The University of Montana Athletics Department gets an estimated $8.6 million a year in subsidies, according to an analysis by an economist and Missoula legislator.
Without those dollars, the Athletics Department would run a deficit of some $8.5 million annually, contrary to public perception that university athletics pay for themselves or return plus revenue, said state Sen. Dick Barrett.
"It's commonly perceived to be, I think, supportive of the budget of the university, or at least neutral," said Barrett, a Democrat and retired UM professor.
Across the Montana University System, the subsidies for athletics amounted to $27.8 million in 2013 based on items considered subsidies by the NCAA, according to an earlier analysis Barrett posted on his legislative blog. It represented 56 percent of the total revenue for sports across the system, "a drain on university system financial resources."
Last week, Barrett said UM is in no way alone in receiving subsidies among schools nationwide. In fact, the UM Athletics Department supports itself more than any other school in the Big Sky Conference, according to another analysis (see chart).
Barrett said he did not want to weigh in on whether the spending is justified.
However, at a time UM is facing intense budget pressure and a possible $12 million shortfall in its fiscal year 2017 budget, he believes it should be clear to the community that those resources would otherwise be available for other purposes.
"If we're going to use money in this particular way, we ought to at least be aware of it. It shouldn't be hidden. It should be explicit and recognized," said Barrett, who blogs at barrettforsd47.blogspot.com.
At the same time, the money is a drop in the bucket compared to the subsidies other athletics programs receive, according to an analysis by the Chronicle of Higher Education and the Huffington Post using data from 2010 through 2014.
The review puts UM dead last in subsidies among Big Sky Conference schools, at 40 percent. By comparison, Montana State University in Bozeman gets 56 percent and Northern Arizona State rakes in the highest amount at 79 percent.
The context is paramount to the discussion, according to athletics director Kent Haslam, who sees the spending as an investment.
"We are clearly, clearly the leader among our peers, in the Big Sky Conference especially, in generating our own revenue," Haslam said. "We are subsidized at a percent far less than anyone that we compete against.
"And I think that's important to understand because ... our ticket sale revenue rivals schools that are competing at a much larger level with much larger fan bases."
In other words, he said, the commitment of Griz Nation rivals the support of fans at larger schools.
At UM, the $8.6 million a year comes from $6.3 million in state support, $1.5 million in student fees and facilities depreciation worth $763,000.
The depreciation amount does not represent actual dollars, and a change in NCAA reporting requirements means the figure won't be represented in athletics budgets in the future, according to the department. It's a net zero now, with the same amount listed in the expense column.
The UM campus is in the midst of planning to make up at least $10 million in its 2017 budget, with 201 positions slated to be cut. Although Barrett believes the athletics subsidies should be discussed, he said it would be folly to view them as a solution to the immediate problem.
On the other hand, he said vocal critics of UM President Royce Engstrom point to expenditures such as administrative salaries and receptions as examples of "fat" in the budget. A recent petition denouncing proposed reductions on campus named "expensive junkets" as an area to cut, but not athletics money.
At a time UM's core functions are facing a lack of funding, and even discontinuance, the dollars going to athletics should be part of a conversation about the university's long-term fiscal priorities, Barrett said.
"What's important and what isn't? What's core to the university's mission and what isn't?" Barrett said. "The only point I'm trying to make here is that in making those decisions, this money should be considered to be on the table."
Currently, administrators have not broached any discussion to move state support from athletics to academics, according to Provost Perry Brown. However, Brown said the athletics program isn't insulated from the budget negotiations underway.
"They are taking reductions, too," Brown said.
He said the details are still unfolding.
ASUM President Cody Meixner said many students have expressed discontent with the money going to athletics, but he does not believe changing the student fee or redirecting it is on the docket for current senators given their other priorities. However, in some cases, students mistakenly believe public money is going to athletics construction when private donors are paying, he said.
According to Haslam, the money is an investment that offers rich returns, both to the university itself and to the wider community.
Some $2.8 million of the money goes toward scholarships for athletes, but it doesn't cover all the tuition for all the athletes. UM Athletics awards a maximum of 178 scholarships, but it enrolls 320 student-athletes.
"The others are paying their own way to be here. So there's an investment, and there's a return right back to the university," Haslam said.
He pegged the return to be at least $5.5 million. The amount doesn't include other things those students pay for, such as summer school or meal plans, he said.
UM is in the process of phasing out some scholarship funds, but Haslam could not be reached Friday to discuss whether athletics waivers would be affected. Earlier in the week, he said he did not yet have details on how his department would manage cuts, but he also said scholarships are critical in recruitment.
In tough economic times, he said, athletics is fortunate in that it can work to generate more revenue through ticket sales and sponsorships.
Along with the cash return on investment, the public receives intangible benefits from state support, Haslam said.
"A full stadium on a Saturday afternoon brings millions and millions of dollars to this community. A robust athletics program helps us maintain a large stadium that allows a Paul McCartney or a Rolling Stones to make Missoula a destination to have a concert," he said.
In some ways, he said, the entire state benefits when the Grizzlies put Missoula on the map.
"I don't know the value of having a football game on ESPN televised nationwide and people watching it and associating Montana with the brand of the university," Haslam said.
"I think that it's important to understand the whole story of what we're able to do through the generosity of our fans and also through the brand that's been built of Grizzly Athletics."
According to Barrett, the return on investment must benefit the entire community that's contributing the dollars, or the whole state.
Fans coming down from Kalispell to spend money in Missoula on game day are pushing economic activity around the state, but they are not creating it, he said.
"We need to make sure we're talking about benefits that accrue not just to people who go to games, but to the larger community. It's the larger community that's putting this money out, so it's benefits to the larger community that justify it," Barrett said.
Across the nation, an "arms race" is taking place in athletics funding. Schools are spending more and more money on buildings and facilities and salaries to try to promote competitive programs and recruit athletes.
Barrett wondered if UM could opt out of the race: "Would it be possible, instead of settling into this arms race, to ratchet the whole thing down?"
For example, could all the schools in the Big Sky Conference agree they wouldn't offer athletics scholarships? Students who wanted to play football would try out for the team, as they did in high school, and the school would host games.
Barrett's own alma mater, Swarthmore College in Pennsylvania, had that model. He wonders if it's possible to create an athletics program that fosters the same kind of spirit and identity without spending as much money.
"It's a long shot, but it's the flip side of what I think is being widely observed in the country, not here specifically, but in the country as a whole, as a sort of uncontrolled growth in athletics spending," he said.
Haslam agreed the arms race is a challenge for athletics programs in general, but he said at UM, donors help give the Grizzlies the competitive edge.
"As other universities become more and more in tune to the value of improving athletics, if you're not careful, you can start chasing things that don't bring a return for the investment," Haslam said.
At UM, he said, private money is responsible for some of the newer amenities, such as the recently opened academic center for student-athletes and soon-to-open Washington-Grizzly Champions Center, a 46,000-square-foot facility adjacent to the stadium.
Students on campus are investors in athletics, and they receive a benefit in more access to tickets, he said. However, Haslam also said other schools rely more heavily on student support than UM does.
The program at UM is popular, he said, but the vast majority of its student-athletes are not planning to be professional athletes: "They're going to be pro-something else."
"Our student-athletes always outpace the general student body in graduation rates, GPA, credit hours completed and retention," Haslam said. "We're lifting the overall performance of the university, not dragging it down."