EAST LANSING – An MSU trustee’s effort to gain more oversight of the college’s private organization developed to boost funding for MSU athletics in the new name, image and likeness era failed to get enough support for a vote this week.
Michigan State University Trustee Mike Balow, R-Plymouth, shared his concerns, which he has raised previously, about a lack of oversight the Board of Trustees is being offered in relation to the creation of Spartan Ventures and its subsidiary, Spartan Media Ventures.
Trustees approved the creation of Spartan Ventures in October.
The board has publicly shared its support of the new development, which is the brainchild of MSU Athletic Director J Batt. However, some trustees – namely Balow, Rema Vassar, D-Detroit, and Dennis Denno, D-East Lansing – have expressed concerns about the lack of oversight and concerns about trustees being asked to sign nondisclosure (NDA) agreements.
Essentially, Spartan Ventures will allow MSU new avenues to raise money for athletics as it works to compete in an increasingly expensive college sports landscape.
In December, trustees in a narrow 5-3 vote approved MSU entering into a strategic brand management agreement with the new nonprofit, which is expected to officially launch by this summer. Balow, Vassar and Denno were also the no votes.
In March, the university announced that Jon Palumbo, MSU’s executive deputy athletics director, was appointed to serve as Spartan Ventures’ CEO.
Still, just two months before Spartan Venture’s projected July 1 launch date, trustees are concerned about oversight.
The same three, Balow said during the April 10 board meeting, were in support of adding a proposed resolution to the agenda to ensure the board would maintain adequate oversight to the new organizations.
The proposed resolution, which was provided to the Lansing State Journal, would make Spartan Ventures subject to records requests through the Freedom of Information Act and would not require any trustees to sign nondisclosure agreements to access documents related to the organization.
Currently, neither organization is subject to public records laws. Balow said the university has offered trustees the chance to see documents pertaining to Spartan Ventures, but only if they sign a nondisclosure agreement.
According to a document shared with the State Journal, each breach of an NDA – which could include disclosing information, copying, reproducing, recording or retaining confidential information – would carry a $250,000 fine, “which the Parties agree represents a reasonable estimate of the damages likely to be incurred and is not a penalty.”
Balow told the State Journal that members of the board discussed the resolution for around a half an hour on April 9. In emails shared with the State Journal, board secretary Stefan Fletcher confirmed the item would be added to the agenda shortly after 7 a.m. Friday. At 8:42 a.m., Fletcher emailed Balow letting him know the remining five trustees – Rebecca Bahar-Cook, D-East Lansing, Brianna Scott, D-Muskegon, Renee Knake Jefferson, D-East Lansing, Sandy Pierce, D-Northville and Kelly Tebay, D-Ann Arbor – asked to have the item removed.
According to the board’s bylaws, an item can be added to the agenda if it receives support from three or more trustees. Once an item is included on the agenda, it can only be removed at the request of five or more trustees.
“Spartan Ventures and Spartan Media Ventures … is a huge, innovative, watershed change, a forever change to our athletic department,” Balow said during the board meeting. “We have a very good athletic director, J Batt, who we are lucky to have, who thinks outside the box and is going to take us forward … but we have to do it in the right way.
“Athletics in America and in college has gotten to be a monster. It is professionalized in every way, shape or form as we all know, the big sports,” he said. “But we mustn’t forget that athletics are a part of a university, part of a much larger whole. They are not standalone professional teams, they are subject to the oversight of the elected Board of Trustees in this case, and we have to focus on transparency.”
Scott, who is the current chair of the board, said trustees typically hold a meeting to set the agenda around a week before each regular board of trustee meeting, so the last-minute scramble appears unusual.
Balow said he intends to try to get support to put the item on the agenda during the June meeting.
Balow said the board has a working relationship where each individual does not have to agree on everything, but that they can have respectful discourse and disagreements. He said he doesn’t mind if the item goes to a vote and fails, but he does want to have a vote on record regarding transparency surrounding Spartan Ventures.
“If a significant minority of trustees want something to be considered and voted on, we should have the ability to do that – and if it doesn’t pass, it doesn’t pass,” he said.
When it comes to oversight concerns, Balow said his concern as an elected official with oversight of one of the state’s largest universities is about being able to ask questions, get answers and get documents to ensure policies are being followed.
“When we created Spartan Ventures, the administration I think took the football and ran with it and took liberties with what they’re really allowed to do,” Balow told the State Journal.
He noted that he doesn’t have concerns about Batt or the donations from Greg and Dawn Williams, which included a $100 million investment into Spartan Media Ventures when they gave $401 million to the university in December. Rather, he is concerned about making sure things were being done the right way.
One ongoing concern, he said, was when the trustees were first told about the creation of Spartan Ventures, he was under the impression trustees would separately vote on the creation of Spartan Media Ventures.
A partial document shared with the State Journal showed part of a Spartan Ventures timeline, including a bullet point written in red ink that reads “PROPOSED: BOT consent of Spartan Media Ventures (SMV)(Mid November)”.
“Proper oversight is simple,” he said. “The board can conduct inquiries for documents at meetings and can never be told ‘Well, you’re not authorized to have that information.’ It’s as simple as that, and it’s up to the board to be a check and a balance.”
He added that the university has a robust conflict of interest policy, yet seems to have little interest in making sure there is adequate oversight of Spartan Ventures.
He said the university’s legal counsel, which represents the board, has access to the documents, but did not provide them when he asked for them. After he repeatedly asked, the counsel told Balow he could only see the documents if he signed an NDA.
Balow said he will not sign an NDA and that he feels information is being withheld from him.
“We were elected to be the oversight,” Balow said during the meeting about the role of trustees. “We cannot give away that responsibility.”
Contact Karly Graham at kgraham@lsj.com. Follow her on X at @KarlyGrahamJrn.
This article originally appeared on Lansing State Journal: Trustee says MSU ‘took liberties’ it shouldn’t have in forming Spartan Ventures
Reporting by Karly Graham, Lansing State Journal / Lansing State Journal
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