PRINTMo' Money
The one-two punch of football's fiscal impact
Missourian file photos, scoreboard photo Matt Cavanah
October 22, 2009 | 12:00 a.m. CST
Editor's note: To see more money break-downs of MU football click here.
It’s a classic jock-versus-nerd squabble, decades after the last middle school lunchroom insult.
- Score! Who won it, 2002 to 2008
- Game Day Guide
- The visor
- The tailgating zoo
- Hey buddy, you're in my seat
- The Price of Playing
- Know your enemy
- Letting 'em out of their cages and corrals
- Stat Showdown
- Game Day Whereabouts
- Remember the Tigers
- Studying the stereotype
- Censorship Uncensored
- And the winner is...
- Endzone ensembles
- I'm with the band
- Supporting Cast
- Prep and pride off the field
- An Obituary for the beloved Reactor
- The Lost, the Found and the Confiscated
- Columbia's Hangover
- Play by play
- Makin' Bank
- Tiger Watch Party
- Uniformology
In November 2008, the MU Board of Curators approved a $450,000 pay raise for head football coach Gary Pinkel, which brought his total annual salary to $2.3 million and could keep the successful coach at Mizzou through 2015. Fewer than two hours before Pinkel contracted for enough money to buy us all a few rounds of beer, MU Chancellor Brady Deaton announced budget cuts exceeding $50 million for the MU system due to severe cuts in state funding. The episode left many questioning whether Mizzou athletics were taking priority over academics, even though Pinkel’s salary is funded by the athletics department budget, which operates on its own and makes money largely independent of the university. So, before you get out that pitchfork and take to the streets, let’s consider the numbers in full.
Yes, the Mizzou athletics department as a whole is a goliath. Its budget for fiscal year 2010 totals $49.97 million, according to Tim Hickman, senior associate athletics director for operations. That’s more than three times the MU libraries’ operating expenses, nearly double what’s spent on campus utilities and the equivalent of more Chipotle burritos (even with chips and guacamole) than you can eat in a lifetime. The athletics department payroll claimed a little less than half the budget while the other half went to operating costs, athletic scholarships and financial aid.
Within the department and within MU, football serves a greater purpose than getting a ball across a line while smashing into the opponent. It’s big business. With a budget of nearly $11 million for the 2007-2008 season, football is by far the neediest member of the athletics department. Men’s basketball ranked a distant second in budget funding, with roughly a third of the football team’s allotment. But although Mizzou’s football program spends money, it also makes it: Roughly 62 percent of the athletics department’s earnings are generated by revenue related to football. The team banked $19.3 million in revenue for the 2007-2008 season alone — and that’s just from money generators such as ticket sales and parking. The team also collects cash for invading your boob tube on Saturdays and took home more than $8.4 million for TV rights just in 2007-2008.
Where college football truly makes money, though, is in the licensing and sale of merchandise. Those Snuggies and foam tiger hats add up, and retail sales of collegiate merchandise nationwide is estimated at $4.2 billion per year, according to License Global magazine. Mizzou gear with the “Officially Licensed Collegiate Product” hologram brings in real cash to the athletics department. In the past year, royalties from Mizzou merchandise grew at the second highest rate among national universities, behind only Fresno State. Currently, Mizzou swag ranks 21st overall in collegiate royalties, behind just four other Big 12 schools: Texas (1), Oklahoma (10), Kansas (17) and Nebraska (20).
But not every revenue generator actually results in profit. What about the $2.25 million for showing up at the December 2008 Alamo Bowl or the $3 million payout for playing in the January 2008 Cotton Bowl? Money from these bowl games actually goes to the entire conference and not directly to individual universities. So any green Mizzou gets for its appearance is divided up 12 ways, which means even lowly Baylor and (yes, sadly) Kansas get a cut of Mizzou’s success. The team actually only received a $1.2 participation allowance for the Alamo Bowl, which was respent almost immediately. In truth, after Mizzou pays for the expenses of a bowl game, including travel, meals, lodging and a required number of tickets (because how many fans are actually going to fly to Shreveport and buy a seat for something called the AdvoCare V100 Independence Bowl?) the team ends up closer to breaking even than breaking the bank.
Although the athletics department is largely self-supported through ticket sales, donations, conference funding and your neighbor’s extensive collection of M-I-Z shirts, it derives about 5 percent of its budget from the university “in recognition for what we provide to the campus,” Hickman says. Portions of these funds are devoted to debt payments on big-ticket upgrades such as the Devine Pavilion practice facility and ticket deals for students, faculty and staff. About one-fifth of the athletics department’s budget is recycled through campus in the form of tuition assistance for athletes and payments for university-provided services such as security and electricity, Hickman says.
Beyond the money debate, though, winning games at Memorial Stadium might actually be bringing more students to Columbia, too. One 1998 study by J. Douglas Toma and Michael Cross showed that national championships in football and men’s basketball lead to significant increases in applications and admissions to universities the following year. Indeed, first-time freshman enrollment at MU shot up 15.6 percent in 2008, the fall after the Tigers went 12-2. And freshman enrollment dipped back down this fall after a disappointing season last year.
But such things aren’t considered in light of purchases, such as this year’s new $3.5 million scoreboard. And thus, like a teenager calling to explain that nonemergency purchase on the parents’ credit card bill, Mizzou’s football budget and Pinkel’s raise took center stage last November. The contract made him the third-highest paid coach in the Big 12 and 12th highest among NCAA bowl-eligible football teams. Perhaps a result of poor timing rather than misplaced priorities, the contract drew criticisms from faculty members facing decreases in pay, hiring freezes and other budget-related cutbacks. But even with increasing expenses, including coaches’ salaries and travel, the department isn’t sweating. “We anticipate the budget this year to run a slight deficit, which is fairly typical in the cyclical nature of our business,” Hickman says. “Last year we ended up with a surplus, which we put in savings.”
Nerds, it looks like you’re up against some business-savvy jocks.
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