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Michigan projects $26 million athletic deficit upcoming year
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quo vadis Offline
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Michigan projects $26 million athletic deficit upcoming year
And that's if football games are actually played:


https://sportsnaut.com/2020/06/michigan-...-pandemic/
06-27-2020 03:23 PM
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Michael in Raleigh Offline
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RE: Michigan projects $26 million athletic deficit upcoming year
With as much money as is being brought in by the Big Ten alone, how, just, how, do you run a deficit like that?

Live within your means.
(This post was last modified: 06-27-2020 03:25 PM by Michael in Raleigh.)
06-27-2020 03:25 PM
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jdgaucho Online
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RE: Michigan projects $26 million athletic deficit upcoming year
I don't feel sorry for them. Likely the Michigan MAC schools or Oakland don't feel for them either.
06-27-2020 03:43 PM
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Bronco'14 Offline
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RE: Michigan projects $26 million athletic deficit upcoming year
(06-27-2020 03:43 PM)jdgaucho Wrote:  I don't feel sorry for them. Likely the Michigan MAC schools or Oakland don't feel for them either.

Correct, they bathe in gold. The state will likely give it all back to them, or they'll get it back by Walmart sales or donors. Nothing really to see here.
(This post was last modified: 06-27-2020 03:47 PM by Bronco'14.)
06-27-2020 03:47 PM
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Renandpat Offline
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RE: Michigan projects $26 million athletic deficit upcoming year
And Indiana projects a $12M loss.

https://amp.indystar.com/amp/3265963001
06-27-2020 03:57 PM
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otown Offline
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RE: Michigan projects $26 million athletic deficit upcoming year
All those facilities are mortgaged. The money is spoken for years in advance.
06-27-2020 04:24 PM
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quo vadis Offline
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RE: Michigan projects $26 million athletic deficit upcoming year
(06-27-2020 03:25 PM)Michael in Raleigh Wrote:  With as much money as is being brought in by the Big Ten alone, how, just, how, do you run a deficit like that?

Live within your means.

I guess because they have already spent the anticipated money.
06-27-2020 06:46 PM
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Statefan Offline
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RE: Michigan projects $26 million athletic deficit upcoming year
They "project" a deficit because the plan to spend as if Football and Basketball are continuing. As for their debt, UM can force any creditor to wait or restructure. This is a call to raise money from the State or their Boosters.
06-27-2020 08:21 PM
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BruceMcF Offline
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RE: Michigan projects $26 million athletic deficit upcoming year
(06-27-2020 03:25 PM)Michael in Raleigh Wrote:  With as much money as is being brought in by the Big Ten alone, how, just, how, do you run a deficit like that?

Live within your means.

Since an athletic department is a "not for profit" organization, one with big revenues has a strong incentive to find ways to spend money on "costs" that benefit the organization, to reduce the money wasted by handing it back to the University.

But then at times like this that comes back to haunt them, because those costs are still there when the ticket sales to fill up the Big House are not going to be there (they are not ALL going to be there even if football goes ahead at reduced capacity ... if it goes ahead in locked stadiums they are REALLY going to drop).
06-28-2020 03:26 AM
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Big Frog II Offline
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RE: Michigan projects $26 million athletic deficit upcoming year
All schools are going to suffer this year.
06-28-2020 09:27 AM
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quo vadis Offline
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RE: Michigan projects $26 million athletic deficit upcoming year
(06-28-2020 03:26 AM)BruceMcF Wrote:  
(06-27-2020 03:25 PM)Michael in Raleigh Wrote:  With as much money as is being brought in by the Big Ten alone, how, just, how, do you run a deficit like that?

Live within your means.

Since an athletic department is a "not for profit" organization, one with big revenues has a strong incentive to find ways to spend money on "costs" that benefit the organization, to reduce the money wasted by handing it back to the University.

That kind of structure is tail wagging the dog, as "the university" should have first and last say about how athletic revenues are spent, including how much is transferred out of athletics, not the athletic department.
06-28-2020 09:31 AM
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Scoochpooch1 Offline
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RE: Michigan projects $26 million athletic deficit upcoming year
(06-27-2020 03:23 PM)quo vadis Wrote:  And that's if football games are actually played:


https://sportsnaut.com/2020/06/michigan-...-pandemic/

It's probably from all that money they are sending to fund BLM.
06-28-2020 09:45 AM
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BruceMcF Offline
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RE: Michigan projects $26 million athletic deficit upcoming year
(06-28-2020 09:31 AM)quo vadis Wrote:  
(06-28-2020 03:26 AM)BruceMcF Wrote:  
(06-27-2020 03:25 PM)Michael in Raleigh Wrote:  With as much money as is being brought in by the Big Ten alone, how, just, how, do you run a deficit like that?

Live within your means.

Since an athletic department is a "not for profit" organization, one with big revenues has a strong incentive to find ways to spend money on "costs" that benefit the organization, to reduce the money wasted by handing it back to the University.

That kind of structure is tail wagging the dog, as "the university" should have first and last say about how athletic revenues are spent, including how much is transferred out of athletics, not the athletic department.

Yes "should do" and "do" are often quite wide apart when it comes to how organizations behave in the real world.

This is one of the arguments for splitting off the big money sports as for-profit enterprises that pay a franchise fee to the University that they use for branding purposes, as well as tuition for the classes that their athletes elect to take from their University brand partner ... they would likely pay substantially more to the Universities in franchise fees as a cost of doing business than they pay in "operating surpluses" as notionally not for profit enterprises.
(This post was last modified: 06-28-2020 10:00 AM by BruceMcF.)
06-28-2020 09:57 AM
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jdgaucho Online
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RE: Michigan projects $26 million athletic deficit upcoming year
(06-28-2020 09:27 AM)Big Frog II Wrote:  All schools are going to suffer this year.

Yes. But if there's no football, those schools who play it will be hit harder than those who don't.
06-28-2020 11:07 AM
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JRsec Offline
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RE: Michigan projects $26 million athletic deficit upcoming year
(06-27-2020 03:25 PM)Michael in Raleigh Wrote:  With as much money as is being brought in by the Big Ten alone, how, just, how, do you run a deficit like that?

Live within your means.

They do live within their means. The problem is that their means depend on actually playing sports. The deficit is projected on playing but with a half empty Big House and minus the NCAA tournament money from this past March plus a bust for baseball and softball, not that that's much at all, but both programs got started and didn't get to finish so they were pretty much a total loss since the end of season tournaments at least mitigate their expenses.

Keeping staff in a lockdown is the real deficit. They aren't doing the things that earn them the revenue from recruiting and coaching if the games aren't played.

No Football for the Fall would bring about a radical reshuffling of athletic department pecking orders. AD's prepare for weather cancellations, prepare and hope they never face a terrorist threat, some even prepare for other natural disasters if their areas are prone to them, but nobody prepared for a year with no sports with staff signed to longer contracts.

The only way to accommodate this contingency is to sigh all paid athletic department employees to 1 year contracts, but how would that work for continuity and program building?

There is only 1 solution. Schools should be permitted to endow 4 year's worth of Athletic Revenue to be used to fulfill contracts in event of war, or apparently pandemics, and perhaps asteroid impacts.
(This post was last modified: 06-28-2020 12:33 PM by JRsec.)
06-28-2020 12:29 PM
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RE: Michigan projects $26 million athletic deficit upcoming year
(06-28-2020 12:29 PM)JRsec Wrote:  
(06-27-2020 03:25 PM)Michael in Raleigh Wrote:  With as much money as is being brought in by the Big Ten alone, how, just, how, do you run a deficit like that?

Live within your means.

They do live within their means. The problem is that their means depend on actually playing sports. The deficit is projected on playing but with a half empty Big House and minus the NCAA tournament money from this past March plus a bust for baseball and softball, not that that's much at all, but both programs got started and didn't get to finish so they were pretty much a total loss since the end of season tournaments at least mitigate their expenses.

Keeping staff in a lockdown is the real deficit. They aren't doing the things that earn them the revenue from recruiting and coaching if the games aren't played.

No Football for the Fall would bring about a radical reshuffling of athletic department pecking orders. AD's prepare for weather cancellations, prepare and hope they never face a terrorist threat, some even prepare for other natural disasters if their areas are prone to them, but nobody prepared for a year with no sports with staff signed to longer contracts.

The only way to accommodate this contingency is to sigh all paid athletic department employees to 1 year contracts, but how would that work for continuity and program building?

There is only 1 solution. Schools should be permitted to endow 4 year's worth of Athletic Revenue to be used to fulfill contracts in event of war, or apparently pandemics, and perhaps asteroid impacts.

Yeah, I was about to say the same thing. Living within your means is a standard where your income exceeds your expenses. When income goes to zero, pretty much no school, business or individual can leave within their means.

Now, whether there should be a rainy day fund for extraordinary times like these if your income suddenly goes to zero is a different question. We generally expect individuals to have several months of a rainy day fund for times like these. Of course, not many people do, whether well-intentioned or not. Frankly, even fewer businesses have that type of rainy day fund - if you have cash as a business, you’re generally plowing it back in. It’s the disconnect that we have as a society (and I’m as guilty of it as anyone): we preach saving as a virtue, but our economy largely depends on everyone (from individuals to businesses) to keep spending. As a result, people and businesses naturally increase spending as income increases. It’s not that anyone should feel sorry for Michigan, but they’d be criticized if they were stashing away tens of millions of dollars per year in prior years as a non-profit institution, too.
06-28-2020 01:15 PM
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JRsec Offline
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RE: Michigan projects $26 million athletic deficit upcoming year
(06-28-2020 01:15 PM)Frank the Tank Wrote:  
(06-28-2020 12:29 PM)JRsec Wrote:  
(06-27-2020 03:25 PM)Michael in Raleigh Wrote:  With as much money as is being brought in by the Big Ten alone, how, just, how, do you run a deficit like that?

Live within your means.

They do live within their means. The problem is that their means depend on actually playing sports. The deficit is projected on playing but with a half empty Big House and minus the NCAA tournament money from this past March plus a bust for baseball and softball, not that that's much at all, but both programs got started and didn't get to finish so they were pretty much a total loss since the end of season tournaments at least mitigate their expenses.

Keeping staff in a lockdown is the real deficit. They aren't doing the things that earn them the revenue from recruiting and coaching if the games aren't played.

No Football for the Fall would bring about a radical reshuffling of athletic department pecking orders. AD's prepare for weather cancellations, prepare and hope they never face a terrorist threat, some even prepare for other natural disasters if their areas are prone to them, but nobody prepared for a year with no sports with staff signed to longer contracts.

The only way to accommodate this contingency is to sigh all paid athletic department employees to 1 year contracts, but how would that work for continuity and program building?

There is only 1 solution. Schools should be permitted to endow 4 year's worth of Athletic Revenue to be used to fulfill contracts in event of war, or apparently pandemics, and perhaps asteroid impacts.

Yeah, I was about to say the same thing. Living within your means is a standard where your income exceeds your expenses. When income goes to zero, pretty much no school, business or individual can leave within their means.

Now, whether there should be a rainy day fund for extraordinary times like these if your income suddenly goes to zero is a different question. We generally expect individuals to have several months of a rainy day fund for times like these. Of course, not many people do, whether well-intentioned or not. Frankly, even fewer businesses have that type of rainy day fund - if you have cash as a business, you’re generally plowing it back in. It’s the disconnect that we have as a society (and I’m as guilty of it as anyone): we preach saving as a virtue, but our economy largely depends on everyone (from individuals to businesses) to keep spending. As a result, people and businesses naturally increase spending as income increases. It’s not that anyone should feel sorry for Michigan, but they’d be criticized if they were stashing away tens of millions of dollars per year in prior years as a non-profit institution, too.

I agree with everything you've just said. But, now is exactly the time to have serious discussions on rainy day funds for our Athletic Departments. The government will be a bit more sympathetic to schools for putting up 10's of millions of dollars for just these circumstances as the government finds itself in the same boat right now. The public will also be more sympathetic. So I believe it is not only prudent but essential to have these discussions now. The memory of the public will be maybe 20 years on this crisis but the empathy for such planning will die out with a matter of a few years.

All public and private schools should now be aware of the need to do so. They should be free to accept any and all donations made to that end, and should be ready to set aside 20% of their annual revenue to meet those goals.

I think this would be better than having flowing fountains in the dressing rooms. Here's looking at you Bama!

As to private individuals I'm a firm believer in having at least 3 months NET income set aside for major crises. A down power grid, the pandemic, a natural disaster, etc can happen at anytime. A hidden small safe anchored to concrete and fire proof is all you need to keep the cash and important documents in if you don't have a safe deposit box and getting such is relatively inexpensive to do.

Most households, as you correctly note, don't have even 30 days surplus and when something like this hits it really cripples those families. Since I consider my alma maters to be family as well I hate to see them crippled by circumstances beyond their control. And Frank, while our economy is built on consumerism, the banks would be infinitely healthier if we kept savings in them as a matter of habit. Payroll deduction is the best way to get there. If you don't see it, you generally don't miss or spend it.
06-28-2020 01:39 PM
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Wolfman Offline
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RE: Michigan projects $26 million athletic deficit upcoming year
(06-27-2020 03:25 PM)Michael in Raleigh Wrote:  With as much money as is being brought in by the Big Ten alone, how, just, how, do you run a deficit like that?

Live within your means.

Michigan took in ~$54 million in ticket sales in 2019. It's generally accepted that 80% of revenue comes from football. That's a 22% hit just from not playing football and doesn't consider related revenue. Contributions, concessions, merchandise... all are going to take a hit.
06-28-2020 04:17 PM
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quo vadis Offline
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RE: Michigan projects $26 million athletic deficit upcoming year
(06-28-2020 09:57 AM)BruceMcF Wrote:  
(06-28-2020 09:31 AM)quo vadis Wrote:  
(06-28-2020 03:26 AM)BruceMcF Wrote:  
(06-27-2020 03:25 PM)Michael in Raleigh Wrote:  With as much money as is being brought in by the Big Ten alone, how, just, how, do you run a deficit like that?

Live within your means.

Since an athletic department is a "not for profit" organization, one with big revenues has a strong incentive to find ways to spend money on "costs" that benefit the organization, to reduce the money wasted by handing it back to the University.

That kind of structure is tail wagging the dog, as "the university" should have first and last say about how athletic revenues are spent, including how much is transferred out of athletics, not the athletic department.

Yes "should do" and "do" are often quite wide apart when it comes to how organizations behave in the real world.

This is one of the arguments for splitting off the big money sports as for-profit enterprises that pay a franchise fee to the University that they use for branding purposes, as well as tuition for the classes that their athletes elect to take from their University brand partner ... they would likely pay substantially more to the Universities in franchise fees as a cost of doing business than they pay in "operating surpluses" as notionally not for profit enterprises.

http://www.susla.edu/news/susla-partners...ll-program
06-28-2020 06:02 PM
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SeaBlue Offline
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RE: Michigan projects $26 million athletic deficit upcoming year
(06-27-2020 06:46 PM)quo vadis Wrote:  
(06-27-2020 03:25 PM)Michael in Raleigh Wrote:  With as much money as is being brought in by the Big Ten alone, how, just, how, do you run a deficit like that?

Live within your means.

I guess because they have already spent the anticipated money.

Much of the major renovations at Michigan were paid for up front. But then you have operating costs to cover and the big contracted salaries. You pay for that with expected recurring revenue and donations.

Michigan will find a way to make it work. Pay cuts were just announced. https://www.cbssports.com/college-footba...ronavirus/

The lower tier guys that someone else mentioned have way to many worries of their own to be thinking about feeling sorry for Michigan (or not). And then there's Michigan State. They are a much better example of creating a mess.
(This post was last modified: 06-30-2020 10:45 AM by SeaBlue.)
06-30-2020 10:39 AM
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