Butler's 'high aspirations' carry big-time risks

March 20, 2013
Back to TopCommentsE-mailPrintBookmark and Share

From afar, Butler University’s decision to leapfrog from bigger conference to bigger conference looks like a no-brainer.

Abandoning the Horizon League last year for the Atlantic 10, and now after one year jumping to the newly formed Big East, certainly has major upside.

Officials for Butler, Creighton and Xavier announced today they will join Georgetown, St. John’s, Villanova, Seton Hall, Providence, Marquette and DePaul to form a new league for next season.

The excitement on Butler’s campus should be tempered with caution.

President James Danko told me for a story in this week’s IBJ, “The move to the A10 was not a money-maker.”

Like the move to the A10, the risks in this most recent jump are considerable and the costs—at least initially—will most certainly outweigh any financial gains.

Whether this makes sense in the long term depends on how the schools of this new conference share athletic revenue, how big a broadcast deal the league can broker, and how much Butler will have to spend to keep up with relative hoops powerhouses such as Georgetown and Marquette.

Chief among the advantages of joining the new league is exposure in key markets, especially those on the East Coast. The exposure helps Butler attract a more diverse—and potentially richer—student body.

A student body from wealthier parts of the country eventually turns into a wealthier alumni base, and that can have a big impact on fundraising. But that lift could take years to realize.

The plan to pump up the men’s basketball team and use it as a key marketing tool was hatched in 1989 by then-President Geoffrey Bannister. That plan has been carried on by Bobby Fong and Danko.

And who can argue with the results? Butler’s student body has more than doubled, to 4,200, since 1990 and admissions have jumped about 50 percent since 2010, after the first of the school’s two Final Four runs.

Fundraising for the athletic department has jumped, too, from $635,000 in 2008 to $1.45 million last year and a projected $1.5 million this year. That doesn’t include $13.3 million in donations collected since June 2010 for Hinkle Fieldhouse renovations.

That kind of fundraising would have seemed preposterous a decade ago.

But the costs of jumping to a new conference loom large, and Butler supporters have to wonder where the money will come from.

First, there’s a $2 million exit fee owed to the A10. But that’s small potatoes compared to the ongoing expenses of running with this new crowd.

Last week, Danko told me the school’s athletic department operates at a deficit. That means money must be pulled from elsewhere to feed sports.

Of course, Butler is not alone. The vast majority of NCAA Division I schools operate their athletic department at a loss.

But that doesn’t make it an easy issue for Danko. Given the school’s small size and Indianapolis’ penchant for fiscal conservatism, the expense of such a move is a pressing one for Butler’s president. That’s why he said he has been involved in conference realignment talks “every step of the way.”

Butler has seen the salary of its basketball coach triple in the last five years. Brad Stevens’ $1 million salary is nearly 10 times what Barry Collier earned when he started coaching the team in 1989.

Stevens was by far the highest-paid coach in the Horizon League. Now, he makes only a fraction of what other coaches in this high-octane league earn, and that will test his allegiance. He makes about one-third as much as Marquette’s Buzz Williams. Williams signed an extension last year that will pay him $2.82 million annually through 2018.

Schools like St. John’s, Georgetown and Villanova also pay their coaches big bucks. If the Stevens-led Bulldogs can compete with those schools, the market will dictate his pay be commensurate.

Just look at the Big Ten. The schools at the top of the conference have the highest-paid coaches. That’s not coincidental. And that’s not just because the best teams hire the best coaches. Of course, that’s partly the case. But with each passing year, big-time college basketball is becoming more of a pay-for-performance system where winning coaches demand higher salaries.

Increased travel expenses also concern Danko. In the Horizon League, Butler could charter a bus to many away games. And if Butler weren’t so concerned about its athletes being in the classroom, I suppose they could still use buses.

But Danko explained that the school decided this year to have the team travel primarily by air so the players would miss less classroom time.

Butler will spend $800,000 more for travel this year than it did last year in the Horizon League, Danko said. Since it’s doubtful airline fees are going down, that’s an expense that could pile up quickly.

Butler is in the midst of a $16 million renovation campaign for Hinkle Fieldhouse. But if the university is going to keep up with facilities of its new brethren, the Bulldogs will have to put more money into Hinkle and other training facilities. A charming campus and storied venue get you only so far these days.

And since Butler has a considerably smaller student body—and alumni base—from which to draw financially than the likes of DePaul, Marquette, St. John’s, Georgetown and Villanova, keeping up won’t be easy. That could put a heavier burden on the entire school to support the juiced-up athletic department.

When I asked Danko about jumping to a bigger, better conference last week, he replied, “We have to take advantage of the opportunities that help us become the school we want to be. We have high aspirations.”

With high aspirations come big risks. Really big risks.

  • No brainer
    The reference in some publications to this decision being a "no brainer" made me think it a perfect match for Butler AD Collier, whose reputation comes not from skill, but from one piece of good fortune - hiring Brad Stevens
  • Good Article
    Anthony....I appreciate the point of view this article comes with. I always wondered about the move to the A-10 and the travel cost, Rick Majerus was quoted last season as saying the travel cost and distance associated with the A-10 made the league even more difficult. DePaul and Xavier are close but no one else really, so the travel cost is still there, although with the number of teams at 10, the scheduling may mitigate that some, you can do an east coast swing and get 2 teams before going home...rumor had it that Dayton and Notre Dame might be in this league as well earlier on when the rumors were flying, and that would have helped the travel cost, but apparently that is not happening now...other than that, eveyone is on the East Coast. Most of the talk about this conference move being a "no brainer" had to do with the lucrative TV contract that Fox was supposedly throwing at the C7league...your article makes no mention of that, so I wonder, given the trepidation of Danko, if that contract is really that much $$. By the way, Barry Collier did a fine job as the Butler coach...he resurrected the program...it was nothing before he took it over. And though he did not have enough success to keep the job at Nebraska, he had several above .500 seasons (ask Danny Nee, Tim Miles or Doc Sadler how tough it is to win at that school), while graduating almost every player who went there. He has done a lot more right that hire Brad Stevens, and he would be the first person to tell you that hiring Brad was the smartest move he has made. Barry Collier is a good guy, he was a great coach, and a lot of really good coaches like Stevens, Matta, Lickliter, Groce, learned from him either as a coach or AD. There are a lot of people in on this "no brainer", not just Collier.
  • More Small-minded Thinkinh
    I appreciate the attempted counterpoint by the author, but it is really just more of the same small-minded attitude that is sadly so native to Indiana. The risk is limited and the upside is huge. If Butler listened to detractors, they would be struggling with 1,600 students right now. This was truly a no brainer. Danko didn't have any trepidation. In fact, no sooner than the old Big East had broken up and he announced that Butler was open to considering new dance partners. Danko is a smart businessman -- a university President with an MBA -- he knows what he is doing.

Post a comment to this blog

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
  1. By Mr. Lee's own admission, he basically ran pro-bono ads on the billboard. Paying advertisers didn't want ads on a controversial, ugly billboard that turned off customers. At least one of Mr. Lee's free advertisers dropped out early because they found that Mr. Lee's advertising was having negative impact. So Mr. Lee is disingenous to say the city now owes him for lost revenue. Mr. Lee quickly realized his monstrosity had a dim future and is trying to get the city to bail him out. And that's why the billboard came down so quickly.

  2. Merchants Square is back. The small strip center to the south of 116th is 100% leased, McAlister’s is doing well in the outlot building. The former O’Charleys is leased but is going through permitting with the State and the town of Carmel. Mac Grill is closing all of their Indy locations (not just Merchants) and this will allow for a new restaurant concept to backfill both of their locations. As for the north side of 116th a new dinner movie theater and brewery is under construction to fill most of the vacancy left by Hobby Lobby and Old Navy.

  3. Yes it does have an ethics commission which enforce the law which prohibits 12 specific items. google it

  4. Thanks for reading and replying. If you want to see the differentiation for research, speaking and consulting, check out the spreadsheet I linked to at the bottom of the post; it is broken out exactly that way. I can only include so much detail in a blog post before it becomes something other than a blog post.

  5. 1. There is no allegation of corruption, Marty, to imply otherwise if false. 2. Is the "State Rule" a law? I suspect not. 3. Is Mr. Woodruff obligated via an employment agreement (contractual obligation) to not work with the engineering firm? 4. In many states a right to earn a living will trump non-competes and other contractual obligations, does Mr. Woodruff's personal right to earn a living trump any contractual obligations that might or might not be out there. 5. Lawyers in state government routinely go work for law firms they were formally working with in their regulatory actions. You can see a steady stream to firms like B&D from state government. It would be interesting for IBJ to do a review of current lawyers and find out how their past decisions affected the law firms clients. Since there is a buffer between regulated company and the regulator working for a law firm technically is not in violation of ethics but you have to wonder if decisions were made in favor of certain firms and quid pro quo jobs resulted. Start with the DOI in this review. Very interesting.