Spartan Athletics $15.4M Loss Pales Compared to Peer Schools

The pandemic-disrupted 2020-21 fiscal year has put Michigan State’s athletic department behind $15.4 million, according to documents provided to USA Today via the Freedom of Information Act, according to a Detroit Free Press report.

That is largely because of the lack of fans in the stands a year ago. The state of Michigan and the Big Ten did not allow fans to attend football and basketball games for much of those seasons, which had the biggest impact on MSU’s bottom line.

Michigan's Spartan Athletics' $15.4 million deficit is still low compared to other Big Ten schools. Iowa has a $42 million deficit, Rutgers ran up a $73 million deficit, Nebraska is down $41.5 million and the University of Michigan Wolverines have a $47.6 million deficit.

Documents show MSU was able to slash $43.5 million in expenses last year and spent just under $105 million over the period from July 1, 2020, to June 30, 2021. The athletic department received only $89.5 million in revenues, down $41.1 million from the previous year, the Free Press reported.

The school received just $246,829 in ticket revenues, nearly $22.6 million less than the approximately $22.9 million in 2019-20. That drop accounts for the department's deficit, plus another $7.2 million.

The cancellation of the 2020 NCAA tournament also cost MSU more than $10 million in media rights, with $34.8 million going to MSU, down from $44.9 million in 2019-20. There was no bowl game during the 2020 season, which added another loss of nearly $3 million.

It was a financially difficult three-year tenure for former athletic director Bill Beekman, who was promoted from interim to full-time in July 2018. He resigned in August 2021 and was replaced by deputy athletic director Alan Haller in September.

During the 2019-20 year, MSU operated with a $17.8 million deficit that largely grew before the pandemic shutdown college sports in March 2020 and wiped out the lucrative basketball tournament.

Another chunk of the 2019-20 debt came from the one-time $4.3 million retention bonus paid to former football coach Mark Dantonio in January 2020, and the $3 million the university paid to Colorado to buy out the contract of Mel Tucker, his replacement. Dantonio retired less than a month after receiving his bonus.

Beekman told the Lansing State Journal in August that hiring Tucker required a $5.5 million sign-on package outside of his regular salary. Paying contract buyouts for Dantonio’s assistant coaches and hiring new ones to Tucker’s staff also cost several million, with renovations of the football offices and Munn Ice Arena adding to the expenses, the Free Press reported. He also eliminated the school’s men’s and women’s swimming and diving programs after the 2021 season as part of his cost reductions.

In May 2021, Beekman projected MSU’s athletics budget would be operating at a $30 million deficit come fall.