Monday, May 14, 2012

Minnesota Leads Big Ten 

The U of M athletic department leads the Big Ten in the monetary amount of the annual multi-million dollar subsidy that the department receives to cover its expenses.  See the Table in the May 2, 2012 Bloomberg News report.  The Table is based on information in the annual reports of athletic departments to the NCAA.

The total amount of the subsidy is substantially greater than the amount used by the Minnesota Daily in its March 8, 2012 report on The Economics of Athletics:
At a time when state funds are drying up and tuition is increasing, the University's athletics department needed a $2.3 million subsidy from central administration to balance its budget last year.  That's the smallest since the men's and women's departments merged in 2002.
The actual amount of the subsidy from the U of M general fund was $7.8 million, an amount consistent with the amount of the annual subsidy that the athletic department has received for years.
The U of M operating budget for fiscal year 2011 (ending June 30, 2011) shows an allocation of $7,778,861 to the atheltic department from the general fund.  See p. 81 of the June 2010 Board of Regents report.  (See the link to the report in Expensive Icing.)
The U of M report to the NCAA for 2011 shows "direct institutional support" of $2,323,145.  See item 7 of the Revenue/Expense Summary.  The report then shows at item 8 "indirect facilities and administrative support" of $5,455,716.  The total of item 7 and item 8 is $7,778,861, the amount the athletic department received from the U of M general fund.  (A copy of the annual report to the NCAA is available on request to the athletic department.)
The "indirect support" (item 8) covers numerous expenses, including administrative costs, facilities and maintenance, utilities, and debt service.
Omission of the "indirect support" obscures the reality that in fiscal year 2011 the athletic department received $7.8 million from the general fund, an amount that otherwise would have been available to educate students or to provide financial relief to them.  (This is true, of course, for each year that the athletic department receives a multi-million dollar subsidy.)
"When I use a word," Humpty Dumpty said in a rather scornful tone, "it means just what I choose it to mean--neither more or less."
"The question is," said Alice, "whether you can make words mean so many different things."
"The question is," said Humpty Dumpty, "which is to be master--that's all."
Lewis Carroll, Through The Looking Glass (1871)

The most recent NCAA annual report describes "a widening gap between schools with self-supporting athletics programs and schools [such as the U of M] that rely on institutional subsidy to balance their athletic budgets."  See the link to the report in The Gopher "Brand".
For fiscal year 2012 the subsidy to the athletic department from the general fund of the University ($6.9 million)  is substantially greater than the allocation from the general fund to the business school ($3.3 million) or to the law school ($3.6 million).  Such misplaced priorities lead the administration to impose "differential" tuition on the undergraduate business students and to set tuition for law school resident students at more than $32,500 per year.  See Going To Market Part II.  

Michael W. McNabb
University of Minnesota B.A. 1971; J.D. 1974
University of Minnesota Alumni Association life member

Honesty is the best policy?  Bill Gleason


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