Just off of Highway 82 in Itta Bena, Mississippi, sits tiny Mississippi Valley State University. It is the home of 2,500 undergraduates and a men’s basketball team, the Delta Devils. Once upon a time, the Delta Devils saved MVSU.
The year was 1986 and MVSU was dying. The school was deeply in debt, academic programs were disappearing, and the student population was dwindling. The Mississippi College Board, charged with evaluating the state’s university system, reviewed MVSU and was so dismayed that it recommended to the state legislature that the school be closed.
Then, in March, the Delta Devils basketball team unexpectedly swept through the Southwestern Athletic Conference tournament and won a bid to the big dance—the NCAA tournament. At the NCAAs they were seeded 16th, and largely thought to be the worst team in the draw. As such, their first round game was against the best team in the nation—mighty Duke University.
The scrappy Delta Devils gave the Duke Blue Devils a nasty shock. At the half MVSU led by three. Early in the second period they stretched the lead to seven, and only in the closing minutes was Duke able to pull ahead, ultimately prevailing 85-78. When the twelve members of the MVSU basketball returned home to Itta Bena, they brought with them a substantial check from the NCAA for participating in the tournament.
Energized by their team’s performance, alumni poured in donations. Many now believe that the improbable run of the basketball team saved the school. William W. Sutton, who took over as president of MVSU in 1988, is coy about the causal relationship of the two events. “I don’t think it was the only factor,” he said. “But. . ..”
Big-Time Money. . .
Ever since Rutgers took the field against Princeton in the first intercollegiate football game in 1869, it has been an article of faith among all college athletic directors and many college presidents that big-time sports make big-time money. Big time sports—meaning Division I-A football and Division I men’s basketball—are commonly referred to as revenue producers. The income they produce subsidizes the other non-revenue producing sports such as gymnastics, swimming, and soccer.
The costs of running these big-time programs is not insignificant. A Division I-A football program offers 85 scholarships, which at a school with tuition of $15,000 a year can cost $1.25 million.
In addition, Division I-A schools are required to pay for a stadium with at least 30,000 seats (and costing tens of millions of dollars), insurance (add several hundred thousand dollars), equipment, grounds keeping, transportation, recruiters, staff, and coaches (a head coach alone can cost as much as half a million dollars per year).
Jim Delany, commissioner of the Big 10 Intercollegiate Athletic Conference, a Division I-A conference, estimated that “costs for each school in this division can amount to $3 million to $4 million per season.”
Men’s basketball isn’t as expensive, but it’s close. A Division I program offers 13 scholarships each for men and women, in addition to attendant costs for upkeep of the arena, insurance, coaching, scouting, and travel.
But despite all of these expenses, both football and men’s basketball often prove to be very profitable. During the 1996–1997 season, the University of Michigan earned $2.1 million for the television rights to its games, $1 million for the radio rights, $13.5 million in ticket sales from home games, $450,000 from concessions, $125,000 from program sales, $65,000 from merchandising, and $950,000 from bowl game participation. When all of its revenues were counted, the Wolverines grossed $21.3 million and cleared $10.6 million at the end of the season, which went to fund non-revenue producing sports at the university.
Among Division I-A schools, the University of Michigan doesn’t seem to be an aberration. A survey of 111 Division I-A schools conducted by the College Football Association in 1996 showed that the group grossed $628 million with $328 million in expenses during the 1995–1996 season. In addition, the CFA reported $216 million in alumni and booster donations to athletic departments that year.
Men’s basketball has suddenly become just as lucrative. In November 1999, CBS purchased the television broadcast rights to the NCAA tournament for eleven years for $6 billion, an astonishing amount, especially considering that in 1982 CBS had paid just $48 million for three years of the NCAA tourney. Even that amount shocked analysts at the time because it was triple the amount of the previous contract. Eventually that money will filter down, first to the athletic conferences, and then to the participating schools themselves.
. . .Or Losing to Win?
There is an ingrained belief among many schools’ development officers that the excitement of big-time sports plays a significant part in pulling in alumni donations. Time and again they cite the Delta Devils’ 1986 miracle and other anecdotal evidence.
For example, the late 1980s were marked with a turnaround in the athletic fortunes of the Southwest Missouri State men’s basketball team, culminating with their appearance in the 1992 NCAA tournament. In 1982, when the program was a shambles, athletic fundraising for the school totaled $42,000. A decade later, post-turnaround, it was $1.2 million.
In the truly big-time world of Midwest football, Alex Shumate, the former chairman of the board of trustees at Ohio State University, said that Ohio State football is about “friend-raising and fundraising.” Shumate believes that to Ohio State’s 400,000 alumni, Buckeye football really is an essential part of the reason they are contributing to the university.
The school believes this so strongly that in 1997 the trustees pushed through a $150 million expansion to their already gigantic football stadium. The augmentation leaves Ohio State with 98,000 seats and 30 state-of-the-art luxury boxes. When asked if sports helps with alumni fundraising, current chairman of the Ohio State trustees Michael Colley is characteristically blunt: “The answer is yes.”
There is not, however, universal agreement on the matter. Edward Derse of the radio program Marketplace points to a number of indicators that the sports-driven revenue stream may be as much myth as reality. The NCAA’s budget was just $303 million last year. With the new contract with CBS, it is projected to swell to almost $600 million, eating up much of the money which should go to schools.
The Ohio State stadium expansion forced $150 million of debt onto an athletic department which already had a $59 million budget, enough to run a mid-sized liberal arts college. And in 1998, the University of Wisconsin athletic department actually lost $1 million despite the fact that its football team made it to the Rose Bowl.
Even more disturbing, there seems to be a tremendous difference between big-time and near-big-time sports. A study conducted during the 1995–1996 season—the same season monitored by the College Football Association—showed that the average Division I-AA school lost nearly $600,000 on football.
In 1997, Division I-AA Boston University withdrew from intercollegiate football after losing $2.4 million on the program during the previous season. (Unlike their exalted brethren in Division I-A, I-AA schools only get 63 scholarship players and aren’t required to invest in giant stadiums.) “Football at most schools actually loses money because the expenses are so huge,” said John Feinstein, author of A Civil War: Army Vs. Navy: A Year Inside College Football’s Purest Rivalry.
Notre Dame’s Fighting Alumni
Of course, losses are hard to pin down because the balance sheet does not capture alumni donations spurred by a successful team, in the manner of the Delta Devils. Charles F. Lennon Jr., executive director of the Notre Dame Alumni Association, doesn’t believe the sports-beget-alumni-contributions lore. Notre Dame uses “athletics as an opener for discussions with alumni,” said Lennon. “But football is only a four-hour session once a week.”
There are 100,000 Fighting Irish alumni and the school boasts a strong connection to them. There are 130 alumni clubs in the United States and 40 more overseas. Fifty-two percent of these alumni give annually, with an impressive average gift of $1,612. The percentage contributing shoots up to 80 percent during special campaigns. But most importantly, Lennon says, there’s no decline in giving during bad seasons. Notre Dame alumni give to the school irrespective of football. And unlike the anecdotal evidence of Ohio State’s Michael Colley and others, Lennon has some data to back him up.
In 1984, two Notre Dame professors, John F. Gaski and Michael J. Etzel, published a study in the journal Social Behavior and Personality which strongly suggested that there was, in fact, no causal relationship between sports and alumni fundraising. They sampled 99 universities, almost all with Division I-A athletic programs—schools such as Syracuse University, UCLA, Duke, and Georgia Tech.
Over the course of a nine-year period Gaski and Etzel measured football and men’s basketball winning percentages against measures of benefactor generosity. Gaski and Etzel noted total contributions to a school and its annual fund, alumni contributions to the school and its annual fund, and contributors as a percentage of alumni solicited.
Surprisingly, the study concluded that the performance of big-time sports teams had no meaningful effect on monetary contributions to the school. Only a handful of schools showed any pattern of causality. Of those schools, one-third seemed to indicate that a higher winning percentage actually resulted in decreased giving. It seemed safe to say that the conventional wisdom was exploded.
Gaski and Etzel did leave open one possibility. They posited that “perhaps successful football and basketball teams do have an impact on fundraising but only as a cumulative effect built up over a great number of years.” In other words, “successful conduct of an athletic program enhances a school’s public image which, ultimately, translates into increased donations.”
The University of Connecticut subscribes to this third way. After more than a decade of contending for a national title, the Huskies finally won the NCAA tournament in 1999. It was the culmination of sustained drive by coach Jim Calhoun, who had rescued the program back in 1986.
Ken Cutler, the chief constituent development officer for athletics at UConn. said that while “there’s no scientific proof that [sports] helps general alumni giving, it does help giving to athletics, which may be tied to where you sit at games.” Cutler explains that winning helps in small ways, like throwing fundraising dinners with the coach and creating “championship levels” of alumni giving.
Edward T. Allenby, the school’s vice president for Institutional Advancement and president of the University of Connecticut Foundation, explains that tying alumni giving to seats is almost universal “whenever you have a demand that exceeds supply. What we do is we ask people to contribute to the athletic program and they get points for giving over a period of time. The people with the most points get first shot at the best seats.”
This in turn helps wean the athletic department off of university funding. At UConn, “the athletic program was very heavily supported by the university budget, and now it’s not. They basically support themselves.”
Allenby takes a long view of fundraising. He told the New York Times, “There’s no doubt that sports can play a significant role in helping raise money for a university.” But not in a “direct, tangible way.”
“I believe in a market philosophy,” he explained. “It creates an opportunity for branding.” Allenby points to an “aura” that UConn’s championship created which gave the school a media burst and a chance to establish itself as a national commodity. More publicity leads to an increased number of applications, something the school’s director of admissions has already predicted.
When the applicant pool widens, schools can become more selective, picking better students. With better students, their alumni become more successful, and eventually, the more successful alumni hand over increased donations.
To a large extent, UConn. is already seeing some of this from its pool of 100,000 alumni. Five years ago contributions to the university totaled $6 million. In 1997, the number jumped to $20.4 million, with alumni contributions averaging $385. Just one year later, the average gift had risen to $494, for a total of $25.6 million—an increase of more than 300 percent. “Are sports directly responsible?” asked Allenby. “No. Are they a factor? Yes.”
Allenby may be on to something. The mere presence of a big-time sports program may be enough to show economic gains at schools such as the University of Michigan, irrespective of the team’s performance. Increasing alumni giving is a different matter. Smart management of the school’s development program is every bit as essential as a good quarterback or a crafty point guard.
Jonathan V. Last is a reporter for the Weekly Standard.