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Email from O'Day about the WAC, BSC & More.

Potomac Griz

Well-known member
Found this over on Bobcat nation. Apparently it's an email O'Day sent.
Very interesting... Especially the parts about the Playoff system losing a ton of money, the television revenues being incredibly unfair to the Griz, and that O'Day thinks that if we had moved to the WAC a few years ago, we'd likely be one of the teams invited to the MWC..

--
Jim O'Day wrote:


I understand your concerns – you are not alone. This is, perhaps, the most critical decision to ever face the intercollegiate athletic program at The University of Montana.


With state funding flat and student athletic fees holding tight, and with expenses growing year-by-year at a steady pace (at least $250,000 per year alone in just scholarship costs and related room/board costs for out student-athletes), we find ourselves at a cross roads. With revenues presently capped at about $13 million per year, we are having to find ways to cut expenses… and one option may have to be scholarships to out-of-state student athletes if we cannot find new revenue sources. We realize this could hurt our competitiveness as we cannot just take out of certain non-revenue generating sports because of Title IX issues. In addition, our insurance continues to rise, as does rent and travel. We can assume our expenses will jump at least $500,000 annually… and really no new revenue to meet these increases. We have continued to cut our expenses about $250,000 or more per year for the past three years…. But now we are down to the bare bone. Any further cuts will affect programs. You can see that already --- our entire budget for recruiting for all 14 sports is $178,000; at Montana State it’s $408,000 per the recently released NCAA audit numbers.


Currently, we charge the highest prices at the Football Championship Subdivision level for football tickets. How much more can we ask of our fans to try and keep us competitive (there are no guarantees). We generate about $4.2 million in football tickets right now…. Twice the $2.1 million brought in by Appalachian State at No. 2 amongst FCS schools. By comparison, Montana State brings in about $1.2 million per year – Washington State at $3.8 million – and Idaho at $900,000. To stay with us, MSU is making up the difference with institutional support and student athletic fees (MSU is at $144/student/year; UM is $72/student/year; the UM and MSU athletic budgets are almost identical – yet the expense lines vary because of our private funding successes). Student-athletic fees vary across the country. At James Madison, they are $1,400 per student per year. Old Dominion and Appalachian State are about $700 per student/year; while the average in the Big Sky Conference is $200/student/year. Note: Northern Arizona does not yet pay a student-athletic fee. Instead, they get the same state appropriation as Arizona and Arizona State – or about $8 million per year. On the other end of the spectrum, Sac State receives little institutional support, yet the student-athletic fee is about $265/student/year --- and generates almost $9 million for the athletics department.


Here’s an estimated breakdown of how we produce our revenues….


Football tickets $4,200,000 (MSU - $1.2 million)

Institutional support $4,500,000 (MSU - $6.7 million)

Grizzly Scholarship Association $1,500,000 (MSU - $1 million)

Student Fees $1,000,000 (MSU - $1.8 million)

Corporate/Grizzly Sports Prop. $ 650,000 (MSU - $350,00)

Men’s basketball $ 400,000 (MSU - $200,000)

Women’s basketball $ 350,000 (MSU - $50,000)

Game guarantees $ 150,000 (MSU - $800,000)

NCAA monies $ 300,000 (MSU - $300,000)

Big Sky Conference $ 125,000 (MSU - $125,000)

Television $ 75,000 (MSU - $65,000)

CLC $ 20,000 (MSU - $160,000)


Now we face the ever-mounting challenge of how to produce more revenue?


At the same time, we also have Title IX issues that Montana State does not have. UM has a 54% female population; Montana State is 54% male. We have a 40% female to male student-athlete ratio (we need to be at 54% or close – or spend 54% of our funding on female sports – neither of which is possible with football. Montana State is just the opposite as it needs a ratio of about 54% male, or 54% spending on male sports… thus, not an issue to them). We are struggling with the third and final prong for Title IX compliance, which is currently under heavier scrutiny based on recent Obama Administration interpretation. We will most likely need to add two female sports shortly or face possibly penalty. Those penalties do not affect the athletic programs – but schools in general as their federal funds/grants/research dollars can be impacted – or about $150 million annually at UM that could be at risk. Thus, somehow, we need to find about $2 million more per year (not counting facilities) to run two new programs. Thus, we most likely will need higher student fees to meet these Title IX and related expenses. Doubt it any of this money would help any other concerns (maintaining football funding, facility improvements, etc.). Also, additional institutional support is out of the question…. It is so tight right now.


Looking at our present revenue structure, one way to increase funding is to consider a move to the Football Bowl Subdivision (NCAA revenues, game guarantees, television, conference dollars and corporate dollars are significantly higher. For example, Idaho receives almost $2.5 million in league revenues, and another $500,000 in television revenues) – but this is not a “for sure” situation either. Instead, it might be considered a gamble – maybe not necessarily a risk. Could we lose fans in the stands? Absolutely. Could we right now if we went 6-5 or less? Absolutely. Would fans continue to come if we charge high prices for Western States of Colorado, or maybe even Montana Tech? Who knows. Will they come if our schedule consists of Idaho, Utah State, Hawaii, San Jose State… and non-conference games against schools such as Boise State, Nevada, Wyoming and Washington State? Possibly. Note: Wyoming is hosting Nebraska next year. In exchange, they will travel to Nebraska in 2012 and 2013. In 2013, Nebraska will pay Wyoming $1 million for making the trip. Last year, Wyoming hosted Texas as part of a home-and-home contract. Those are not available to us now. In fact, WAC or Mountain West schools are no longer allowed to play at FCS schools via by-law changes. They also are recommending they don’t play ANY FCS school – home or away. That begs the question: Who do Montana fans want to see in the next 2-10 years in Washington-Grizzly Stadium. At the FCS level, there are fewer and fewer out there who will come here.


Couple other things to realize:


--- Both the Big Sky Conference and the WAC NEED Montana. Where ever we end, that conference will most likely survive at a higher level. The commissioners of both conferences know that, as do the schools (although some at the Big Sky level would hate to admit it).


--- Montana is THE school west of the Mississippi in the FCS – and the only one since Boise in 1994 to make the championship game (which the Broncos lost). The Big Sky losing Montana would be devastating to some as they need the traveling Montana fans to attend their contests, and purchase tickets. We are also responsible for the television dollars associated with each of the league schools. For example, KPAX/MTN bid $100,000 to television the Griz-Cat game, the next highest bidder was Max Media at $20,000. Our other games were bid at $10,000 each by KPAX; Max Media pays $2,500 to do Bobcat telecasts. Thus, Max Media is spending more money in production equipment; while the schools are getting the cash from KPAX. By league policy, 60% of the revenue from these telecasts go to the HOME team (not UM), 35% to the visitor and 5% to the league. So how out-of-line is this: Last year, MSU received $60,000 of KPAX’s bid (to do UM games), while Montana received $35,000 and the conference $5,000. These are the reasons why Boise State left the Big Sky in the mid-1990s; why BYU and Texas are doing what they’re doing right now. They want to control their television money. The television money should be following UM, but we get outvoted on this 8-1 whenever it comes up.


--- Football at UM breaks even. We generate $6.5 in revenues; and the expenses associated with football at $6.5. Thus, others are probably losing $3-$4.5 million annually. How long can that continue at some schools?


--- We are struggling to find opponents to play in Missoula…. Cost is high, plus we win 93% of our games here. People do not like to come here. Even Division II schools are asking “guarantees” in excess of $125,000 to come here. That cuts drastically into our revenues.


--- We are NOT guaranteed home playoff games. We have been extremely fortunate in the past. To put in perspective, we made about $100,000 for the three home playoff games last year – and sent another $1.1 million to the NCAA. A regular season home game nets between $400,000 and $1 million (Montana State, App State, etc.). Being in the WAC, we are allowed 12 games instead of 11 – and 13 when you play at Hawaii. So instead of $100,000 at max, we would be seeing additional dollars… at a minimum of $300,000.


--- The FCS playoff system is hurting financially. We produced $1.1 million of last year’s budget of $2.5 million. The other 11 games produced less than $1 million TOTAL. The NCAA lost almost $500,000 again, and it will not continue to tolerate to follow this plan. Now we’ve added another round and four more teams…. Being on the committee, and as chair, I know this is a major concern to the NCAA – and a last-gasp reason for changing to Frisco, Texas, in hopes of attracting more attention and support. It won’t help to move the championship back three weeks into January – let alone that it will be taking place 40 minutes away from the Cotton Bowl, which has also been moved to that night. So much for FCS exposure on national television. Just to keep the student-athletes on campus during Christmas will also cost the two schools in the championship an additional $100,000 – none of which is budgeted. And to put in perspective, we LOST $150,000 each of the past two year going to the championship game. Had we won, the incentives for coaches would have put the losses over $200,000 each time. We get no additional revenue for any of this.


--- AND OF UTMOST IMPORTANCE: We are NOT considering the health and welfare of the student-athletes, who are having to spend at least one month of playing 4-5 more games --- which is permanently damaging their bodies – and hurting their academics. This is not fair to them – nor their coaches. This is where all of us are selfish, and want the playoff system vs. a bowl. At the FBS level, there is a month off to recover bodies, take care of academics and finals, and at the end, a reward of a bowl and some fun --- and the schools don’t lose money like we do at the FCS level.


History will determine if the decision by the new President (Royce Engstrom) to either remain where we are, or take a new direction, was correct. There are no easy answers. Heck, had we gone to the WAC a few years ago, we’d probably be in a much more lucrative Mountain West Conference right now with schools we consider on academic par – Wyoming, Colorado State, etc. Who knows what will happen. I would venture to say there are only about four conferences right now who appear to be solid and control their own destiny --- the SEC, the Big 10, the Big 12 (unless Texas and Oklahoma do an “about face” in the next few years) and the Pac 12 Even the ACC and the Big East have issues, let alone those like Conference USA. The Mountain West is starting to look more like the old WAC (especially if TCU bolts, which is likely). Could that mean a merger of the Mountain West and WAC down the road…. Again. This could be a distinct possibility. That being said, where does that leave the Big Sky? Should the FCS fail – which is another possibility, especially with Appalachian State, James Madison, Villanova, Delaware, Georgia Southern, Richmond and others being considered for moves into other conference alliances within FBS conferences – would we be all alone? How many schools in the Big Sky would still be offering football, or would we become a basketball conference? Would it even be Division I, or would we be forced out to Division II? If you don’t have an invitation from a Division I conference, you may have no choice. This may be the only opportunity UM gets to be “invited” to a true Division I conference.


As you can see, there are no easy answers – and it is very, very complicated. These points and many others will be presented --- and have been closely reviewed and monitored by our national consultants --- who do these independent studies for schools for a living. Other responsible schools are doing the same, as are conferences. They give you the most accurate, up-to-date information available.


Finally, I will end this long message with an interesting observation by the consultants.


In asking faculty and deans who are their “peers,” they mentioned schools such as Idaho, Washington, Washington State, Oregon, Oregon State, Nevada, Wyoming, Colorado and Colorado State. The consultants asked why no Big Sky schools – with the exception of Montana State for “tied in” reasons,” the faculty responded they do not see the Idaho States, Eastern Washingtons, Northern Colorados, etc., as “peer academic institutions.” Au contraire, the consultants’ studies show: “You are who you hang out with.” This is true across the board in life --- and here as well. Thus, this is extremely important to consider as well as we move forward.


Right now, we have a heavy saturation of Montana students attending UM (1,500 more Montana residents now attend UM than MSU – hard to believe… a complete turn-around from 10-15 years ago). But, census reports show the numbers of Montana high school graduates spiraling downward rapidly. Each Montana student costs UM about $2,300… a loss-leader for us in the business world. Thus, they need higher tuition being paid by out-of-state students to make up the difference. That out-of-state market is becoming increasingly competitive… and national exposure from an athletic program can help open the door to those out-of-state students who might consider coming here. This, too, has to be considered in any decision making…. A vision for future enrollment.


I have a motto: “Don’t make decisions based on ego or emotion. Base them on fact and figures.” That will be no different here. Right now, our emotions are high… we want what we had… We like being at the top and play for championships bigger than the Big Sky Conference – but we have to define “at the top of what?” We have great regional/state-wide recognition, but not much nationally. Look at the direction Boise State is taking. The consultants believe Montana could be the next Boise State – not the next Idaho. Actually, Idaho may now be in a better financial situation than we do – and their college is growing nationally.


Today is a new day. It is NOT business as usual – particularly in the area of intercollegiate athletics at the NCAA Division I level… where budgets range from $8 million annually to Texas and Ohio State at $120 million.


I’m sure you see now why this will be such a difficult decision by President Engstrom – and one that will have to be made in the very near future. We will feed him all the latest information, but ultimately, it will be his decision --- and will have to be supported by the Board of Regents. Wish it were easier, but it isn’t. At least UM has options --- others are only followers in all of these discussions. We’re in a good place… and that separates us both academically and athletically from the others.

Keep the faith …. And GO GRIZ!!!!

Jim O'Day
Director of Athletics
The University of Montana
Phone: 406.243.5348
--
 
--- The FCS playoff system is hurting financially. We produced $1.1 million of last year’s budget of $2.5 million. The other 11 games produced less than $1 million TOTAL. The NCAA lost almost $500,000 again, and it will not continue to tolerate to follow this plan. Now we’ve added another round and four more teams…. Being on the committee, and as chair, I know this is a major concern to the NCAA – and a last-gasp reason for changing to Frisco, Texas, in hopes of attracting more attention and support. It won’t help to move the championship back three weeks into January – let alone that it will be taking place 40 minutes away from the Cotton Bowl, which has also been moved to that night. So much for FCS exposure on national television. Just to keep the student-athletes on campus during Christmas will also cost the two schools in the championship an additional $100,000 – none of which is budgeted. And to put in perspective, we LOST $150,000 each of the past two year going to the championship game. Had we won, the incentives for coaches would have put the losses over $200,000 each time. We get no additional revenue for any of this.


This is what leaps out the most to me. If we stay put, and then the playoffs are abolished by the NCAA several years down the road, what do we do?
 
That email is beyond epic, and really should put a damper on everyone that thinks FCS, the Big Sky, and UM as it currently stands are OK.
 
dub-foncy said:
That email is epic.

It's actually incredibly depressing :( It does give us a good look at some of the financial aspects of moving up or staying put though.

In TV revenue the Griz get 35% of it, while the Home team gets 60% of it. The Griz are the only reason that KPAX even airs the game, for the home team to get 60% of the revenue is messed up...

The Playoff system losing so much money is also depressing.. Want to be even more depressed? Look at the attendance (minus App State and the Griz) last year in the playoffs. The Villanova vs W&M semi-final game had about 4,000 people attend it...4,000.... that was a great game with two very talented teams. You had Villanova's high powered run attack vs one of the top defensive teams in the FCS. WTF?! Only 4,000? Utah State drew over 18,000 fans to watch them beat up on Idaho State earlier this year.

It really does sound like the U of M is going to be forced to do something drastic..either moving up, or cutting out of state scholarships. If we don't move up, and have to cut out of state scholarships, how good do you think the Griz FB program will be after several years of limited out of state players? The playoffs might not be an issue for us then... :(
 
It just goes to show that UM has been carrying the BSC for a while now.

I think of Doug Fullerton as Kevin Bacon in Animal House..... "ALL IS WELL!! ALL IS WELL!!"

I really hope that the BSC doesn't make some sort term offer to UM that keeps the new President holding on to a dream that the BSC will get better, such as short term increase in TV, etc. For those that haven't followed it, this isn't a situation that has just come up this year. The current administration has been aware of this problem for AT LEAST 10 years. They were aware of it the last time UM had the budget crisis in the athletic department that Hogan took the fall for.
 
As I've said in several other posts, it is all about the money and TV revenue.

Big 12 Realignment: TV Revenue Fueling the Race To Expand

http://bleacherreport.com/articles/406030-college-football-realignment-tv-revenue-fueling-the-race-to-expand

How much revenue did your favorite Football Bowl Subdivision school take in in 2007-08? This chart will tell you :

http://blogs.orlandosentinel.com/sports_college/2009/07/how-much-revenue-did-your-favorite-fbs-school-take-in-in-200708-this-chart-will-tell-you.html
 
After five years of threads and speculation, that single email had more information and insight than over 10,000 posts and 200 newspaper articles.

I feel like it's cause for hope.

This is our "What are you willing to do for your university?" moment.

The hard part is out of the way. Now that we are aware of the situation it's time to figure out what needs to be done. I assume a mini capital campaign will need to be undertaken. Use it to fund an umbrella athletic endowment like the big boys do. Figure out which corporate sponsors can best befit by forming relationships with us. Use every opportunity we have to appear nationally to get the word out, Montana is on the way up. There were SO many opportunities we had last year with the NCAAs, and AJ's ESPY nom, and the NC game, and the App State game that we could have used to expand our marketing footprint which is NATIONAL now. We have the people to pull this move off. Get our alumns and their expertise involved.

And call the architects. Were gonna need a bigger boat.
 
FYI

In Jim's communications with this email he did ask that the info he shares stays semi-private and off egriz if possible.

Here's his email on that below:

I would ask you to use this information for explanation purposes only…. Not to distribute elsewhere. This is to be used in looking at all sides to this issue…. And is given to you as valuable members of the Griz community…. Not for public disclosure… so please do not forward to others. Thanks.

Jim O'Day
Director of Athletics
The University of Montana
Phone: 406.243.5348
 
--- The FCS playoff system is hurting financially. We produced $1.1 million of last year’s budget of $2.5 million. The other 11 games produced less than $1 million TOTAL. The NCAA lost almost $500,000 again, and it will not continue to tolerate to follow this plan.

The NCAA can say they "lost" money but it's BS. The NCAA, as a whole (FBS/FCS), is making $$$$$$$$$$$$$.
 
So now this e-mail has been posted in whole or in part on eGriz, Bobcatnation, and championshipsubdivision.com. Even if it doesn't start getting cross-posted to places like Bisonville and Panthernation.com, it's still a hell of a lot of toothpaste to put back in the tube. I have always been nervous about people coming in here and quoting e-mails from Jim. On the other hand, it isn't that different from what he has been putting up on his Facebook page.
 
If Jim wanted it private he shouldn't have sent it. There couldn't possibly be an individual privacy right in this deal.
 
GRZFTBL said:
--- The FCS playoff system is hurting financially. We produced $1.1 million of last year’s budget of $2.5 million. The other 11 games produced less than $1 million TOTAL. The NCAA lost almost $500,000 again, and it will not continue to tolerate to follow this plan.

The NCAA can say they "lost" money but it's BS. The NCAA, as a whole (FBS/FCS), is making $$$$$$$$$$$$$.

Yes those are tickets sales, yet I wonder how much ESPN paid the NCAA? Though ESPN did nothing to promote the games in advance.
 
The cats kind of out of the bag already though. It was over on Bobcat Nation (which is where I first saw it), and from what was being said on there it's being forwarded around quite a bit.

There's a lot of good info in there for fans on both sides of the issue... This will help a lot of us understand why the Griz make the move, if we do move up to the WAC.
 
MrTitleist said:
FYI

In Jim's communications with this email he did ask that the info he shares stays semi-private and off egriz if possible.

Here's his email on that below:
Well it's already everywhere, so someone he originally emailed betrayed that trust. Considering it originated on BCNation, I wouldn't doubt this was done on purpose.
 
Why would Engstrom have the final say? Curious. There's NO security net for failure at the next level and the $$$$ are more "hope" than anything. Also: Why did this appear on Bobcat Nation? The Cat faithful have to be laughing their asses off right now if this is all true. :laugh: The Wages of Success are New Mexico State, Utah State, Idaho and whomever else. Oh boy. Scoot over Western Kentucky, Marshall and Idaho... there's a new dipshit moving onto the block. :cya: Big Sky Conference.
 
I learned eons ago that if you should assume the worst case if you ever put anything in writing. I doubt Mr. O'Day is naive enough to believe it wouldn't be broadcast far and wide.
 
Grizmayor said:
Why would Engstrom have the final say? Curious. There's NO security net for failure at the next level and the $$$$ are more "hope" than anything. Also: Why did this appear on Bobcat Nation? The Cat faithful have to be laughing their asses off right now if this is all true. :laugh: The Wages of Success are New Mexico State, Utah State, Idaho and whomever else. Oh boy. Scoot over Western Kentucky, Marshall and Idaho... there's a new dipshit moving onto the block. :cya: Big Sky Conference.


Can not see why any Bobcat fans would be laughing, the info in that email does not send a pretty picture for them, the Big Sky, or FCS playoffs.
 
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