The analysis below was sent to President Fritz Erickson, Vice President of Finance and Administration Gavin Leach, and Athletic Director Forrest Karr last week, and an earlier draft was given to them over three weeks ago. There has been no response indicating that any of my numbers, analyses, or assertions are incorrect. I shared this with departmental representatives on faculty council last Thursday, so some of you may already have seen this.

My job as President of NMU-AAUP is to represent the faculty. Faculty are frustrated and upset with the lack of attention and funding for the core academic mission of the university. We see decisions that we feel will have significantly damaging long-term effects on the university. The following come from NMU’s report to NCAA and NMU’s publicly released budget numbers and this documentation can be provided.

According to NMU’s report to NCAA, last year’s athletic budget was about $9.3 million dollars. They raised about $1 million, so 89% of that ($8.3 million) came from institutional support. This year, we cut $250k from athletics, but added $438k to start two new teams. Plus, we spent $400k on a scoreboard. So this year, NMU will spend about $8.9 million on athletics. There are about 6800 full-time equivalent students at NMU. Therefore, we are spending over $1300 per full-time student to support athletics (I really doubt whether students know this or would be happy about it). There are 506 NCAA and US Olympic Training Site athletes at NMU. Therefore, we are spending over $17,500 per athlete to support athletics, on top of what it costs for their education, room and board. In contrast, the budget for academic affairs last year was about $57 million and that was cut $2 million this year. This is used to educate about 6800 students, so we are spending less than $8100/student on education.

President Erickson says that this year we will spend $3.4 million on athletics (that is only the base budgeted portion), but Athletic Director Forrest Karr’s numbers (from last year) suggest $7.8 million in institutional support and our report to NCAA indicates $8.9 million in institutional support this year. I do not understand why there are such huge discrepancies in reported costs of athletics, nor have I been able to find out. President Erickson claims that this expenditure generates $6.1 million in revenue. That is a profit of $2.8 million if you use President Erickson’s number for cost, but a loss of $1.7 million if you use Forrest Karr’s numbers and a loss of $2.8 million if you use the numbers reported to NCAA. Furthermore, I cannot understand where we get $6.1 million in revenue. The cost for institutional support already subtracts all money generated by the athletic department from the total cost of NCAA athletics.

How much revenue comes from athletics? Student athletes receive an average of 30.3% of tuition, room, board, books, etc in athletic scholarships. Plus, they are eligible for all of the other NMU scholarships that any other student gets. The average non-athlete gets $2,063 in NMU financial aid and the average athlete gets $1,976 ($2,024 for NCAA athletes, excluding OTS athletes). The average athletic scholarship is $7,495 ($8,314 for NCAA athletes alone) for a total of $9,471 per athlete ($10,338 for NCAA athletes). The Athletic Department estimates for total cost of attendance (tuition, fees, room, board, books) seems to be about $27,666 for out-of-state students (OS) and $22,170 for in-state students (IS). There is some variation, but I cannot figure out why. So subtracting the average scholarship means that athletes are paying about $18,195 OS and $12,699 IS to attend NMU. However, $9838 of that is for room and board, and only half of NCAA athletes live on campus, so we need to subtract $4919 from the income resulting in $13,276 OS and $7,780 IS. If half of student athletes are IS and half OS, the average is $10,528. So there is about $5.3 million in total. Now the important part is that this money goes to pay for all of the things that every other student’s money goes for; books, room and board, facilities and faculty, administration, and staff salaries. It is absurd to think that all of those things are simply provided to student athletes for free, while all of their money goes straight to supporting athletics.

Even if we simply look at the two new teams that were started this year (women’s golf and men’s swimming/diving), they seem to cost more than they generate. These two teams were budgeted $438,000. Fritz has claimed in public several times that this generates $1.2 million in revenue, but has never explained where that number comes from. There are 35 students on the two newest team’s rosters posted on the athletics website. At $10,528 total revenue/student, that generates $368,480, which must pay for their room and board, education, university overhead, and the $438,000 in direct costs (does not include non-base budgeted costs) to run their teams. This is nowhere near President Erickson’s claim of $1.2 million in revenue, nor is it anywhere near enough to cover the costs. My guess is that we are chasing headcount at all costs (probably because of performance criteria articulated by the Board of Trustees), even if those costs are greater than the benefits.

Gavin Leach (Vice President for Finance and Administration) told the Board of Trustees that the new scoreboard would pay for itself in 3-5 years. If we grab the middle time span, that means the scoreboard must generate $100,000 per year in NEW advertising income. Last year, the athletic program reported to NCAA that it raised a total of about $41k in “royalties, licensing, advertisement and sponsorships” revenue. I will be very interested to see whether next year’s NCAA report shows $141k in this category. We were told at Academic Senate that there is a philanthropist who is likely to donate the full $400,000. I sincerely hope that this happens and that this piece of equipment generates new revenue for the university.

Academic Affairs has been told to cut 3.4% from the budget ($2 million). President Erickson has said that we cut athletics by 7%. My guess is that the figure is derived by only counting base-budgeted athletics ($3.4 million last year) and $250k in budget cuts. This ignores the $438k allotted to starting two of four new sports teams and the $400k for a hockey scoreboard. Institutional support for athletics was $8.3 million last year and $8.9 million this year (according to NMU’s report to NCAA and the information that I can gather) for a 7.2% increase. This happens while full-time equivalent faculty have fallen 13.6% and full-time equivalent students have fallen 12.9% in the past three years. Already large classes are being combined or simply cancelled. We are losing our ability to provide the personal attention that students come to NMU to receive.

Even if it is true that 506 students came here solely because of athletics (which I doubt), the other 6576 NMU students came here for academics. Investment in athletics may generate revenue (although not nearly as much as they cost, in my analysis). Investment in academics generates revenue as well. In fact, that is where the vast majority of our revenue comes from and we are having budget problems largely because that revenue is falling. How do we attract more students? I contend that we do that by running quality academic programs. We are constantly told that enrollment is falling because of demographics and our remote location. Michigan Technological University faces the same issues, yet their undergraduate enrollment increased 1.9% this year and their freshman class is up 8.1%. We are told that is because they have selective admissions and simply need to admit a larger proportion of applicants as applications fall. However, their applications are up 4.0% while ours are down 10.6%. Furthermore, that explanation would require them to lower admissions criteria, but their average freshman ACT scores increased from 23.6 last year to 25.6 this year. We have been told that MTU’s enrollment is up because they are a “niche school” (i.e., engineering). However, only half of their increase in enrollment is in engineering; the other half is in sciences and the arts. This has happened because MTU invested in academics and student scholarship, not because of their sports teams.

We are spending large amounts of money to attract a few students who play sports. At the same time, we are significantly cutting academic budgets and are losing large numbers of students who choose their university for an education. Our enrollment and applications are falling much faster than the number of Michigan high school graduates; we are losing the competition for students. Similarly, some of our best faculty are leaving. They have told me that they do not feel that trying to build a career at NMU is a safe bet. There are large discrepancies between the rationale for support of expenditures on athletics, the numbers that we are given, and apparent reality. With very few exceptions, universities have athletics to build community, diversity, and identity, not to make money. And that is common knowledge. It might be instructive to do the same sort of analysis of administrative expenditures and their impact on the financial health and educational quality of NMU. A valid argument can be made that we are not making good decisions about effective strategies for moving NMU to where we want to be.

Budget crises have hit NMU hard over the past few years; have the various divisions of the university felt this pressure at a level proportional to their relative institutional size? Head-count is a popular metric used by this administration to describe enrollment; have the head-counts of the various groups of employees across campus divisions been equally impacted by the changing budgets?

This latter question is an interesting one which highlights one of the primary problems with such a metric. Should a student who takes a single 4-credit course be counted as equivalent to a student taking a full load of 16 credits? Similarly, should an employee who worked one month of the year be counted as equivalent to one who worked all 12 months of the year? The answer to both of these questions should obviously be no if the intention is to accurately describe a given population. The past and ongoing impacts on various employee units across campus divisions remains an important consideration as new budget cuts are proposed or enacted, however it is clear that a more useful metric than head-count is required. More often than not, faculty complete full academic years of employment, such that a comparison of fall faculty numbers from year to year gives a reliable representation of the changes and trends, however the same is not true for other employee units on campus, who more commonly have personnel turnover throughout the year.

A review of data provided by Human Resources, which was previously used in the recent investigation which ultimately led to the $262 health care refunds to NMU-AAUP members for over-payments made in the 2015 calendar year, reveals a useful and different metric for comparing the campus personnel trends: months of health plan coverage. Although not all employees on campus enjoy the benefits of the health plan, including the contingent faculty among our own membership, those who do are carefully tracked by HR in order to ensure that benefits are only received for actual periods of employment. Thus a full-time employee who worked an entire year received 12 months of health plan coverage; a new full-time faculty member who began teaching in the fall semester would receive 5 months of health plan coverage (Aug-Dec) for that same year. By examining the total number of months of health plan coverage for each employee group on campus, we begin to see revealing trends regarding personnel on campus. As expected given the shrinking enrollment and correspondingly shrinking budgets, most employee units on campus are shrinking. However, such is not the case for everyone. The following table contains the total number of months of health care coverage for the various employee units for calendar years 2014 and 2015, along with the respective percent change for each group. For reference, the classification of Non-Reps is defined by HR as including Executives, Senior Management, Deans, Department Heads, Senior Administrators, and Coaches.