Montana AD Talks FCS Finances

[GOKATS]

I just read that George Dennison is retiring as um pres. in August. A bit off topic, but a change in administration can alter things down the road.

[blukeys]

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.

Great Points above!

Let's state the obvious. If Montana is only breaking even then every other FCS team needs to fold up shop. The argument that football can't make money comes from the fallacy that the scholarship costs of FCS football actually decrease revenue to the institution. As kemajic points out in his post, schools such as Montana (Delaware does the same thing) make the accounting argument that allowing a football player to take a scholarship reduces income by the total amount of the tuition, room, and board. This assumes the ludicrous proposition that allowing a football player on campus bumps a paying student out of the school. The truth is this doesn't happen. 63 additional students incurs no additional cost to an institution that educates 15,000 + undergrads. Certainly there are no more Professors and the cost of room and board for these additional students is well below the costs associated with the accounting costs of the scholarships. (Don't get me into the overpriced costs of college text books!!)

The fact is giving a scholarship to any athlete does not kick a paying student out of the school. So when a FCS school says that 63 scholarships "cost" that school 1.5 million dollars, this is pure crap. They have never turned away a qualified PAYING student in order to give a slot to any scholarship athlete.

Accounting is a great and wonderful discipline that is 2 parts science and 1 part art. When handed over to College presidents it is 1 part science and 5 parts art.

Does anyone really believe that the standard variety college president from a FCS school is willing to bleed away 2 to 3 million per year with no benefit to the institution other than the 63 athletes who get free rides???

Montana's President is well off base. Get a good independent accountant who understands the nature of cash flow in the well being of a business and let him see all of the books. He will show that Montana's football program is funding a whole host of programs that benefit the University.

I don't know what game the Montana President is playing (maybe looking for higher ticket prices) but his bluff should be called.

[putter]

It's called, we will show enough football revenue to break even and any surplus revenue is diverted to:
a) other sports currently running a deficit
b) to suppliment other academic ventures that need some cash...

[mlbowl]

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.

EXACTLY!!!

[alphadouchebag]

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.

Lets make it simple for you, if you are paying out more than you are bring in, then some is wrong. I under stand that there is other factors. If the numbers are correct and Montana in breaking even averaging 25,000 people a game then the teams that average 4000 or less are losing their ass. If a investment is not creating a fiscal return then it is not a very good investment. Your argument makes no sense.

[T-Dog]

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.

Delaware reported a good profit for the 2008-09 fiscal year (I believe tops in FCS). App St reported even as by UNC system rules and state law I believe, you can't report a gain or loss in athletics. However, the funds are redistributed to level the books officially to the non-revenue sports so by the looks of things, App St is making more than their spending on football alone.

As for Montana, it still baffles me that they went $2 million in the hole a few years ago. Now they're saying that they need season ticket orders money to balance their books? Doesn't make a lot of sense.

[mlbowl]

As for Montana, it still baffles me that they went $2 million in the hole a few years ago. Now they're saying that they need season ticket orders money to balance their books? Doesn't make a lot of sense.

I'm sure it does...because your team can hop on a bus to all their games. If my memory serves me correctly, the deficit followed trips to Maine, Albany, Hofstra, Sam Houston St., Cal Poly....not to mention our already expensive conference road trips to Nother Arizona, Portland St., Weber St., Sac St., etc...

[UAalum72]

The thought of Montana football players walking onto University Field is one of the more humorous concepts I"ve come across in this forum, but unfortunately the Grizz have never been to Albany.

[henfan]

How much direct revenue does the Univ. of Montana library bring in for the school? When was the last time UM invited 25K paying customers to its campus to watch the chemistry majors compete in a science fair?

Danefan & Blukeys nailed it. Athletics is about so much more than bottom line dollars and cents. If athletics weren't a business value for schools, they wouldn't field teams.

All things considered and right or wrong, there are really few better ways to market your school regionally or nationally than through your AD. My eyes sort of glaze over and the bullshit filters go up whenever I hear any AD or CEO talk about FB or athletics as a money pit.

OK, let's assume you buy the BS that UM is barely breaking even on FB when all is said and done. If that were true, what does that say about the BoT's & CEO's ability to run the school, considering the tens of millions they appropriated for athletic facility improvements?

[mlbowl]

The thought of Montana football players walking onto University Field is one of the more humorous concepts I"ve come across in this forum, but unfortunately the Grizz have never been to Albany.

Sorry, I didn't go back and check...but with the exception of Albany, we most certainly went to the others I listed...and charters to Hofstra and Maine combined with our conference road schedule were HUGE contributing factors to the deficit.

[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.

Lets make it simple for you, if you are paying out more than you are bring in, then some is wrong. I under stand that there is other factors. If the numbers are correct and Montana in breaking even averaging 25,000 people a game then the teams that average 4000 or less are losing their ass. If a investment is not creating a fiscal return then it is not a very good investment. Your argument makes no sense.

It makes sense when you don't look at it purely form a dollars and cents standpoint. As I said before, when you boil football on a campus down to dollars and cents you are missing an awful lot of the "return".

[grizpack]

In addition to what Kem said, there are 3 other factors that Montana has to deal with (and MSU has on #3)

1. UM's administration provides MUCH less institutional funding to athletics than MSU's administration does. Dennison is able to do that because UM's athletic department is very good at fund-raising through other sources, including the GSA, corporate sponsorships, etc.

2. UM athletic department also has the pleasure of paying "rent" to UM for its "use" of the athletic facilities. Not too sure how many other schools do that.

3. Finally, with regard to the charters, UM's charters ranged from between $75k-100k this year, not including the NC charter (which was paid for by the NCAA). UM and MSU pay a much higher charter fee because we are not near a major airport, so we have to pay for the jet coming into Missoula or Bozeman empty and going to it's hub empty. Compare that with bus charters of less than $10k for even the longest trips made in the Big Sky Conference. I would assume it is much cheaper in the east where the distances are much shorter.

[Griz Growler]

As to what the final numbers say as far as money made or lost for the school I cannot say. But I do know that the 25,000 or so fans that come to Missoula to watch the game(obviously some of them live here) generate millions of dollars for the city and its economy. And while putting together a schedule with no I-A opponents is less attractive to fans it is much more conducive to making the playoff's. That not only allows the possibility of three more home games with about an average of 20,000 fans in attendance, but It brings in those fans to Missoula in the peak shopping time of the year. Say what you want about the Grizzlies schedule, but it is smart, and you can't deny the quality of in division opponents with home and home's against Cal Poly, App St and McNeese in years to come.

[henfan]

In addition to what Kem said, there are 3 other factors that Montana has to deal with (and MSU has on #3)

1. UM's administration provides MUCH less institutional funding to athletics than MSU's administration does...

2. UM athletic department also has the pleasure of paying "rent" to UM for its "use" of the athletic facilities. Not too sure how many other schools do that...

It’s pure intellectual dishonesty to promote the notion that ADs are somehow autonomous from universities. In using concepts like 'institutional support' and 'rent', what we’re really saying is that a school is moving funds from one pocket to another to suit a particular agenda. And that’s the great thing about the higher ed racket. Universities have been granted the flexibility to play with financial figures in any manner they wish, given the general lack of oversight by outside sources. Not coincidentally, very few universities are going out of business, while most of the rest of the country is suffering.

If truth be told, athletics is simply a means of advertising for a very profitable industry. It’s all part of the cost of doing business.

[GrizFan5]

THER IS NO WAY, it takes 6 mill to run an fcs program.

They reported $4.2 million for the 2008-2009 year.

This lower figure is what all of us would believe is the proper way to calculate the cost of the football program, i.e. coaches' salaries, scholarships, recruiting, equipment, travel, etc.

The higher number is a fully loaded number, which includes allocations for athletic department salaries and overhead and other things.