They may operate on a smaller field, but they play a much bigger financial game in the States.
Last month, the University of Michigan finalized a deal to hire Jim Harbaugh as the school’s next head coach. Harbaugh, a former Wolverines quarterback from the 1980s, left the San Francisco 49ers to join his alma mater for a base salary of $5 million a year for seven years (with opportunity for large performance bonuses).
Even in the United States, that number got people’s attention. Here in Canada, the news was greeted with amazement, in addition to the unique befuddlement only Canadian media can generate over certain U.S. sport stories. Take Globe and Mail sport columnist Cathal Kelly’s tweet following the announcement:
Every University of Michigan student will pay $180/year toward new football coach Jim Harbaugh’s $8M salary.
Not even close.
Yes, American universities place far too much emphasis on athletics and, in turn, pay the price on the academic side for that far too often. But lazy analysis like this leads to a muddied and incomplete understanding of the problem.
I know it’s tough to understand, but they play a different game down south.
In the United States, quasi-independent athletic departments rule the sporting landscape. The power these units have gathered over the last generation is incredible. At elite sporting institutions, athletic directors wield more power than presidents.
And in the minds of many, why not? When was the last time University of Michigan president Mark Schlissel packed 110,000 people in for his State of the University address?
That simply doesn’t happen in Canada. Part of the reasoning behind that is the fact U.S. athletic departments operate on independent budgets overseen by separate boards, and often look to university presidents and boards of governors for rubber-stamp approval. That might not be the structure as described on paper, but believe me, as a guy who oversaw coverage of big-time university athletics for a decade, that is how they operate.
And among these institutions, football is king. Just follow the money.
According to the New York Times, ESPN is paying $7.3 billion over 12 years to telecast seven games a year under the championship playoff format that began this season – four major bowl games, two semifinal bowl games and the national championship game. When Oregon plays Ohio State in the title game Monday, advertisers will be paying Oscar night rates of $1 million for a 30-second spot.
Compare that to Canada, where last season SportsNet dropped Ontario University Athletics football coverage from television. All games were relegated to a hard-to-follow webcast on the league’s website.
For U.S. university athletic departments, this new playoff system means big money. Under this format, the ‘Power Five’ conferences – Atlantic Coast, Big 12, Big Ten, Pac 12 and Southeastern – split approximately $50 million, plus bonuses for teams that participate in playoff games. That amount is double what the old system offered.
Imagine what those numbers will mean to Michigan, a member of the Big Ten.
In 2013, Michigan’s athletic department generated $143.5 million in revenue and a bit shy of $12 million in profit. That figure was accomplished using only $255,000 in university funds for everything from work study for athletes, to administrative costs, to grounds maintenance and security.
Michigan’s football program alone accounted for more than half of the department’s revenue, roughly $80 million. The $57 million in profit generated by the football program buoyed 30 or so other Maize and Blue varsity teams. In the Big Ten, as in many other conferences, football carries the revenue load. You aren’t surviving on volleyball.
And here’s a special note: The University of Michigan Athletic Department took a total of zero dollars in student fees.
And that is what is infuriating about comments like Kelly’s, which show a complete lack of understanding – be it out of ignorance or malice. (And isn’t Kelly’s the same paper which champions CEOs who make 195-times their average worker? You would think he would applaud Harbough’s free market windfall.)
Yes, the U.S. system is incredibly flawed. Despite the separation in revenue, athletic department shortcomings – usually enabled by presidents and boards – have been allowed to infect the academic side. And we’re talking about more than the ‘football factory’ schools. Once proud institutions, like the University of North Carolina, most recently, have reevaluated their academic integrity after the will to win overpowered reason.
There is a real debate to be had in this area for the States – as well as many cautionary lessons for us north of the border. But just because they don’t play the same game, doesn’t forgive us for not understanding the rules. In fact, it makes it all the more important.