Between Big Ten and rise of men's basketball team, University of Maryland athletics sees less red

Maryland men's basketball average attendance up more than 7,500 through first 6 games.

In recent seasons, the University of Maryland athletic program has seen all too much red.

There were the vast patches of empty red seats inside Xfinity Center early last season even though the men's basketball team went on to win 28 games and make the NCAA tournament for the first time since 2010.

More significantly, there was millions of dollars in red ink in recent years and mounting debt — the results of capital expenses and the school paying $31 million to settle an exit fee dispute with the Atlantic Coast Conference, which it left in 2014 for the Big Ten.

But it appears to have turned a corner, eking out a modest operating surplus in the fiscal year ended June 30. In its second season in the lucrative Big Ten Conference, the university also is receiving needed money plus hope — and skyrocketing attendance — from the men's basketball team, which has lost just once after starting the season ranked No. 3 in the nation. (It's now No. 6.)

Five of the men's basketball team's six games at Xfinity Center have sold out, and attendance is averaging 17,838. That's an increase of 75 percent over last season's 10,175 during the same period.

This season has produced home sellouts of 17,950 against local rival Georgetown and also against less-heralded nonconference opponents Mount St. Mary's, Rider, Saint Francis (Pa.) and University of Maryland Eastern Shore.

Last season didn't see a sellout until a Jan. 17 game against Michigan State — after the Big Ten Conference schedule had started. This year's Big Ten season begins Dec. 30 against Penn State.

Merchandise sales also are up significantly.

Royalty revenue from university-branded goods was up 44 percent in the last quarter compared to the same period a year earlier, according to the school, which declined to share specific sales data. School officials credit excitement over the basketball team's potential, increased visibility provided to teams by the Big Ten Network, and an Under Armour-aided rebranding in which team uniforms reflect the state flag.

It's too soon to tell how much of a financial impact the men's basketball team's success could ultimately have on the cash-depleted athletic program.

Barry Gossett, a regent and top donor, said there is a direct link between teams' performance and the athletic department's ability to pay down its debt.

"You can make the connection," Gossett said. "Obviously, the more fan interest you have and the more exposure the team gets is a win-win situation."

The Big Ten Network was a principal selling point for Maryland leaving the ACC, its partner of 61 years, to join the richer conference. The ACC does not have its own TV network.

"The [basketball] team gets exposure through the Big Ten Network" as well as other outlets, Gossett said. "We have alumni throughout the country able to enjoy the games — and also volleyball, soccer and other games."

The annual operating revenue for Maryland's men's and women's teams was about $55.7 million last year, according to statistics compiled by the U.S. Department of Education.

Maryland athletics ended the 2015 fiscal year with a surplus of $391,953 and paid off $5 million of its accumulated debt to the university, according to school officials.

The athletics program had incurred millions of dollars of debt due to several years of operating losses, the settlement to leave the ACC and spending nearly $51 million to modernize the football stadium.

University President Wallace Loh said in 2014 that shared Big Ten revenues would mean roughly an additional $10 million a year for the school than if it remained in the ACC. He said the attractive Big Ten schedule in football and men's and women's basketball "will help generate additional revenues including ticket sales and licensing agreements."

Those revenues kicked in last year, but Maryland would not divulge how much it is receiving each year from the Big Ten because it said it is bound by a nondisclosure agreement.

Being in the Big Ten "has gone tremendously well from the revenue side," said regent and former state Sen. Francis X. Kelly.

But there was a risk that Maryland could damage its brand if it did not win enough games in its powerful new conference.

"One of the things that was really important to us was to be competitive immediately," said Kelly Mehrtens, deputy athletics director and chief operating officer. "I would say we've succeeded in the sense we tied Michigan for the most number of championships — seven — in the first year."

Among the regular-season champions last year was Maryland women's basketball team. The men's team finished second.

But the Terps football team, which went 3-9 this season and won a single conference game, remains a concern. Maryland dismissed its coach, Randy Edsall, during the season and hired a new coach, DJ Durkin.

The football team plays in newly renamed Maryland Stadium, which is far smaller than those of conference rivals such as Michigan and Ohio State, which also have much larger athletic budgets.

"There's no question the competition is tough, but in a lot of places the competition is tough," said former Terrapin Club president Larry Grabenstein, who served on a search committee for a new coach in 2010.

Maryland coaches have long hoped the school would build an indoor football practice facility to help entice recruits and to use in bad weather.

That is happening now.

While there is a "gap" between Maryland and other conference schools in football facilities, Grabenstein said, "everyone who has seen all the plans for the new facilities feels it will be as good as anything in the country."

Maryland has been collecting money — mostly from private donations — to turn Cole Field House, the former basketball arena, into a $155 million football and academic center. Under Armour founder and CEO Kevin Plank — a Maryland alumnus — pledged $25 million for the plan.

Under Armour also has helped Maryland with a rebranding effort to try to forge stronger connections with fans.

The rebranding began in 2011 when Under Armour and school officials "agreed that we needed to do something that really associated that school with the state," said Adam Clement, the company's senior creative director for team sports.

The idea was to showcase the state flag design in uniforms. Since the uniforms' debut, Clement and others say the connection has become more deeply ingrained in the popular imagination.

"Had it been the New York State flag, which is blue with a seal, it wouldn't have worked," Clement said. "But the Maryland flag is specific. In a sense, the visibility of what Maryland wears has created an industry of Maryland flag-inspired items."

Mehrtens said improving "image and branding" had long been priorities.

The exposure of the Maryland men's basketball team is a boon for Under Armour as well as for the university.

"It's great for us," Clement said. "There is a certain connection. Our brand is founded and headquartered in the state of Maryland. The fact that they've come to this point so quickly is truly exciting."

jeff.barker@baltsun.com

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