The Business of College Athletics
College sports are multimillion-dollar operations. How do athletic directors Mark Hollis of MSU and David Brandon of U-M take on the demands of their jobs, and what's next for them and their programs?
A century ago, when a university needed an athletic director it was routine to tap one of the school’s former coaches to fill the position. But in today’s world of collegiate athletics, the demands of running a multimillion-dollar enterprise requires a different kind of leader.
“The position of athletic director has changed a lot,” says Big Ten Conference Commissioner Jim Delany. “Over the last 25 years the importance of marketing has been accentuated, and the resources are bigger. Now it really helps to have someone with not only great leadership [abilities], but also marketing and business skills.”
Michigan State University Athletic Director Mark Hollis, who rose through the coaching ranks, made his mark executing high-profile events such as the 2001 “Cold War” hockey game at Spartan Stadium between MSU and the University of Michigan, which drew a then-world-record crowd of 74,554 fans. There was also the “Basket Bowl,” a 2003 game between MSU and the University of Kentucky at Ford Field in Detroit that set a world attendance record. And this past Veterans Day, Hollis helped stage the “Carrier Classic,” a basketball game on the flight deck of the USS Carl Vinson, for a nationally televised showdown between MSU and the University of North Carolina.
David Brandon was a highly innovative CEO who had transformed two Michigan companies — Valassis Communications Inc. in Livonia and Domino’s Pizza Inc. in Ann Arbor — before taking a significant pay cut to accept the athletic director position at U-M in March 2010. At the time, Brandon was determined to turn the program around and give back to the university that had provided his education, saved the lives of his twin boys, and successfully treated his cancer.
In his first 20 months on the job, Brandon handled NCAA violations over football practice standards, hired a new head football coach and chief marketing director, reorganized the athletic department, added men’s and women’s lacrosse programs, announced plans for multimillion-dollar improvements at Crisler and Yost arenas, installed permanent lights at Michigan Stadium, and embarked on novel marketing initiatives.
Recently, Hollis, 48, and Brandon, 58, discussed the challenges they face overseeing multifaceted organizations that are subject to intense regulatory, public, and media scruting.
How did you become a student basketball team manager for former MSU coach Jud Heathcote and what influence did he have on your career?
I was pursuing my communications degree knowing that I wanted to be involved, one day, in collegiate sports. I had planned to play football at Vanderbilt under a scholarship, but a back injury my senior year in high school ended that. I asked Jud several times if I could be a team manager. On the seventh request he handed me a broom and said, “OK, go sweep the floor.” In many ways, the experience of being the team manager was better preparation than a lot of coursework. Jud taught me to always be prepared for any situation, so there are no surprises. You’re thinking there are 20 things that could happen to a team when you’re traveling, so you have to anticipate and take the problem away before it has a negative impact. That’s probably the greatest thing I learned from Jud.
What was the first strategic move that you made when you were named AD?
Tom Izzo became the head basketball coach about the same time (1995), and I remember Indiana was playing us (in East Lansing) and the crowd (from Indiana) in the lower bowl was wearing all red. We said, “That has got to change.” There were only about 100 MSU students in a spirit section in the lower bowl, and we said if they were going to be noticed, we had to expand to 1,500 students. People said, “You can’t do that. Those are prime seats.” But we decided that if we were going to be successful, that’s what it was going to take. We changed the culture with the “Izzone.”
How crucial was it that you were able to keep Tom Izzo from going to the NBA?
I think it was more crucial for the state of Michigan than MSU. When we played in the Final Four (in 2009) at Ford Field, I think it created a huge sense of hope when the state needed it the most. I put Tom Izzo in there with Bo Schembechler as somebody the whole state embraces and values greatly. Our state needs these kinds of people. And for MSU, without a doubt, he’s the best coach in college basketball.
You really made your mark when you created the famous MSU versus U-M “Cold War” hockey game in 2001 at Spartan Stadium. How did that come about?
One of our former assistant coaches made a comment that we ought to play a hockey game at Spartan Stadium — and I am always listening. We started doing some research and found that there were no blueprints for this type of event, since it had never been done on that scale. A lot of people told me why it wouldn’t happen. We ended up using a refrigeration system out of Hollywood that chills the studios out there, and it created some really good ice. Our cost was around half a million dollars, so it was a high risk — but then (University) President (Peter) McPherson had a little glimmer in his eye, and he liked the idea of trying to do something unique. It was, of course, very successful, and you have seen it replicated by the NHL and others. We are very proud to have pioneered it.
You seem to have this innate entrepreneurial ability to come up with some very successful marketing strategies and big events. Where does this risky, “think big” creativity come from?
I grew up as an only child, and I don’t know exactly a lot of traits that go with that, but I always wanted to please people. I had to be creative and imaginative because I didn’t have a brother or sister to banter around with. I found ways to entertain myself, but when I was around people, I wanted to please [them] however I could. When I was at the Western Athletic Conference we had to be creative in marketing our teams to get into bowl games, and we had a big campaign with BYU to get Ty Detmer the Heisman Trophy. It’s really about focusing on the cause — How do you position? How do you best market? For the Cold War, we knew hockey thrived in this area and in Ontario, and we did it for the sport of hockey. We did the Basket Bowl game at Ford Field with Kentucky because of the importance of southeast Michigan. The Carrier Classic (was) a way of giving back to those protecting our nation and for their families left behind. We hope that this will be an endorsement by the NCAA, and that Veterans Day becomes a day of celebration.
How important is the success of the football and basketball programs for the university and the athletic department?
We are totally self-supporting, and those two sports generate 96 percent of the (total) revenue. When you take all the revenue and expenditures, basketball, football, and the two golf programs are the only profitable ones. Hockey is more of a break-even, and all the others lose money. It’s been shown that interest in a school goes up dramatically after a Final Four appearance and a Rose Bowl; therefore, your pool is then much higher. The national publicity helps with people talking about the school, and it has a positive effect on fundraising.
It was a real coup for you to get WJR (760 AM) to broadcast your games, especially since they had been broadcasting University of Michigan games for so long. How did that come about, and how significant a move was that for your program?
The first call I made on my first day at Michigan State in 1995 was to Mike Fezzey, who was the general manager at WJR, to find out what it would take to get on the station. I always stayed in touch with Mike and would see him when I was in Detroit. I grew up listening to the Tigers on WJR. I always loved the station. I think it was the only one I could pick up in Lexington (Michigan). The relationship has really helped with our momentum, and with the importance the institution has in southeast Michigan.
What are the biggest challenges you face as an athletic director?
I would say it is the number of constituents you have to work with — the president and board of trustees, student athletes, parents, the alumni, media, corporate sponsors, television entities, the NCAA, the Big Ten, faculty, deans. They’re all passionate, and they all have opinions on how your decisions should be made. So you have to listen and make the best decision, and know that once you make a decision you will have some detractors. You just have to hope that people will understand that you’re trying to make decisions that are in the best interest of your program and the school. The second most challenging aspect is the juggling of limited resources with the 25 sports, and how to divide the pie.
How do you think the position of an athletic director today compares to what it was like 30 years ago?
I believe it is much more complicated now. It used to be that the former football or basketball coach was often hired. Now it is much more business-driven. With the immediacy of communication, Twitter and Facebook have changed it a notch. Gender Equity Title IX has changed the way departments are run. You have people constantly watching for NCAA violations, coach’s salaries are escalating, there’s the arms race with facilities, and more media scrutiny.
What do you think of Dave Brandon and the work he is doing at Michigan?
I think Dave has done a great job. I respect the hell out of the guy. We both call on each other and help each other. It’s not artificial. Dave’s very much like I am. I make pizza box jokes all the time, and he makes basketball manager jokes all the time. (Football coach) Brady Hoke was a great hire for them, and I am a huge John Beilein (basketball coach) fan.
What did you learn from former U-M football coach Bo Schembechler that may have influenced you as a business leader?
I didn’t have the benefit of one of those great business educations because the degree I received was in education, but I tell people all the time that I went to the “Bo Schembechler School of Leadership.” I applied just about everything I watched him do in terms of how he recruited his staff and players, how he prepared, organized, communicated, and how he set goals. I took all of that and applied it to the world of business, and it worked awfully well for me.
Why did you decide to leave the private sector and all the success you had as the CEO of Domino’s to take the athletic director position in the midst of some very challenging issues?
I had always hoped and planned that at some stage in my career I would transition out of the world of chasing the next quarterly earnings target and making the next tranche of stock options worth a lot of money, and into something more like service so I could give back. I had considered politics at one point. I reflected on the way Coach Schembechler and the athletic department changed my life, and all I could think about was the opportunity I would have to do that for the hundreds of student athletes that are here and will be coming [into the program] in the next several years. The university gave me a world-class education, it saved the life of my kids (twin sons), it took care of my cancer, and it has had a profound impact on me. When (the university) came calling and said, “We have a lot of challenges in our athletic department and we want to be greater,” I looked at it as a great opportunity. It was never about whether it would pay me as much, or that I was giving up my company airplane.
How would you compare running an athletic department to running a major corporation?
There are more similarities than differences, but we are a nonprofit so there are no quarterly dividends, earnings targets, and stock options. In many respects it is like running a business — a $122 million business with 275 employees. But our business purpose is to provide a great opportunity for the athletes in the 29 sports that compete here. The leadership responsibilities for having a viable enterprise in terms of financial outcomes, having great marketing and event execution, great facility management, having great coaches, and winning championships is very similar to running a great company, and all of that feels very natural to me. But as a nonprofit we have far fewer resources, with thinner margins, and everybody here is a working foreman because we don’t have layers and layers of people with deep bench strength because, fundamentally, we can’t afford it.
How difficult of a transition has it been for you?
For me, it has been a real easy transition, and part of that is because I did serve as a (U-M) regent for eight years, and I was a student athlete here. I understand how this place works, and who the people are. (U-M President) Mary Sue Coleman is my boss, and I am one of the eight regents who elected her as president. The relationships and knowledge I have of the people and culture of this place and how things get done have been enormously valuable. If I had parachuted in here without that I still may have been successful, but it would have taken me a lot longer to figure it out.
Did the U-M athletic department have a business plan when you took over?
The department did not have a business plan. When I took over, the last time it had a serious strategic planning process was 13 years ago. I learned a long time ago that if you don’t know where you’re going, any road would take you there. We just completed the business plan process, and it’s all on one page right here on my wall. I like to keep the plan simple and memorable. If you need an MBA from the business school to understand it, then it doesn’t mean much. However, the plan wasn’t the first thing I did because for several months I had to assess the talent of my team, assess what was right and what was going wrong, determine our core competencies, and find out what we were really good at and what were our greatest needs and opportunities.
Why was it important for you to add men’s and women’s lacrosse as varsity sports?
Strategic pillar No. 1 in our business plan is “grow in every way.” And one of the ways you grow in college athletics is getting more student athletes, more sports, and more donors and supporters. Youth lacrosse is crazy positive in this country. High school football coaches are frustrated because they are losing some of their talent to lacrosse; women’s lacrosse has grown just as fast. You’re starting to see more lacrosse on television, and the sports channels are looking for more content. It has been 31 years since a BCS school added lacrosse, and that was Notre Dame. I thought, “Why not Michigan?” It allows us to open our doors to new donors and build our brand.
Is it true that you are considering expanding the “Big House” once again?
Again, it’s “grow in every way.” We are confident the football program is turning around and we have one of the most passionate fan bases you can imagine. We could have sold 175,000 tickets for our night game against Notre Dame (last September). I just need a waiting list of qualified folks who want season tickets. Today we still have the largest college football stadium, but there are three or four getting closer. If we were to close in the south end and add 5,000 to 6,000 fans, we would take our capacity close to 120,000. At some point in the future you could close in the north end and add another 5,000 to 6,000 fans, and ultimately have a capacity of 125,000.
What do you think of the job Mark Hollis has done at Michigan State?
Mark’s done a wonderful job there and I respect him a ton. He’s a great colleague and great to work with, but as he will tell you, we love beating one another. People don’t understand that the Big Ten Conference is like a team sport, and there are now 12 teams that need to work together for a common purpose and we have to make decisions that are good for the whole. Therefore, we continue to help each other.
What are you most proud of since you have taken the athletic director position at Michigan?
When I started on March 8, 2010, the focus was on two horrible football seasons, losing more games than we won, getting beat by Toledo, getting embarrassed by MSU and Ohio State, and the NCAA investigation, and everyone was politicking as to who should be the football coach. There was an enormous amount of negativity and divisiveness. I’m not taking credit for this, because there are a lot of factors involved, but where we sit today, the amount of positive energy that exists around Michigan athletics is incredible. We’re excited about our coaches, our teams, and the improvements at our facilities. We are very excited about the future and we feel we’re getting well-positioned for some great things. db