IMG College and first Nike, then Adidas, have helped U-M’s budget run at a surplus, even as the recession has ravaged that part of the country.

    Martin’s real estate background also proved beneficial as he worked from one facility upgrade to another, touching 13 projects at a total cost of $350 million.

    And when the Big Ten’s new TV network ran into stormy seas at launch in 2007, Martin, a veteran sailor who helped turn around the U.S. Olympic Committee (see related story, page 25), was integral in keeping the conference’s ADs on board with the venture.

    “He was one of the guys that kept everyone’s spirits up,” said Jim Delany, commissioner of the Big Ten. “He’s a true leader. From his business background, he had been around big projects, so he knew the ups and downs along the way. That experience was very beneficial for us at a time when we needed it.”

    Martin didn’t get every call right. The jury is out on his most visible hire, football coach Rich Rodriguez, who has been a constant source of controversy since taking the U-M job in 2008. Rodriguez’s buyout from West Virginia became a public mess, and an ongoing NCAA investigation has cast a cloud over the program.

    But Martin’s body of work will be rooted in the kinds of things that fans don’t cheer for, like healthy budgets and heady facility planning that brought one of the nation’s elite programs into a new era of athletics.

    Tackling tradition

    For all of the nuts and bolts work he did to get U-M athletics back on solid ground, Martin will forever be tethered to the $226 million renovation to Michigan Stadium.

    Martin’s work on budgets and facility
    planning brought Michigan into a new
    era of athletics.

    It was 2006 when Martin initiated the planning, and the outcry from Michigan’s old guard was deafening. What proved to be Martin’s greatest accomplishment started out cloaked in controversy.

    “There was a lot of kicking and screaming,” said Percy Bates, U-M’s faculty athletic representative who has been at the school for 40 years. “I still think there are people around who, even though it’s now completed, are holding on to their old views. That old oval was simply stated, simply done, and it represented Michigan for a lot of people. It wasn’t fancy or glossy, just good.”

    A website called savethebighouse.com was born and stories, both locally and nationally, chronicled and often criticized the addition of premium seating. The thought of adding suites and club seats to that old collection of bleacher seats was unimaginable.

    “The stadium represented a crossroads for a lot of people; it represented moving into a new era,” Bates said. “But how long can you hang on?”

    It was in the face of this firestorm that Martin marched on with his plans.

    For $226 million, U-M could bring the stadium into that new era of design with suites that feature granite countertops, flat-panel TVs and leather chairs. The old bowl stadium used to have one elevator. Now it’s got 19.

    But Martin also knew the $15 million in new revenue from sales of premium seating would boost the U-M budget for years to come and help secure its future. Sixty-three of the 81 suites are sold and more than 80 percent of the 3,000 club seats have been bought. The remaining inventory represents another $4 million in potential revenue.

    “People fear the worst,” Martin said. “I’ve been through this so many times with commercial projects that are close to residential areas. There’s a real fear of change, so you need to work with people. I went around like a politician, talking to alumni groups to show them what we’re going to do. In the real estate development world, I had to go before community groups, planning commissions, historic building commissions. I had 25 years-plus of dealing with approvals. This was not foreign to me.

    “People had to understand that the stadium was functionally obsolete. We had safety challenges, we had to improve the handicapped seating, our concourses were too narrow.”

    The turning point was a study of season-ticket holders executed by Coldwater Corp., a research and analysis firm in Ann Arbor run by Mary Lukens, a longtime business associate of Martin’s. The study showed that U-M’s key customers weren’t opposed to the premium seating after all. All of the objections were coming from fans who rarely bought tickets.

    “When we got the information back, I ran right past his assistant and into Bill’s office to show him the results of the survey,” Lukens said. “His jaw dropped. The people who were the real customers, the ones who buy tickets year after year and leave them in their will, thought the premium seating was great.”

    The alternative was to spend $80 million for renovations without adding premium seating. That would have widened the seats, concourses and aisles, and brought the stadium into full compliance with Americans with Disabilities Act guidelines. In the end, however, those changes also would have reduced capacity by about 5,000 seats.

    Having the biggest football stadium in the country has always been a point of pride to the Wolverines and Martin wasn’t about to be the AD who reduced capacity.

    With the new changes, capacity will be 111,000, keeping the stadium the largest in the nation.

    “Listen, I knew I had a steep learning curve when I came in,” Martin said. “I didn’t even know what compliance meant when I started. But there were business challenges surrounding athletics and that’s an area I know.”

    “Midas Martin”

    Martin’s 10 years at Michigan proved to be a game-changer for the athletic department, but it’s just a stamp in his well-worn passport of business experiences. The Michigan MBA grad was known throughout Ann Arbor for founding First Martin Corp., a highly successful commercial real estate development company, in 1968.

    With that company well-rooted in Ann Arbor, Martin took on a new venture in 1995. Turned off by the clumsiness of the national banks in town that lacked any savvy or knowledge of the local market, he co-founded the Bank of Ann Arbor with Peter Fletcher, a longtime friend and business associate. The bank now manages assets of $1 billion and has opened multiple branches in the area.

    “I call him ‘Midas Martin’ because everything he touches turns to gold,” said Fletcher, a friend and business associate for close to 30 years. “When he went into the athletic department, the budget was a financial cesspool.

    Early into his stint at Michigan, Martin helps break
    ground for a new academic center.

    “Michigan athletics are very proud that they don’t take subsidies from the university and Bill made sure it was self-supporting. When you walk through campus, you won’t see his name on any buildings and he wouldn’t want it, but it should be.”

    One of the reasons Martin was selected to be the interim AD after Tom Goss’ departure (Goss was under pressure from budget problems and an NCAA basketball investigation) was because of his business successes and his stature in the community. He was known for his generosity with local charities and his ability to raise money, which has to be a core competency for an AD.

    In the 1980s, when his two children were in school, Martin founded a group called “Citizens for Better Education,” which helped several board of education candidates get elected.

    Getting the work done
    Highlights of sports facility projects under Bill Martin
    Completed projects Regent approval Project budget (millions) Pledged gifts (millions)
    Football locker room and event center Nov. 2002 / July 2004 $7.5 $7.1
    Academic center March 2003 $12.0 $13.2
    Softball stadium Sept. 2005 $5.5 $1.2
    Baseball stadium Sept. 2005 $9.0 $8.8
    Renovation of Hartwig Administration Building / Ticket office April 2006 $3.5
    New field house April 2007 $26.1 $11.6
    New soccer fields April 2007 $2.8
    Michigan Stadium May 2006 $226.0 $28.0
    Wrestling practice facility May 2008 $5.5 $3.4
    Projects in progress
    Basketball practice facility Jan. 2009 $23.2 $2.0
    Soccer Phase 2 May 2009 $6.0 $1.5
    Crisler Arena infrastructure, Phase 1 Jan. 2010 $20.0
    Golf practice facility May 2010 $2.5 $0.5
    Total approved projects $349.6 $77.3
    Source: University of Michigan

    “Bill never wants anyone to know, he wants no credit, no applause, but he has been so supportive of this community,” Fletcher said. “He’s supported a children’s hospital, local education, police and fire. Right after 9/11 he began a fundraiser to send money to those who had lost a family member in the New York fire or police.”

    That business background proved handy as Martin began to tackle some of U-M’s facility problems. Design firm HNTB worked with Martin in the early 2000s to create a master plan for an overhaul of those facilities.

    In addition to the changes at Michigan Stadium, Martin initiated a $23 million plan to renovate the aging and dark basketball facility, Crisler Arena. That project has been handed off to Brandon.

    Martin didn’t stop with football and basketball. He raised millions more for new baseball, softball and soccer stadiums, as well as practice facilities that are second to none. Golf and wrestling saw improvements as well.

    “The facilities were embarrassing. Things were in shambles,” Lukens said

    “I know the cost to build things,” Martin said. “I know how to deal with architects. There’s a wonderful old William Cole painting from the 19th century that shows an architect overseeing this vast project. Every time I start a project, I show the architect that painting and say, ‘See this guy with the plans? That’s me, not you. I’ll call the shots.’ I think I just knew how to right-size the projects and keep them financially feasible and consistent with the rest of campus.”

    Vision of the future

    Bill Martin is no lifer. He never dreamed of being an athletic director and as soon as he thought his work was done — when the changes to Michigan Stadium were completed — he got out.

    But he also couldn’t say no when those around him begged him to take the job full time in 2000, even though he had no intention of staying after serving six months as interim AD.

    In 1999, after the forced departure of Goss, and with the NCAA breathing down the neck of the basketball program, the Wolverines needed a steadying force. Bollinger, now the president at Columbia University, went to Martin and asked if he would be the school’s interim AD.

    OK, Martin said, for six months. Not a day longer. And he wouldn’t accept a paycheck. This is how Martin thought he would give back to the school that sent him on his way to a successful business career.

    What he found was an upside-down budget and staff morale that was almost as depressing as the aging, poorly kept buildings that didn’t reflect the prominent reputation of athletics there.

    “I was shocked at what I found, frankly,” Martin said. “We had to bring revenues and expenses in line. Letters came into the department from people who said they wouldn’t give because things were in such a mess. People were unhappy.”

    Martin began implementing cost-containment measures, he renegotiated the radio contract and eliminated a failed Internet venture that cost the department close to $1 million. He made difficult decisions, such as eliminating senior staff from a top-heavy administration.

    “He showed us a vision for what it was going to take,” said Greg Harden, a longtime associate AD at Michigan. “We thought, ‘Here’s a guy who can hold it together.’ He did more than build buildings here; he provided a sense of what it took to sustain an organization and how to plan around that.”

    Martin wasn’t completely bereft of athletic knowledge. He had run the U.S. Sailing Association in the late 1980s and early ’90s, and through that national governing body, had taken a seat on the board of the U.S. Olympic Committee.

    Unbeknownst to Martin, a petition circulated in the Michigan athletic department and those signatures from staffers and coaches were presented to Bollinger as an appeal to keep Martin in the job permanently. They wanted Martin for the direction he had already set, and they knew his background as a competitive sailor would help lift the profile of Olympic sports on campus. When Martin was told about the petition, he couldn’t tell them no.

    “I knew what it was going to take to fix the place, I knew the challenges that were ahead,” Martin said. “It would take a while for a new person to come in and figure it out. I just hated to see us [Michigan] continue like we had.”

    Martin was always a Michigan man. He didn’t serve on national committees and he didn’t seek the kind of national profile normally associated with the AD at a program of Michigan’s stature. He just wanted to do what he was hired to do — get the business of Michigan athletics back on track — and return to the private sector. He’ll spend the next several months backing Republican Rick Snyder in a run for governor and, who knows, there might even be a post for Martin if Snyder wins.

    “What’s the legacy? I don’t know,” Martin said. “I just ask if I left it in better shape than I found it. I think I did.”

    Print | Tags: In-Depth
Video Powered By - Castfire CMS Powered By - Sitecore

Report a Bug