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Basketball's Big Bucks
By William Wilcoxen
June 21, 1999
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A pending investigation into academic-fraud allegations and attorney meetings about the coach's future have cast a cloud of uncertainty over the University of Minnesota men's basketball program. The stakes in the basketball scandal involve the university's academic integrity and a substantial amount of money. The Gopher basketball team generated more than $6.5 million in profits for 1997-98; much more than any other Big Ten team.

THE MEN'S BASKETBALL TEAM has become the most important profit maker for U of M athletics in recent years. As football profits have sunk to the lowest in the Big Ten, basketball has risen to the top of the conference. Courtside seats at Williams Arena are now auctioned with bids starting at $2,500. A donor-seating program requires contributions to purchase preferred seats. And the luxury box concept came to the old barn a couple of years ago with installation of "barn lofts."

In 1997-98, the lack of an empty seat combined with money from television, radio, concessions, parking, and Gopher-adorned clothing produced more than $8.4 million , three-fourths of it profit. But those profits are quickly consumed in an athletic department where most sports operate in the red. Men's Athletic Director Mark Dienhart says of the 11 sports, only three - basketball, football, and hockey - generate much money, yet the department as a whole is self-sufficient and then some.

Dienhart: The university's model is that we will not dip into state funds to support our men's athletics program. We won't dip into university dollars to fund the men's athletics program; that it will be financially self-supporting and at least here, we will also spin off dollars to help support women's athletics and spin off dollars to handle debt service.
Dienhart says next year, the men's athletic department will need to bring in $28 million to meet its own expenses, help subsidize women's sports, and make payments on recent construction projects including those at Williams and Mariucci Arenas. The men's basketball team's contribution to that total is hard to predict given the pending investigation, which carries direct, indirect, and potential costs. Dienhart estimates the bill for the law firms conducting the investigation will be in the range of 500 to 700 thousand dollars. A buyout of coach Clem Haskins' contract could cost more than $1.1 million.

If the investigation uncovers wrongdoing, the university will likely self-impose sanctions, such as a temporary reduction in the number of basketball scholarships. The NCAA and Big Ten conference would have the option of imposing further punishment. The Big Ten distributes television income and proceeds from the national basketball tournament equally among its member schools. In an extreme case, the conference could exclude Minnesota from that revenue sharing. But some of the Gophers' money sources seem unlikely to be affected by the investigation. Dienhart says there's a long waiting list for basketball season tickets.
Dienhart: We haven't noticed any lack of interest in our season-ticket holders in basketball renewing. Many of them, I think , realize that however serious the penalties we might face are, we'll fix the problems and we'll move forward.
Similarly, the corporate sponsors who advertise in the arena and on game broadcasts show no signs of abandoning the basketball team. Pat Forceia is the university's assistant director of external relations.
Forceia: Over the course of the last four weeks, we've had the opportunity to meet with literally every corporate entity that's been part of Gopher basketball and they've made it clear they'll be back for the 1999-2000 season.
There are more nebulous costs associated with the basketball scandal, including its effect on the university's reputation. Forceia says the current priority is on helping investigators get the information they need, but he agrees that once the dust settles the team's image will need some repair.
Forceia: When our athletic teams are winning, Gopher sports fans across the state seem to have an extra bounce in their step. When our teams lose, our fans are always there to help share that pain with us. But when we disappoint, as our basketball has right now, a gulf opens up. And we've clearly let people down and we need to begin the process of trying to regain people's respect and that's something that won't happen overnight. It'll happen over the course of time.
Even if Gopher backers are quick to forgive any transgressions, the controversy may embolden critics who object to the university's multi-million dollar investments in the college-sports business. Murray Sperber, an American-studies professor at Indiana University is the author of "Onward to Victory: The Crisis That Shaped College Sports." Sperber says athletic scandals can ripple through other branches of a university in the form of diminished contributions.
Sperber: Sometimes alumni will pull back when there are scandals and be very angry at the university for embarrassing them and embarrassing their degrees. The other more-hidden thing is a lot of money for higher education comes from corporations and comes from foundations and such and they're very leery of sports scandals. They don't want the bad publicity, they don't want the bad association. They'll often pull back, so scandals hurt you terrifically.
At the U of M, President Mark Yudof says the basketball program's current situation is unfortunate, but he thinks the ultimate test for Minnesota lies in how the university handles it.
Yudof: We need to do the investigation, get to the bottom of it, discipline the people. When that's done, go back in and take a look and say "where did our systems break down and can we make these systems better?"
Yudof says in his mind, the revenue associated with the basketball program is not a factor in the investigation. But he says at many universities, the reliance on a few revenue-producing sports to sponsor entire athletic departments may add to the pressure on basketball programs to produce winning teams. He says nationally, college basketball teams have lower graduation rates than other sports and basketball produces a disproportionate share of rule violations.

Mark Dienhart says if Minnesota's athletic department revenue does suffer, the pain could be spread around the department, or the university could eliminate a sport - something it has never had to do. Minnesota has added women's soccer and ice hockey in recent years and plans to start a women's rowing team, which brings the university into compliance with a federal requirement that men's and women's sports receive comparable funding. Yudof says he won't let the prospect of losing a sport influence the U of M's response to the pending investigation.
Yudof: I don't think that should stop you from going where the evidence takes you. We'll clean house and do what needs to be done, then hope to field a competitive team in circumstances where there's no questions about the academic integrity.
Forceia says he's confident that if there is a decline in revenue from men's basketball, increased income from football and hockey will make up the difference and keep the athletic department's bottom line stable.