college-football-money.jpg

Michigan State and Michigan combined for more than $150 million in revenue off their football teams in 2014-15.

(Milt Klingensmith | MLive.com)

We've seen what they've done on the field. Now, let's take a look at their books.

A review of Michigan and Michigan State's NCAA financial reports from the past five fiscal years -- obtained by MLive through records requests -- reveals several interesting trends related to how much money the state's two Big Ten football programs earn.

For the fiscal year 2014-15, Michigan took in $88 million from its football program, while Michigan State brought in $63 million.

How exactly do they go about earning all that cash? The NCAA has 18 categories of revenue that schools can report, but the bulk of the money comes from three:

Contributions: Schools rely heavily on the financial support of alumni and other fans. Contributions can come from individuals, corporations, foundations, clubs, or others who give gifts specifically for the football program. For Michigan and Michigan State, contributions typically make up around 25-30 percent of football revenue.

Ticket sales: Both schools sell hundreds of thousands of tickets every year for home games, and the cash adds up. Michigan has made more than $45 million in some years from football ticket sales, and for both schools this revenue can make up between 30 and 50 percent of the total pie.

NCAA/Big Ten distributions: Television networks like ESPN pay big bucks for the rights to broadcast college football games, and that money goes from your cable bill to the networks to Big Ten member schools through the revenue sharing program. In recent years, that number has topped $13 million per year per school for football alone. This category also includes other payouts, like bowl bonuses.

The rest of the school's football revenue is a smattering of smaller sources, including merchandise sales, sponsorships, concessions, parking, guarantees for away or neutral-site games and more.

Here's a look at how that pie would break down for 2014-15:

U-M football revenue 2014-15 | MSU football revenue 2014-15

Of the $108 million in revenue Michigan State totaled in 2014-15, football revenue accounted for 58.4 percent. That's compared to 16.7 percent of revenue for men's basketball (Michigan State counts $20 million, nearly 20 percent of its total revenue, as non-program specific, largely from royalties, licensing and donations)

Michigan's football team made up 57.8 percent of its total revenue pie, of more than $152 million, in 2014-15. Its basketball team brought in just nine percent of revenue (Michigan's books include $44 million in non-program revenue).

And now we'll break down each category, starting with total revenue:

*****

• Michigan reported a $88 million in total football revenue in 2014-15. That actually was down from its five-year high of $91 million in 2013-14, as the Wolverines slipped from 7-5 to 5-7 and missed a bowl game. Its ticket sale revenue fell $6 million in the timeframe.

• Michigan State saw a 40 percent increase in total revenue over the five-year period, from $45 million in 2010-11 to $63 million in 2014-15. Its increase was steady every year.

• According to data provided to the US Department of Education (which uses different accounting methods and produces different final numbers for each school) Michigan was No. 1 in the Big Ten in football revenue in 2014-15, while Michigan State was No. 5. Ohio State was No. 2, followed by Penn State and Nebraska.

*****

Through the ups and downs of the on-field performance in the last five years -- including a 7-5 season in Rich Rodriguez's final year, Brady Hoke's 11-win debut season, then a decline to five wins in 2014 -- contributions to Michigan's football program have continued to increase.

• Each one of the five seasons brought an increase in contributions to the football program, up to $27.5 million in 2014-15. The biggest single-year jump, of $2.7 million, came in 2012-13, Brady Hoke's second season that immediately followed his Sugar Bowl year.

Michigan State's football contributions seem to be tied closely to on-field performance. The program saw its smallest increase in contributions in 2012-13, when the team went 7-6 after back-to-back 11-win seasons.

• Contributions to the MSU program saw the biggest increase in 2013-14, when the Spartans broke through for a 13-1 season and the school's first Rose Bowl appearance since 1988. Contributions that year jumped nearly 40 percent, up to $20.9 million.

• Despite an 11-win season in 2014, the excitement couldn't compare to the Rose Bowl year, and contributions fell back to $18.6 million.

*****

Ticket sales revenue has by far the most fluctuation of any revenue category. That's due largely to the quality of each team's home schedule -- and as Michigan has found out, the number of home games scheduled.

• Michigan State's only year-to-year ticket revenue decline, of 10 percent, came in 2013, the Spartans' most successful season on the field. That's because Michigan was the only marquee home game for the Spartans that year. The following season brought home games against Michigan, Ohio State and Nebraska, and ticket sales revenue grew by 8 percent.

• Michigan also saw a fluctuation due to schedule quality. It brought in $46 million in 2013 when it hosted Notre Dame at night and Ohio State to finish the year. That number dropped nearly 15 percent in 2014 despite the same number of home games, as Michigan had an unappealing home slate that featured Appalachian State, Miami (Ohio), Utah, Minnesota, Penn State, Indiana and Maryland.

• Michigan's biggest ticket revenue season came because of the number of home games, not the quality. In 2011, the Wolverines hosted eight games for just the second time in school history. Home games at Michigan were worth an average of $5.8 million in ticket sales during the five years studied.

• The following year, 2012, the Wolverines hosted just six games. That led to a 20 percent drop in ticket sale revenue and a 4 percent drop in total revenue. However, Michigan's loss in ticket sale revenue was offset that year by its neutral-site opener against Alabama in Dallas and the $4.7 million guarantee that came with it.

• Michigan State did not raise ticket prices during the five years studied, before raising them for this season. Michigan last raised ticket prices in 2011.

*****

While ticket sales are the most up-and-down category of revenue, some of the steadiest increases in revenue came from NCAA and Big Ten payouts, particularly from television contracts.

• Between 2010-11 and 2014-15, both Michigan and Michigan State reported multi-million dollar increases in the category, including year-to-year increases every year. Michigan State jumped 24 percent, while Michigan jumped a full 90 percent (conference payouts are the same per school, but the figures differ due to differences in accounting methods. The trends, though, largely remain the same)

• The Big Ten signed a 10-year television agreement in 2007, and also debuted the Big Ten Network that year, and revenue has climbed each year of the contract. That's led to television revenue becoming a larger and larger portion of total revenue, and to decisions like expansion being driven largely by television revenue.

• There's been speculation that television revenue is a bubble that could burst. But with the Big Ten reportedly signing a new $2.64 billion television contract, it won't be happening anytime soon for Michigan and Michigan State. Starting in 2017-18, expect to see this figure jump significantly again, pouring even more cash into the coffers.

*****

Finally, here's a total look at the last five years for Michigan and Michigan State, sorted by total revenue:

Click here

to load this Caspio

Cloud Database

Cloud Database

by Caspio