Montana AD Talks FCS Finances

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Montana AD Talks FCS Finances

Post by TexasTerror »

I am not sure how many of you saw this on MontanaGrizzlies.com. The athletic director posted a note on their official web site regarding ticket renewal and more particularly, why the $$$ is due early.

I am going to include some of the more interesting points and we can go forward with discussion from there, link at the bottom...
With increasing economic concerns, athletic departments across the country are seeking ways to determine more accurate numbers to keep them out of deficit. One way is to move up ticketing renewal dates.
Our football program brings in approximately $6.5 million per year in revenue through various funding sources (ticket sales, GSA contributions, corporate sales, etc.). The cost to run the program is $6.5 million, so it essentially breaks even. Every other school at the Football Championship Subdivision level loses money, thus causing university officials across the country to look closely at their programs. Many are losing in the neighborhood of $4 to $6 million per year.
In the past two months, Northeastern and Hofstra have announced they are dropping their football programs. There is high speculation other schools may follow. Our goal is to do our best to generate the most revenue possible and to use as little of the state/institutional support as possible. This is a challenge, but with the continued support of our dedicated fan base who go the extra mile to support the program, we can continue the fine tradition that has been established over the years.
http://www.montanagrizzlies.com/pages/n ... 8648&m=175
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Re: Montana AD Talks FCS Finances

Post by danefan »

I hate when people say that schools lose money on football.

No one is losing money. It may be an investment into something that may not create a fiscal return. But to say its a loss is just wrong, IMO.
Last edited by danefan on Fri Jan 22, 2010 12:57 pm, edited 1 time in total.
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Re: Montana AD Talks FCS Finances

Post by DJH »

danefan wrote:I hate when people say that schools lose money on football.

No one is losing money. Its may be an investment into something that may not create a fiscal return. But to say its a loss is just wrong, IMO.
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Re: Montana AD Talks FCS Finances

Post by TexasTerror »

danefan wrote:I hate when people say that schools lose money on football. No one is losing money. It may be an investment into something that may not create a fiscal return. But to say its a loss is just wrong, IMO.
Dollars and cents...

At the end of the day, some athletic directors could get the axe or sports could get cut off for not having a balanced budget as it relates to the revenues and expenses specifically of a college athletic department.

We all understand the "soft money" that athletics generates - particularly as far as free advertisement for a school in the local, regional and national media. However, it is a business and the ADs have to work by the revenues and expenses that they are given.
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Re: Montana AD Talks FCS Finances

Post by Ursus A. Horribilis »

danefan wrote:I hate when people say that schools lose money on football.

No one is losing money. It may be an investment into something that may not create a fiscal return. But to say its a loss is just wrong, IMO.
Dane, you can call it whatever you want but the bottom line is that if the investment(or loss) becomes too great then it will go away. It is kinda tough to tell how much of the investment can be attributed to the schools profile and so forth so for the avg. fan it is probably best explained as a "loss" to dramatize to the fans that they are needed and the money is needed to stay afloat.
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Re: Montana AD Talks FCS Finances

Post by GannonFan »

danefan wrote:I hate when people say that schools lose money on football.

No one is losing money. It may be an investment into something that may not create a fiscal return. But to say its a loss is just wrong, IMO.
I don't understand that nuance - if you invest something (money) and don't get a return, that's still a loss of what you invested (money in this case). A University, on the whole, still needs to make some money, or at least cover their costs. Football is just one aspect of a University - if they lose money there, they have to make it up somewhere else. Same goes for an Engineering program or anything else the school does.
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Re: Montana AD Talks FCS Finances

Post by danefan »

GannonFan wrote:
danefan wrote:I hate when people say that schools lose money on football.

No one is losing money. It may be an investment into something that may not create a fiscal return. But to say its a loss is just wrong, IMO.
I don't understand that nuance - if you invest something (money) and don't get a return, that's still a loss of what you invested (money in this case). A University, on the whole, still needs to make some money, or at least cover their costs. Football is just one aspect of a University - if they lose money there, they have to make it up somewhere else. Same goes for an Engineering program or anything else the school does.
The nuance is that people make it sound like its nothing more than an expenditure and the University gets absolutely nothing back its expense. Football at a university means so much more than $$$ and Cents.

I know its the common thought process and I understand that the AD is resposnible for balancing the athletic budget. My point is that when you boil down a football (or athletics program) to nothing more than $$$ and cents you are missing an awful lot.
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Re: Montana AD Talks FCS Finances

Post by kemajic »

O'Day works for a president that uses the FB program as a cash generator. While O'Day cites a balanced budget, it is under some special tricks from the president's accounting system, like:

1. Scholarships are booked to the AD at full price, including out-of-state; not incremental, when in fact, no other professors are hired or other investments made that are not covered by the AD, due to adding 63 student athletes.
2. All concession profits at the games go to the food service, not to the AD.
3. All profits from gear sales and logo licence go to the bookstore, not to the AD. Montana is in the top 60 universities in this dept.
4. With all this, the Montana FB averages a surplus; O'Day selected a year where he claims it's balanced. Any surplus is not mananged by the AD, it's managed by the admin., not returned to the AD or to the customers. Yet coaches have low salaries, non-cash generating facilities are substandard and the FB schedule is weak, designed for home game profitability, not fan interest.

I suspect many other presidents have similar tricks. But Montana averages 25,000 a game with high ticket prices (higher than many FBS programs); it's easy to see that most FCS programs produce a lot of red ink.
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Re: Montana AD Talks FCS Finances

Post by GannonFan »

kemajic wrote:O'Day works for a president that uses the FB program as a cash generator. While O'Day cites a balanced budget, it is under some special tricks from the president's accounting system, like:

1. Scholarships are booked to the AD at full price, including out-of-state; not incremental, when in fact, no other professors are hired or other investments made that are not covered by the AD, due to adding 63 student athletes.
2. All concession profits at the games go to the food service, not to the AD.
3. All profits from gear sales and logo licence go to the bookstore, not to the AD. Montana is in the top 60 universities in this dept.
4. With all this, the Montana FB averages a surplus; O'Day selected a year where he claims it's balanced. Any surplus is not mananged by the AD, it's managed by the admin., not returned to the AD or to the customers. Yet coaches have low salaries, non-cash generating facilities are substandard and the FB schedule is weak, designed for home game profitability, not fan interest.

I suspect many other presidents have similar tricks. But Montana averages 25,000 a game with high ticket prices (higher than many FBS programs); it's easy to see that most FCS programs produce a lot of red ink.
All that is great, and for programs like Montana or Delaware or Appy St, they certainly make money if you realistically look at the budgets. However, for many schools, even if you only look at the hard costs of scholarships (say only the room and board component), and even if the program gets back every concession/parking/merchandise/marketing dollar they directly earn, they would still lose substantial money on football. With that said, football doesn't necessarily need to make money for the school (just like how women's tennis teams don't have to make money for the school) but in the end, that's a decision by a school whether it's fine or not to lose money on football. But irregardless of the accounting, many, many schools, especially at the FCS level, lose money playing football.
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Re: Montana AD Talks FCS Finances

Post by BlackFalkin »

THER IS NO WAY, it takes 6 mill to run an fcs program. :ohno:
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Re: Montana AD Talks FCS Finances

Post by danefan »

BlackFalkin wrote:THER IS NO WAY, it takes 6 mill to run an fcs program. :ohno:
They reported $4.2 million for the 2008-2009 year.
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Re: Montana AD Talks FCS Finances

Post by putter »

Do any of these schools run a cash flow....????? :evil:
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Re: Montana AD Talks FCS Finances

Post by kemajic »

danefan wrote:
BlackFalkin wrote:THER IS NO WAY, it takes 6 mill to run an fcs program. :ohno:
They reported $4.2 million for the 2008-2009 year.
You can do a lot with university accounting systems, depending on your philosphy. For example, in the previous post I didn't mention that the AD has to pay off the the capital of the last stadium expansion within 5 years, so there is that payment tied onto the AD as well.
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Re: Montana AD Talks FCS Finances

Post by Mvemjsunpx »

danefan wrote:
BlackFalkin wrote:THER IS NO WAY, it takes 6 mill to run an fcs program. :ohno:
They reported $4.2 million for the 2008-2009 year.
I'm guessing the $6.5 million number includes a chunk of the stadium expansion costs.
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Re: Montana AD Talks FCS Finances

Post by CAA Flagship »

danefan wrote:
GannonFan wrote:
I don't understand that nuance - if you invest something (money) and don't get a return, that's still a loss of what you invested (money in this case). A University, on the whole, still needs to make some money, or at least cover their costs. Football is just one aspect of a University - if they lose money there, they have to make it up somewhere else. Same goes for an Engineering program or anything else the school does.
The nuance is that people make it sound like its nothing more than an expenditure and the University gets absolutely nothing back its expense. Football at a university means so much more than $$$ and Cents.

I know its the common thought process and I understand that the AD is resposnible for balancing the athletic budget. My point is that when you boil down a football (or athletics program) to nothing more than $$$ and cents you are missing an awful lot.
I agree. The "FCS football loses money" talk has been around for a long time. Why do you think Old Dominion started football? It wasn't because they wanted to freely educate 63 young men. It is part of a massive makeover. In a nutshell, it is called marketing. Over the last 10 years, the campus added an indoor tennis facility, new recreation center, 6 dorms, basketball arena, a mixed use village with apartments, hotel and retail establishments, a 9 hole golf course, and a football program.

Schools are in the business of attracting students. The better the demand, the more you can charge for tuition. The quality of the students and professors get better. Alumni connectivity is maintained, along with an increase in donations. It's a snowball effect. Yes there is a budget. But if the money doesn't work out on the "football" line item, there are a number of non-sports related line items you can point to that offset the loss. Old Dominion was never "whole" without football. Yes we are all proud of our basketball teams and 28 team national championships across our athletic program. But we were losing ground in our academic recruiting to other Virginia schools. Academic scholarships were necessary to attract the better students. With all of the upgrades, the thought is that demand will increase to the point that tuition can be increased and less scholarship money will be needed to attract better students. FCS football is a small part of the big picture.
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Re: Montana AD Talks FCS Finances

Post by BlackFalkin »

Mvemjsunpx wrote: I'm guessing the $6.5 million number includes a chunk of the stadium expansion costs.
Ok well that expansion added SEATS, those SEATS should be paying for the expansion costs. (ROI) How are they having trouble running the program when they average 20+ fans/game and an average of 6 (non ncaa controlled) home games/year?
24,000 (avg home att.) x 60.0 (or whatever the avg ticket cost is) = X
Multiply X by number of home games; 6 on average.... I get 8 Mill, not including the markup on the hotdogs t shirts and other crap. BOTTOM LINE, UM FOOTBALL PROBABLY BRINGS IN 9MILL/YEAR.Therefor, UM's FCS football budget should be between 4.5-5Mill/year. :ugeek:
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Re: Montana AD Talks FCS Finances

Post by JohnStOnge »

I don't think that it's true that every other FCS school in the country loses money on its football program. Here, for example, is a Louisiana Legislative Auditor's report on the McNeese athletic program for the fiscal year ending June 30, 2008:

http://app1.lla.state.la.us/PublicRepor ... 00ABD2.pdf

I see no indication that the football program lost money, for that fiscal year at least. And I have to wonder if programs like Appalachian State and Delaware are losing money as well.
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Re: Montana AD Talks FCS Finances

Post by UAalum72 »

JohnStOnge wrote:I don't think that it's true that every other FCS school in the country loses money on its football program. Here, for example, is a Louisiana Legislative Auditor's report on the McNeese athletic program for the fiscal year ending June 30, 2008:

http://app1.lla.state.la.us/PublicRepor ... 00ABD2.pdf

I see no indication that the football program lost money, for that fiscal year at least. And I have to wonder if programs like Appalachian State and Delaware are losing money as well.
"Direct institutional support" of over $253,000 counts as revenue, so the university is paying itself that amoutn?
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Re: Montana AD Talks FCS Finances

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BlackFalkin wrote: Ok well that expansion added SEATS, those SEATS should be paying for the expansion costs. (ROI) How are they having trouble running the program when they average 20+ fans/game and an average of 6 (non ncaa controlled) home games/year?
24,000 (avg home att.) x 60.0 (or whatever the avg ticket cost is) = X
Multiply X by number of home games; 6 on average.... I get 8 Mill, not including the markup on the hotdogs t shirts and other crap. BOTTOM LINE, UM FOOTBALL PROBABLY BRINGS IN 9MILL/YEAR.Therefor, UM's FCS football budget should be between 4.5-5Mill/year. :ugeek:
:coffee:
If you read previous posts, I have indicated some ways in which Montana FB revenue is slickly diverted by the UM president's accounting. The AD gets nothing from concessions and logo/gear sales, has to pay the expansion capital off within 5 years, and is booked full cost, not incremental for scholarships. Also, a portion of the attendance is allocated to students at no/low cost and $60 is on the high side for an average. Also, the net balance sheet for the playoffs is negative; the NCAA controls the receipts to pay their bills. Everyone loves the playoffs, but they cost more than they make. The Montana FB program is a gold mine, but I doubt an FCS FB program can make money at 10,000 average attendance @ $15. Many draw much less; only two BSC programs draw an average above.
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Re: Montana AD Talks FCS Finances

Post by TexasTerror »

UAalum72 wrote:"Direct institutional support" of over $253,000 counts as revenue, so the university is paying itself that amoutn?
Direct institutional support means that the university is paying money to help support athletics - that they are helping a school balance their budget by filling in the hole(s).

The one thing that hurt New Orleans and there is some discussion on this board already is that the school pulled general fund support, which meant the department relied solely on the student fee, plus any revenue they could get elsewhere (tickets, guarantee games, etc).
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Re: Montana AD Talks FCS Finances

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kemajic wrote:
BlackFalkin wrote: Ok well that expansion added SEATS, those SEATS should be paying for the expansion costs. (ROI) How are they having trouble running the program when they average 20+ fans/game and an average of 6 (non ncaa controlled) home games/year?
24,000 (avg home att.) x 60.0 (or whatever the avg ticket cost is) = X
Multiply X by number of home games; 6 on average.... I get 8 Mill, not including the markup on the hotdogs t shirts and other crap. BOTTOM LINE, UM FOOTBALL PROBABLY BRINGS IN 9MILL/YEAR.Therefor, UM's FCS football budget should be between 4.5-5Mill/year. :ugeek:
:coffee:
If you read previous posts, I have indicated some ways in which Montana FB revenue is slickly diverted by the UM president's accounting. The AD gets nothing from concessions and logo/gear sales, has to pay the expansion capital off within 5 years, and is booked full cost, not incremental for scholarships. Also, a portion of the attendance is allocated to students at no/low cost and $60 is on the high side for an average. Also, the net balance sheet for the playoffs is negative; the NCAA controls the receipts to pay their bills. Everyone loves the playoffs, but they cost more than they make. The Montana FB program is a gold mine, but I doubt an FCS FB program can make money at 10,000 average attendance @ $15. Many draw much less; only two BSC programs draw an average above.
Maybe no BSC program can make money at 10,000 average, but keep in mind all the east coast teams travel expenses are considerably less than us out West.
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Re: Montana AD Talks FCS Finances

Post by kemajic »

TexasTerror wrote:
UAalum72 wrote:"Direct institutional support" of over $253,000 counts as revenue, so the university is paying itself that amoutn?
Direct institutional support means that the university is paying money to help support athletics - that they are helping a school balance their budget by filling in the hole(s).

The one thing that hurt New Orleans and there is some discussion on this board already is that the school pulled general fund support, which meant the department relied solely on the student fee, plus any revenue they could get elsewhere (tickets, guarantee games, etc).
In many cases, it is in the form of scholarships, which are pretty much incremental for the school.
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Re: Montana AD Talks FCS Finances

Post by putter »

AZGrizFan wrote:
kemajic wrote: If you read previous posts, I have indicated some ways in which Montana FB revenue is slickly diverted by the UM president's accounting. The AD gets nothing from concessions and logo/gear sales, has to pay the expansion capital off within 5 years, and is booked full cost, not incremental for scholarships. Also, a portion of the attendance is allocated to students at no/low cost and $60 is on the high side for an average. Also, the net balance sheet for the playoffs is negative; the NCAA controls the receipts to pay their bills. Everyone loves the playoffs, but they cost more than they make. The Montana FB program is a gold mine, but I doubt an FCS FB program can make money at 10,000 average attendance @ $15. Many draw much less; only two BSC programs draw an average above.
Maybe no BSC program can make money at 10,000 average, but keep in mind all the east coast teams travel expenses are considerably less than us out West.[/quote]

I would agree with that. I highly doubt any school can not look at the cost of scholarships, coaching salaries, and travel every year and come up with a break even point for the program (or any program for that matter). How many FCS schools charge $50 for a game? This year, Griz fans get the pleasure of doing that twice (Homecoming and MSU). I find it very difficult to imagine Montana losing money in the years that Griz/Cat is in Missoula. Yes, Dennison takes the money out of the football program into the general fund but he is not the only one. Schools just have to be honest about where their programs stand as far as losing money for their schools comparing the revenue that is generated vs. the expense of that particular sport.
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Re: Montana AD Talks FCS Finances

Post by kemajic »

putter wrote: I would agree with that. I highly doubt any school can not look at the cost of scholarships, coaching salaries, and travel every year and come up with a break even point for the program (or any program for that matter). How many FCS schools charge $50 for a game? This year, Griz fans get the pleasure of doing that twice (Homecoming and MSU). I find it very difficult to imagine Montana losing money in the years that Griz/Cat is in Missoula. Yes, Dennison takes the money out of the football program into the general fund but he is not the only one. Schools just have to be honest about where their programs stand as far as losing money for their schools comparing the revenue that is generated vs. the expense of that particular sport.
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Re: Montana AD Talks FCS Finances

Post by travelinman67 »

CAA Flagship wrote:
danefan wrote:
The nuance is that people make it sound like its nothing more than an expenditure and the University gets absolutely nothing back its expense. Football at a university means so much more than $$$ and Cents.

I know its the common thought process and I understand that the AD is resposnible for balancing the athletic budget. My point is that when you boil down a football (or athletics program) to nothing more than $$$ and cents you are missing an awful lot.
I agree. The "FCS football loses money" talk has been around for a long time. Why do you think Old Dominion started football? It wasn't because they wanted to freely educate 63 young men. It is part of a massive makeover. In a nutshell, it is called marketing. Over the last 10 years, the campus added an indoor tennis facility, new recreation center, 6 dorms, basketball arena, a mixed use village with apartments, hotel and retail establishments, a 9 hole golf course, and a football program.

Schools are in the business of attracting students. The better the demand, the more you can charge for tuition. The quality of the students and professors get better. Alumni connectivity is maintained, along with an increase in donations. It's a snowball effect. Yes there is a budget. But if the money doesn't work out on the "football" line item, there are a number of non-sports related line items you can point to that offset the loss. Old Dominion was never "whole" without football. Yes we are all proud of our basketball teams and 28 team national championships across our athletic program. But we were losing ground in our academic recruiting to other Virginia schools. Academic scholarships were necessary to attract the better students. With all of the upgrades, the thought is that demand will increase to the point that tuition can be increased and less scholarship money will be needed to attract better students. FCS football is a small part of the big picture.
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