Michigan football poised to make millions for university from championship game
Michigan Stadium in Ann Arbor seats the most fans of any college football team in the U.S., driving millions of dollars into U-M’s athletic department and businesses around the city during every home game. Photo credit: Shutterstock.
by Paula Gardner (Bridge Michigan)
The University of Michigan Wolverines will fight for the College Football Playoff National Championship Monday night, but no matter the outcome of the game, the university has likely already won big.
The team’s No. 1 ranking, combined with the brand enhancement the university gains from the football squad’s success, goes far beyond the playing field, said David Wyld, professor of management at Southeastern Louisiana University.
“For all of the scholarship that goes on in Michigan, you cannot buy the kind of publicity that you’re getting this week and into next week,” Wyld told Bridge Michigan.
Wyld co-authored a 2021 study that showed how success on the football field translates into success for the school as a whole. He expects U-M’s success — it has appeared in the CFP three straight seasons —to produce a spike in donations and public interest.
Some academics refer to this dynamic as “The Flutie Effect,” named for Doug Flutie, the former Boston College and NFL quarterback, whose miraculous college victories in 1984 were said to boost applications to Boston College by 30 percent over the next two years. That in turn elevated the school’s academic selectivity rating.
Wyld predicts donation increases this year, though neither he nor U-M’s athletic department had projections. The University of Georgia’s football program saw a 13 percent increase in revenue after winning the national championship in 2021, including a donation record of $86.4 million, according to The Athletic.
The University of Michigan Alumni Association is looking ahead to more fundraising opportunities after experiencing what it calls “off-the-charts interest” in attending Monday’s game.
The game gives the group “a chance to engage more alumni,” Shumaila Kinnear, vice president of university relations and the alumni association’s chief development officer, told Bridge Michigan in an email.
Here’s what to know about the economic stakes for the university:
Already a powerhouse
Studies show that the biggest surge in fundraising and applications tend to come when run-of-the-mill football programs achieve sudden success. Boston College is one example. A more recent beneficiary is Texas Christian University. The Horned Frogs were the undefeated darling of college football during the 2022 season, landing in the CFP and upsetting Michigan to reach last year’s national championship.
TCU, a private school in Fort Worth, Texas, reported more than $2.1 billion in earned media coverage even before it played for the championship last year, giving university leaders a chance to sell its academics to national media outlets. In April, TCU reported that applications to attend the school were up across the board, with 31 percent of early decisions applicants saying TCU was their top choice. Visits to the school’s website homepage were up 125 percent.
“There is no doubt that the impact of our football program’s performance this year will benefit TCU’s academic mission for years to come,” Chancellor Victor J. Boschini, Jr. said.
Michigan isn’t TCU. It’s already an academic and football blue blood with one of the nation’s largest endowments. So whatever gains it makes from its playoff run this year are unlikely to match the percentage increases achieved by schools with mediocre football programs that catch fire. It’s more a testament to the rich getting richer.
Even so, U-M’s alumni association said the football team’s recent victory over Alabama generated crazy enthusiasm: web visits in five days after the team’s Rose Bowl victory totaled 75 percent of a full month’s worth of traffic.
The economic benefits of U-M’s football program already are well-known in Ann Arbor, where game days generate an estimated $10 million or more in spending from activity that radiates from Michigan Stadium, the nation’s largest, where crowds can exceed 115,000.
“It’s a ton of money,” said Chad Wiebesick, director of public affairs for regional marketer Destination Ann Arbor.
Nationally, the team’s brand appeal is undeniable. U-M is the winningest team in college football history, and its battle this year against Ohio State was the most watched college game of the regular season. The Wolverines attracted the fifth most eyeballs in college football over the fall season, according to an analysis of Nielsen Ratings, despite playing a slew of overmatched teams early.
Division 1 college sports is big business, and few programs are bigger than Michigan’s, whose athletic department runs an operating budget just shy of $215 million. The school’s 2022 budget ranked fourth among U.S. athletic programs, according to a USA Today database based on the College Athletics Financial Information (CAFI) Database.
Michigan also ranked fourth in expense totals, reaching $193 million in the USA Today tally, for an effective “profit” that year of $17 million based on data submitted to the National Collegiate Athletic Association (NCAA). (Most programs do not make money off athletics.)
Last spring, U-M Athletic Director Warde Manuel projected a $200,000 budget surplus when he submitted the department’s budget to the U-M Board of Regents.
U-M’s football team effectively supports many of the other athletic programs at the university. Each Michigan home game, for example, generates about $8.7 million for the athletic department.
Football expenses
U-M spent more than $50 million on its football program in 2022, according to the Knight Foundation report. About 50 employees run the program, ranging from coaches and analysts to recruiting and administrative roles.
Among Michigan’s expenses were $17,421,486 in coach salaries in 2022, roughly unchanged from a year earlier — but $1.7 million less than in 2020, when the team, facing up to $200 million in less-than-expected revenue due to COVID-19 game cancellations, laid off 21 administrators.
When it comes to the National Championship game (and the Rose Bowl), Michigan received travel expenses through the Big Ten conference. This year, that meant $6 million to the conference for Michigan making the Rose Bowl, with no additional award for the championship game, according to the Business of College Sports (BCS) website.
The Big Ten, according to the publication Business of College Sports, does not give bonuses to schools that make the championship games.
Michigan’s prominence and visibility will almost certainly grow, regardless of the outcome of Monday’s game. Last year, the Big Ten signed a seven-year, $8 billion television contract with CBS, Fox and NBC, the largest in college athletics history.
The deal promises to bring the conference — which is expanding by four teams — and its leading programs even more riches. The Big Ten estimates each school will receive $80 million to $100 million dollars annually just from television rights.
The players
Monday’s championship game will be the third since the NCAA approved a “Name, Image, Likeness” policy allowing student athletes to profit from their sports visibility.
The value of deals is likely to increase for U-M players after their undefeated season and Rose Bowl victory, no matter the outcome of Monday’s game, said Wiebesick of Destination Ann Arbor.
“It increases their prominence, so they’re probably going to be getting offers left and right,” Wiebesick said.
Destination Ann Arbor recently completed an NIL deal with Will Johnson, a star sophomore defensive back from Detroit, and will roll out an Ann Arbor marketing campaign soon.
So far, the top NIL dealmaker on the Wolverines is junior quarterback J.J. McCarthy, who ranks 11th nationally with an estimated $1.4 million in contracts, according to the ON3NIL database. Senior running back Blake Corum is the next Wolverine on the list, coming in 31st in the U.S. with about $885,000 in deals.
Fan gear
Michigan once reliably placed among the top collegiate brands when it comes to the T-shirts, hats and koozies that the team’s true fans want not just on gameday, but year-round.
A decade ago, national collegiate apparel sales was estimated at a $4.6 billion market, and U-M athletics was among the top four brands. Since then, estimates are harder to find, as companies compete not just for sales but for lucrative licenses to make and sell items.
But the Wolverines had to fight their way back to the top after rivals including Ohio State, Georgia and Penn State crowded them out of the top 15, according to 247sports.com.
The Rose Bowl victory and national championship game will help, said Scott Hirth, owner of The M Den in Ann Arbor. The retailer is U-M’s licensed game-day seller at the stadium, and its four Michigan stores and website are blooming with post-bowl sales.
“The world has changed a lot since 1997,” said Hirth, recalling the Wolverines’ last national championship game. “The market for licensed products is so much bigger.”
The retailer had two stores and a minimal web presence in 1997, Hirt said. Today, the M Den carries about 5,000 items “and we’re shipping 24 hours a day to Michigan fans.”
The full line of Rose Bowl merchandise reached M Den for distribution on Wednesday, and the most popular items so far are T-shirts and hats that fans want to wear for Monday’s game.
A hot seller is a $50 embossed crew neck sweatshirt, celebrating the Rose Bowl win.
“The roses add a little red (to maize and blue), and we didn’t have to worry about the Ohio State angle,” Hirth said, laughing.
“People have just loved it. We will probably carry it for a year now.”
You must be logged in to post a comment Login