Money management

Athletic Department raises spending concerns

In the age of Internet technology, the University Athletic Department had the opportunity to become an Internet service provider in addition to having its own Web browser. After having spent $300,000 to explore this idea, the University Athletic Department abruptly decided not to pursue the project any further, instead choosing to heavily redesign its Website, mgoblue.com. The Athletic Department, being financially independent of the University, needs to be cautious in its ventures to ensure that money is well spent.

For about $2 million, the University could have formed a partnership with UniverseONE - a company that specializes in online development. Subscribers to this service would have received Internet access, in addition to the live coverage of sporting events and other perks currently available in the Website's premium content area, called the M-Zone. Moreover, instead of using Netscape Navigator or Microsoft Internet Explorer, fans would have used a new, University-themed browser. Such a move apparently would have allowed the Athletic Department to generate additional revenue.

The reasons as to why negotiations broke off between the two sides remain unclear. But it is known that the Athletic Department spent more than $300,000 in investigating this partnership - a high price to pay for no results.

The University has launched a probe into this affair. According to Robert Kasdin, the committee's chair and the University's chief financial officer, "We need to ensure that our athletic department is financially sound over the long term." This probe should benefit all involved as long as the University keeps its focus on making sure that the Athletic Department does its job managing money. The probe should not be a spearhead for the University to gain a measure of control over the Athletic Department. Connecting the department - and its funding - too closely with the rest of the University could have undesirable effects, including tuition raises.

That the Athletic Department is looking for new sources of additional revenue bodes well for student athletes and fans. Increased financing can benefit athletes in both club sports and varsity programs. With greater funding, more club sports could receive varsity status - as illustrated with the recent addition of men's soccer and women's water polo as varsity sports. Also, the department could use the money to improve existing facilities and upgrade equipment.

But the department must use caution in its ventures. It is part of a public university, not a corporation. No imprudent spending should occur, and the department should not enter into any venture that damages the integrity and tradition of Michigan athletics.

New sources of finance for the Athletic Department would be beneficial for University sports as long as the sources of income are sound. Although details of this specific instance remain unclear, the Athletic Department needs to ensure that in the future the money it spends will benefit the University.

04-09-99