An inside look at the finances of the Michigan women's basketball team

Monday, April 16, 2018 - 6:20pm

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According to a financial report authored by the NCAA Membership Financial Reporting System — data requested in a Freedom of Information Act request submitted by The Michigan Daily and also in the Equity in Athletics Data Analysis report submitted by the University — the Michigan women’s basketball team spent just over $4 million in the 2016-17 season.

With a roster of 15 student-athletes, that comes out to $266,666 per athlete each year, or $1.08 million over a four-year college career. For comparison, that equates to a year’s cost of attendance for about 27 out-of-state or 40 in-state students.

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Based on expense records found in the Equity in Athletics Data Analysis submitted by the University to the U.S. Department of Education, Michigan has spent an average of $2.66 million a year since 2003. When looking at the last five years, the Wolverines have disbursed an average of $3.5 million.

To put that in perspective, they made $407,000 in revenue last year.

The Michigan baseball and softball teams — squads with comparable revenue figures — spent significantly less than women’s basketball. According to the NCAA financial report, baseball spent $2.7 million while softball spent $2.6 in the 2016-2017 school year — meaning, the women’s basketball team spent about 50 percent more. The hockey team, which had a revenue of $3.1 million, spent less than women’s basketball at $3.6 million.

In fact, the only two teams with higher expenses than women’s basketball were men’s basketball and football, with $8.8 million and $46.2 million, respectively.

So where is the money going?

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About 30 percent, or $1.22 million, of the team’s total expenses went to the coaching staff’s salary, benefits and bonuses. Head coach Kim Barnes Arico’s compensation was just shy of $693,000 while her assistants made $529,000 collectively. Arico’s total was the highest of any coach of a female sport at Michigan and the third-highest overall behind football coach Jim Harbaugh and men’s basketball coach John Beilein.

That’s an average salary relative to other Big Ten women’s coaches and is about half as much as Ohio State coach Kevin McGuff.

The next largest expense came in the form of athletic scholarships and aid. Of the 15 players on the roster, 13.4 total scholarships were given out and one scholarship was attributed as a “exhausted eligibility or medical equivalency.” The total amount of financial assistance was $1.03 million.

Women’s basketball spent more on financial assistance last year than the total yearly operating expenses of the men’s golf team ($647,000) and the women’s golf team ($813,000) and about the same as men’s gymnastics, men’s and women’s tennis, water polo and wrestling.

The third-largest expenditure was the team’s in-season travel. Taking buses and chartered planes around the country ran up a tab of over $700,000. When including per diem and meals on road trips, that number rises well over $800,000.

How do they stack up in the Big Ten?

On the surface, the Wolverines’ expenses are large. However, relative to the rest of the Big Ten, Michigan is somewhat conservative. For the 2015-16 season, the Wolverines had the fourth-lowest total operating expenses in the conference at $3.7 million. Comparatively, the University of Nebraska, the University of Wisconsin and Ohio State University each spent over $5 million.

But where Michigan truly lags behind is its ability to make money.

The Wolverines had the Big Ten’s second-lowest operating revenue during 2015-16 at $328,000. Even with an $80,000 increase in total revenue for the 2016-17 season, Michigan still struggles to produce funds. The team made $168,000 from ticket sales and $48,000 from parking and concessions according to the NCAA financial report released.

53,400 fans attended games in 2016-17 according to the Big Ten and NCAA official websites. Dividing total season revenue — comprised of aspects such as ticket sales, parking and concessions at each game — by total attendees on the season, Michigan earned $4.04 per attendee. The Wolverines’ average attendance of 2,672 ranked ninth in the conference and 45th in the country.

Even if Michigan was to have the same attendance as South Carolina — the school with the nation’s highest attendance — the Wolverines still would’ve lost $3 million.

Michigan is a product of the system.

Yes, Michigan may have difficulties generating revenue. However, the scope of this dilemma expands beyond the Wolverines or even the Big Ten.

As a whole, NCAA women’s teams struggle to stay in the black.

Even the ultimate powerhouse Connecticut — a program that has made eleven consecutive Final Fours and has won ten national titles since 2000 — isn’t profitable. In 2016-17, the Huskies produced a revenue of $3.55 million while spending an astronomical $7.9 million.

While Connecticut was able to make $2.18 million in ticket sales, its costly expenditures added up. The largest portion of the Huskies’ expenses went to Coach Geno Auriemma, who made $2.88 million last year. His staff added another $1 million.

If you take the difference between Auriemma’s and Barnes Arico’s salaries and subtract that from Connecticut’s total expenses, the remaining figure is roughly $5.1 million – not too far off from Michigan’s expenses of $4 million.

But the Huskies aren’t the only elite women’s program losing money. Louisville – another team in this year’s Final Four and a perennially elite team – takes a financial loss. Last year, the Cardinals saw a revenue of $1.28 million while spending $4.8 million.

Why aren’t women’s basketball programs making money?

The majority of women’s basketball programs aren’t profitable. In fact, many women’s basketball programs lose millions.

Title IX plays a factor in these lofty expenditure numbers.

In 1972, the Title IX Education Amendments were signed by former President Richard Nixon. The legislation dictated that no individual will be discriminated against due to their gender in educational programs. This includes athletics.

“No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subject to discrimination under any educational program or activity receiving federal financial assistance,” Nixon said in 1972.

Based on a report by the National Center for Education Statistics, between 2000 and 2016, postsecondary degrees obtained by women have increased; 7 percent in bachelor’s degrees and 4 percent for master’s or higher education.

The law has also helped increase gender equality in athletics. From 2004 and 2010, women’s participation in NCAA Division I and III athletics has increased 14 percent, as well as 21 percent in Division II.

The Women’s Sports Foundation explains how Title IX is enforced in regards to athletics.

“A three-part test for participation opportunities that determines if institutions provide female and male students with equal athletic opportunities.” Those three parts are “Proportionality,” “History and Continuing Practice,” and “Effectively Accommodating Interests and Abilities.”

Opportunities, however, don’t necessarily mean equivalent expenses.

“The only monetary requirement of Title IX deals with the area of scholarships. Scholarships must be allocated in proportion to the number of female and male students participating in intercollegiate athletics,” says the Women’s Sports Foundation on its website.

In an email to The Daily, University Associate Athletic Director Kurt Svoboda explained that the concept of proportionality means, “Males and females participate in athletics in numbers substantially proportional to their respective enrollments in school.”

Proportionality also applies to the total number of scholarships. Because schools typically must make up the number of scholarships awarded for sports with no female equivalent (such as football and wrestling), women’s teams often have more scholarships granted than their male counterparts.

This is clear in basketball, where the average Division I women’s program has 14 scholarships to men’s 13, according to College Athletic Associations.

With the national average of a women’s basketball scholarship being about $17,000, according to a link provided by Svoboda via email to The Michigan Daily, the typical women’s college basketball program spends $238,000 on financial assistance.

At a school like Michigan, where out-of-state tuition can cost upwards of $62,000, scholarships for the women’s basketball program runs around $1 million.

Another contributing factor to these relatively high expenses is the high market rate for head coaches.

Based on a study conducted by AthleticDirectorU in partnership with USA Today, the average compensation of a women’s head coach in the Big Ten was $664,000 in 2016-17. The highest conference average was the Atlantic Coast Conference, where coaches earned around $760,000.

The system doesn’t look like it’ll change.

The high expenses of women’s college basketball teams are very much a byproduct of the system. In order to operate, major programs like Michigan are almost required to spend exorbitant sums on coaches and scholarships while generating relatively minimal fan draw, and thus, little revenue.

If this year’s Women’s Final Four is any indication, the trend will continue.

According to the NCAA, the women’s national championship game between Notre Dame and Mississippi State averaged 3.5 million viewers, reduced from 3.8 million last year. The entire women’s Final Four generated 7.62 million viewers – for comparison, the men’s semifinal games garnered 97 million.

All factors considered, it’s extremely difficult for any women’s college program to be profitable.

And Michigan is no different.

But with lucrative football and men’s basketball programs more than making up the difference, schools like Michigan can afford to spend on non-profitable sports. It's clear the Wolverines invest in the optimal student-athlete experience. And it’s apparent that the women’s basketball team is an integral part of that experience, regardless of the finances.