UM still beats MSU in merchandise sales

Lauren Abdel-Razzaq; and Kim Kozlowski
The Detroit News

As Michigan State and the University of Michigan prepare to meet Saturday, the East Lansing school is on a tear and is the heavy favorite to win. But no matter the outcome of the game, the University of Michigan remains a winner in one area in particular: merchandise sales.

In spite of a 3-4 season, and questions over whether athletic director Dave Brandon and coach Brady Hoke will remain with the team next season, sales of Michigan merchandise don't appear to be affected.

At the same time, the Spartans are seeing elevated sales numbers coming off a Rose Bowl win last year and heading into this weekend's game with a 6-1 record.

"At that level, it's usually having a great season that makes a difference," said Darren Rovell, a sports business reporter with ESPN. "Having a horrible season doesn't usually make a difference."

Michigan is an established brand with graduates and fans across the country, and is regularly in the Top 10 for merchandise sales. Michigan State has had decades of a successful basketball program.

"For me, it's more generational — it was passed down in my family," said Burton resident and Wolverines fan Jami Randall, who was shopping for a mug at The Great Divide in Flint. The shop is split down the middle between Michigan and Michigan State items. "My dad went to UM. My family, they'd disown me if I liked State."

And while the Spartans have been having success recently, a good or bad record doesn't change the pride — or the desire to deck out in green and white. At least that's what Victor Tripplett of Flint says. He's been a fan since his daughters went to the school, and he's already donned Spartan logo party beads ahead of this weekend's match-up.

"We'll probably blow them out," Tripplett said of the game. "I'm pretty excited."

Universities make money off royalties from licensing their brand. Those licensing deals tend to be long term and aren't usually affected by short term success or failure, said Matt Powell, a sports retail analyst with Princeton Retail Analysis.

According to the Collegiate Licensing Co., which represents the University of Michigan brand and dozens of others, the school is the third highest selling brand in college sports this year, after the University of Texas at Austin and the University of Alabama.

Last year, UM had the fourth most successful sales, up from fifth in 2011 and 2012.

A call to Kristen Ablauf, director of trademark licensing at U-M, was not returned.

Making money

At Michigan State, royalties have increased 21 percent over the past three fiscal years to $3.6 million, according to spokesman Jason Cody. That includes royalties from 552 licensees.

"The more successful your athletic program is, the more successful the brand is and the more licensees come forward and may want to license your product," he said.

The normal royalty rate for Michigan State is 10 percent, but the school got an additional 7 percent of sales from Rose Bowl merchandise last year, adding to the bottom line, Cody said.

"Anecdotally, the amount of Spartans apparel compared to Wolverines apparel is as close of a match-up as it's ever been," said Rovell.

In the bigger picture, athletic success is only one component of university financial success, said Cody.

"We often view athletics here as a front door to the university," he said. "When our athletics program is doing well on a national scale, it builds pride in our alums and encourages them to donate to the university."

That's one of the reasons that more than 300 volunteers from around the country will gather this weekend in East Lansing to help the university launch its first major fundraiser since 2002.

Pride in giving

The public launch of the $1.5 billion capital campaign coincides with the game against Michigan. It also helps that the Spartans are 3-0 in the Big Ten Conference and 6-1 overall.

Athletics are a way of gathering loyal supporters of a university, and engaging them in the university's academic and athletic programs. MSU officials expect donors to support the university's campaign, but the economic impact of a university's athletics program are not clear-cut.

"Clearly, when we are winning, people feel better and that's helpful from a standpoint of building relationships with people who want to spend more time on campus," said Bob Groves, MSU's vice president of university advancement. "It's the correlation between winning bowl games and Final Four games that we see a direct (financial) benefit to the athletic programs. But we don't see as much direct impact to academic program (giving)."

Jerry May, UM's vice president for development, said that linking donor giving to sports or other parts of the university community is futile.

"It is impossible to correlate donor giving to any single aspect of the university," May said. "Donors are generous to the University of Michigan because they have a deep and broad affection for the university — (and) that relationship extends over many years."

With the launch of the university's Victors for Michigan campaign — which seeks to raise an unprecedented $4 billion — last year more than 127,000 donors gave over $950 million in cash gifts, pledges and bequest intentions. May said that's 54 percent more than the previous best year ever for donations.

What it comes down to is school pride and rivalry, and that's something that doesn't necessarily change with a single football season, said Brian Crawford, manager of The Great Divide.

"The records don't really matter at this time of year," he said. "This is the battle of the state."

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