As the College Sports model falters, Michigan tries to maintain balance

Roman Wilson grew up in Hawaii and didn’t realize how much money was in college football until his senior year of high school, when he took a week-long recruiting visit to the mainland. His first stops were Cal-Berkeley and UCLA. “Very nice facilities,” he thought.

Then he visited Michigan.

“Just the building we stay in every day costs millions of dollars,” said Mr. Wilson, a wide receiver. “One of the largest weight rooms I have ever seen. The training room is excellent. Even flying to games with airplanes also costs a lot of money.”

In Michigan, money is pouring in from several sources: ticket sales from college football’s largest stadium, which can hold more than 100,000 fans for every home game; payouts from the richest conference television deal; seat licenses; sponsorship; and donations from some of the more than half a million Michigan graduates living around the world.

It amounts to what the school expects to be $214 million in athletic department revenue for this academic year, making it one of the wealthiest programs in the country. And that doesn’t even include the millions more raised by booster-run collectives that funnel money to athletes in exchange for their endorsement rights.

Washington, which plays Michigan on Monday night in the College Football Playoff title game, brought in $145 million last year, which ranked 25th among public universities, according to one study. USA Today Database. Michigan came in fourth.

The game, to be played in Houston, comes at a time of dramatic upheaval for the uniquely American model of college athletics.

The tension between college sports and the holistic mission of higher education, which exists nowhere else, has never been greater. This is evident in the creation of conferences from coast to coast, lawsuits seeking athletes’ employment status or levying antitrust charges, and suggests that the wealth of television may push football to break away from the NCAA, its governing body for college athletics.

College football’s powerhouses are increasingly looking like NFL teams with class schedules and homecomings.

So much so that a wide range of stakeholders have addressed what may not long ago have been dismissed as a whimsical question, but represents a fundamental shift in college sports: How much would Michigan football be worth if it could go on the open market? be purchased? like the recently acquired Washington Commanders of the NFL or Dallas Mavericks of the NBA?

“I would say at least a billion,” said Gerry Cardinale, the founder of private equity firm Redbird Capital, which has a stake in soccer club AC Milan and Fenway Sports Group. “Four to five times the turnover. $1.5 billion would make sense.”

Cardinale acknowledged in his calculation that it would be complicated to separate a college football program from the university. But the exercise underscored for him that college football is a rare commodity in sports: an undervalued asset.

Television contracts would be even richer if the conferences bought their rights together, rather than competing with each other through the networks.

Then Florida State discussions started with private equity companies last summer as it explored ways to increase yields Exit costs of $130 million of the Atlantic Coast Conference showed how hungry some schools are for capital.

‘The only professional amateur sport’

Of course, the pursuit of money underscores the underlying inequality of college football and basketball — that the windfall funds lavish facilities, sky-high staffs and coaches’ salaries that exceed $10 million, but is not shared directly with the athletes who generate it.

“One of the foundations of college athletics that, ironically, makes it valuable is amateurism,” Mr. Cardinale said. “It is the only professionalized amateur sport.”

Notre Dame athletic director Jack Swarbrick described a widening spectrum between schools that cling to the student-athlete ideal — helping players do their best on the field and in the classroom — and schools that essentially license their points to a third party. company masquerading as an athletic department.

“It inevitably cannot sustain itself at its current size; that is simply not possible,” said Mr Swarbrick, who will retire later this year. “I don’t know where that’s going, but it’s a dynamic tension that can’t be destroyed.”

There are few places where that tension is as high as in Michigan.

In the South, which has dominated college football for the past decade, the sport may be the tail that wags the dog on campuses. Alabama, for example, has used its football dominance under coach Nick Saban to transform the school. A series of national championships has lured more out-of-state students, who pay higher tuition, funding an improved faculty, raising the school’s academic profile, which attracts better students.

The rise of Michigan

Michigan has long been considered one of the nation’s top public universities, along with the University of California’s flagship campuses at Berkeley and Los Angeles.

The rise of the university nearly a century ago coincided with the rise of the state as an industrial engine for the United States after World War I, when the university began to attract research talent away from East Coast institutions, including a young scientist who was introduced to studying virology in the United States. Ann Arbor – Jonas Salk.

Many of the athletic department’s largest donors contribute much more elsewhere on campus. Miami Dolphins owner Stephen M. Ross donated $100 million to the business school now named in his honor. Former Mets owner Fred Wilpon, for whom Michigan’s baseball and softball complex is named, has donated $61 million to fund a college scholarship program for first-generation college students. (Mr. Ross and Mr. Wilpon declined interview requests.)

The university “has a place in the imagination of Midwesterners,” said Jordan Acker, a member of Michigan’s Board of Regents. “It is physically located in the heart of the industrial Midwest, 30 minutes from the Rouge factory, yet within global reach. What we tell ourselves and believe is that the university we have built and nurtured is both unique and important. The idea of ​​the elite public university is unique to America.”

Or as Ken Davidoff, a Michigan graduate and former sports columnist for the New York Post, put it: “We are generally an arrogant race. We have much better academics than Iowa State and much better athletics than Yale.

This high-handedness has not insulated Michigan from the athletics default rate scandal. The Fab Five basketball teams, cultural touchstones of the 1990s, turned out to have been paid for by a booster. A generation later, an Ann Arbor News investigation found that athletes had received good grades for doing minimal work.

In 2020, dozens of Michigan athletes came forward to say they were sexually assaulted by a doctor during physical exams, following similar cases in Michigan State and Ohio State.

The most sensational story of this college football season was the revelation of an elaborate, illegal sign-stealing scheme orchestrated by a football assistant named Connor Stalions. That led to a suspension of the head coach, Jim Harbaugh, for the final three games of the regular season. This ended the three-match suspension with which Mr. Harbaugh was hit early in the season for lying to NCAA investigators in another case.

Not that all this has dampened the enthusiasm around football.

In fact, Michigan and its fans have adopted the role of victim as easily as any other righteous team and fan base. In a sign of the times, a collective supporting Wolverines athletes is selling ‘Michigan vs. Everybody’, T-shirts from $45.

“I don’t see this disgracing the university,” said Andrei Markovits, a professor of comparative politics and German studies at Michigan who has written books on global sports culture. “All this is excused if you win.”

It also helps that Mr. Harbaugh is a former star quarterback at Michigan. The athletics director, Warde Manuel, is one of Mr. Harbaugh’s teammates. And the men’s basketball coach, the other high-profile position in the athletic department, is Juwan Howard, a cornerstone of the Fab Five basketball teams.

They are colloquially called Michigan Men. (It is believed that no archetype yet exists for Michigan Woman.)

“The Michigan Man is an elite person,” Mr. Markovits said. “It’s the way you say something, the way you behave. You’re not just working out. It doesn’t matter that Harbaugh doesn’t care about the French department, it flows from what makes Michigan special.”

Those many Michigan men and women may be even more intertwined with football as the college sports world grapples with an uncertain future. Michigan may not have many schools’ existential fear of falling behind in an era that is showing the hallmarks of consolidation, but there are questions about what revenue sharing will look like, how to finance Olympic sports, and how we Joneses can keep up.

“Are we going to a place where athletic departments are run by the donors?” asked Bob Boland, professor of sports law at Seton Hall. “University presidents might tell you they already are. We are in an interesting place here as the company begins to push past its institutional walls.”