The profit is a welcome sign for MSU — which oversaw four consecutive years with budget deficits that ended after the 2007-08 fiscal year.

Associate Athletics Director John Lewandowski said the higher profit margin comes into the program through increases in several areas, including the cost of season football tickets, the number of home men’s basketball games and the amount being donated to the department, among others.

Although Lewandowski said the department has done well, the credit belongs to the way it has positioned itself year after year to sustain the success that it has had.

“There’s no question: Ff you have the success we’ve had — especially traditionally in basketball and recently more in football — you can see that directly relates to increased ticket sales, which impacts the sale of merchandise and also impacts people’s financial contributions,” Lewandowski said. “There’s no question that successful athletic programs can positively impact the bottom line. There’s no question about it.”

Cutting back
To meet the needs of a changing economy, many athletics programs across the country, including MSU, made significant cuts to remain solvent.

The MSU athletics department had a 10 percent across-the-board decrease in the operating budget — the annual budget of an activity — in 2010, Lewandowski said.

Some of the cuts made include going paperless in the press boxes, reducing costs from a media entertainment standpoint and also reducing the number of events where photographers are paid to shoot for the department.

“The biggest thing we want to do, as Mark (Hollis) looked at it, is to make sure whatever decreases we did make, whatever cuts we did make did not negatively impact the student athlete experience,” Lewandowski said.

For other schools, sports budgetary cuts have been more intense.
John Benedick, assistant director of athletics at MIT, said the school made cuts to several of its varsity sports in 2009, including ice hockey, gymnastics and wrestling, among others.

Despite cutting the varsity status of eight sports at MIT, Benedick said each of the sports still exists with club status at the university.

Benedick said although it’s a difficult choice for the school to eliminate some varsity sports, it’s also important to make decisions that will best benefit the university in the overall scheme of things.

“Nobody goes into this business to take opportunities away,” Benedick said. “We were very careful when we had to do our sports reductions and making sure that if students wanted to start or establish clubs in that area or to fill in the existing club we helped with some funding to ease the burden on the existing clubs.”

Increased spending
Amy Perko sees very different trends when comparing athletics and academic spending at Division I universities.

Perko, the executive director of the Knight Commission on Intercollegiate Athletics, said the data compiled by the commission suggests athletics spending is growing twice as fast as academic spending at the 120 institutions in the Football Bowl Subdivision, or FBS.

The Knight Commission is an independent group compiled of current and former university presidents and former student athletes who seek to better connect athletic programs with the academic goals of their respective universities.

Although the salaries of head coaches are rising — MSU head football coach Mark Dantonio makes $1.8 million per year, while head basketball coach Tom Izzo makes $3.4 million, the second most in the nation — many universities are cutting academic spending, including eliminating majors and staff teaching positions, Perko said.

To counter this, Perko said the commission has proposed a system for FBS schools to disclose reports on their respective academic and athletics spending, rewarding those who find a balance and meet a certain academic criteria.

“What’s been happening with the FBS programs is that they’re moving away from some of the core principles that will ultimately preserve intercollegiate athletics,” she said. “The Knight Commission has, from its very beginning, been in support of athletics programs and … (the roles) they play in the lives of the participants and … campus life.”

Pushing the bottom line
There are few who have seen the progression of the MSU athletics department quite like George Perles.

As a former football player and former head football coach at MSU, Perles has been in and around the athletics department on and off since 1958. Now as an MSU trustee, Perles has the opportunity to be close to his alma mater and to bask in the success the athletics department has had in recent years.

In the 2010 academic year alone, five Big Ten championships were earned by the department — football, baseball, women’s basketball, women’s cross country and women’s golf.

Even the men’s basketball team — which did not finish with a Big Ten championship — earned an NCAA Tournament bid to push their streak to 14-straight NCAA Tournaments, including six Final Four berths and a national championship in 2000.

Perles heaped praise on the administration and leadership capabilities of Athletics Director Mark Hollis and MSU President Lou Anna K. Simon. Of Hollis, Perles said events such as the Cold War hockey game at Spartan Stadium in 2001 and the highly-anticipated aircraft carrier men’s basketball game in November bring a lot of positive attention and ultimately revenue dollars to the university.

“(Hollis has) done a good job at reaching out and getting Michigan State opportunities to take advantage of some of these things,” Perles said. “In my opinion, it’s the best shape our athletics department has been since I can remember.”

Despite a budget that fluctuates from year to year, Lewandowski said the work and inventiveness of Hollis and the department brings attention to the sports programs at MSU, which in turn leads to increased merchandise sales and ticket purchases.

“He has the golden touch when it comes to doing things outside the box, but I think that’s what makes Mark who he is,” Lewandowski said. “So much of what Mark does is creating that unique experience that the student athlete can remember for the rest of their life … but also for those fans that can be a part of that.”