U-M and MSU buck nationwide trend of athletics cuts

Gregg Krupa / The Detroit News

Among the enduring values of the state of Michigan is that athletic participation and accomplishment on campus are eminently worthwhile pursuits.

The long-standing, national leadership of sports programs at the University of Michigan and Michigan State University, especially, are largely taken for granted and are sources of pride. But, nationally, the financial health of athletics increasingly is at risk. A significant number of universities and athletic conferences are reducing opportunities for student athletes. A national survey of major college presidents released recently by the Knight Commission on Intercollegiate Athletics revealed that less than 25 percent believe the current methods of financing athletics are sustainable, and 48 percent anticipate losing varsity sports.

In Michigan, however, even as other necessary and time-honored activities are jeopardized, if not permanently changed, during the long, deep recession, Michigan State and Michigan officials are keeping sports programs intact.

Can both emerge unscathed?

The answer, by and large, appears to be yes.

The Wolverines and Spartans remain entirely immune from any elimination of sports. Despite a huge, previously scheduled agenda of capital improvements in Ann Arbor and a 10 percent cut across the board in spending in East Lansing that largely affects support and administrative functions, athletics at both universities mostly are thriving.

Such is the degree of success at keeping economic hardship at bay in sports on both campuses that it raises the question of whether major intercollegiate athletics in Michigan is recession-proof.

"I don't know for sure. We'll find out over time," said Jason Winters, chief financial officer of the Michigan athletic department, running an operating surplus of $8.8 million for the current fiscal year, on revenues of $94.4 million and expenditures of $85.6 million. "Hopefully, the economy will improve, our football team will improve at the same time and we won't have to worry about that."

'Prime climate' for action

Despite the economy and sudden decline of the cash cow last year, the worst season in the history of Michigan football, this year will almost certainly bring a 10th consecutive budget surplus, since a few deficits harried the athletic department up until 1999-2000.

At Michigan State, once the budget was balanced last year, administrators enforced a 10 percent across-the-board cut in spending for this year. Part of the goal of the current $74.4 million budget is to preserve the sports experience for the athletes.

"Our intent is: Let's do nothing that has a negative impact on student athletes and a minimal impact on customer services," said Mark Hollis, athletic director at Michigan State. "So, we have 25 programs and we are maintaining them. In the Southeastern Conference, in comparison, there is an average of only 17 or 18."

In the NCAA, about a dozen schools dropped 29 programs in the last academic year. Before his death earlier this year, Myles Brand, the NCAA president, said only a half-dozen institutions generated net positive revenue, consistently, over the last decade, and 94 of the 119 schools that field a Football Championship Subdivision team -- formerly Division I-A -- were running operating deficits averaging $10 million.

In March, the group of college presidents, athletic administrators, faculty and observers, reported that declining revenues will not keep pace with runaway expenditures, and a crisis in the finances of college athletics is likely to persist, even after the recession.

"The struggling economy presents a prime climate for all stakeholders in college sports to take action," said R. Gerald Turner, president of Southern Methodist University.

Revenue-sharing touted

The Knight Commission on Intercollegiate Athletics last month released the major findings of a survey of university presidents on the financial state of college athletics. Sixty-two percent called for a major overhaul in revenue sharing, so that smaller schools get more money; 85 percent said head football and basketball coaches are paid far too excessively; 64 percent want to reduce the number of games for so-called non-revenue sports.

In that context, the attention to detail in reducing costs in Ann Arbor and the somewhat more robust efforts in East Lansing seem relatively minor.

Michigan joined Ohio State this year in eliminating printed media guides, shipping similar information via the Internet. At Michigan State, the goal of "paperless press boxes," is becoming reality, and the school eliminated a pregame meal for media.

Basketball coach Tom Izzo and football coach Mark Dantonio, along with the rest of the coaches at Michigan State, have been asked to participate in more fundraising events for athletics, even at the risk of cutting back on some of the numerous charity events that often tie up their schedules.

At Michigan, some sports like soccer and field hockey participate in exhibition games in the offseason. Coaches have been asked to reduce costs by limiting overnight stays, for example, when scheduling those games.

But despite the disastrous 2008 football season at Michigan, season tickets were renewed at a rate of about 96 percent, barely off the traditional rate of about 98 percent, Winters said. Meanwhile, the big push to have 100 percent of the new suites and club seats in the expanded Michigan Stadium sold by September 2010 appears to be well on its way to success, he said. By late summer, 70 percent of the seats were sold.

Even the Michigan men's basketball team, long a source of disappointment and lagging attendance in Crisler Arena, is faring better. Some 2,000 student-season tickets were sold, a 400 percent increase over last year.

Coupled with major initiatives, like the $86 million sale of all marketing rights for Michigan athletics, with the exception of apparel, through 2020 to IMG College, Winters said the revenue stream currently is secure. It staves off any serious consideration of selling naming rights, at least for the time being, in Ann Arbor.

There has been no talk, so far, of delaying major capital improvement projects. The Board of Regents this year approved the design of the $23 million, 57,000-square-foot Basketball Player Development Center, which is expected to rise adjacent to Crisler Arena in 2011. Next, Crisler is slated to be renovated.

In East Lansing, the somewhat more robust attempts to reduce costs have led to the regionalization of the football schedule, with Michigan State playing Central, Eastern and Western Michigan on a rotating basis the next 12 years.

Hollis also said all coaches were asked to coordinate recruiting schedules to cut down on air fares. Foreign travel, which some teams had planned mostly for exhibition games and goodwill tours, was eliminated.

Travel to professional conferences is approved mostly when it's required for certifications.

But, in large part, the 10 percent spending cut this year is accomplished with little impact on the student athletes or fans, officials said.

"In term of the savings, we were proactive," Hollis said. "We got started on this 10 percent reduction even before we heard that it was going to be done, university-wide."