(April 1, 2010) YpsiNews.com has learned that lawyers from Michigan State University are in Ypsilanti this week to finalize the agreement to purchase Eastern Michigan University for $24 million. While all eyes are focused on Indianapolis and the MSU Spartans return to the NCAA Men’s Basketball Final Four, lawyers from the high powered Lansing law firm of Hykema, Lostit met with corporate counsel at EMU to discuss terms of the takeover.
Ypsilantians across the city were stunned upon learning the news.
“It seems as if something like this happens every year to Ypsilanti”, said long time Ypsilanti resident and business owner Karen Maurer. “I am not sure Ypslanti can take much more of this.”
Sources tell YpsiNews the takeover should be completed by August 2010, just in time for new student orientation.
So why is MSU buying EMU? YpsiNews takes you inside and explains what no one else wants to explain about the deal.
The Doyle Letter
The roots of this merger goes back to September 3, 2003 when then EMU Vice-president for Finance Patrick Doyle wrote a letter to EMU Regent Jan Brandon. The three page Doyle Letter, as it was to be called, was always rumored to explain the finances surrounding the controversial Presidential Palace.
Ann Arbor News sued EMU in a Freedom of Information Act case asking for a copy of the Doyle Letter. The Ann Arbor News, not too surprisingly, lost the case when the Appeals Court and Michigan Supreme Court ruled in favor of EMU.
The problem was the Ann Arbor News was too specific in their FOIA request when they asked to see the Doyle Letter.
In December 2009, just two days before Christmas, YpsiNews submitted a new FOIA request to EMU this time asking for all letters in 2003 where the authors last name begins with the letter ‘D’.
It worked, YpsiNews.com got the Doyle letter and a letter about a leaking toilet in Pray Harold.
What was inside the Doyle Letter shocked even the normally unflappable YpsiNews Investigative Team.
While the Doyle letter did indeed disclose that the presidential palace had run far over budget, the shock was that the memo outlined how EMU could hide the cost overrun through an acquisition by EMU of another University.
Doyle’s plan was ultimately rejected by the Regents as unworkable because they couldn’t figure out how to buy another University and not make it look like they were covering up the costs surrounding the presidents house.
Regent Brandon, who has close ties with MSU, let it slip in 2008 to Michigan State Athletic Director Mark Hollis that it was possible for a state run university to buy another state run university.
Hollis began quitely lobbying MSU Regents and alumnus for the Athletic Department to buy a University and specifically EMU. Hollis believed EMU was the right choice as it was close to Lansing and it was likely to piss off the most Wolverine fans being that EMU was just 7 miles to the East of Ann Arbor.
Little did Hollis know how quickly MSU alumnus were willing to fork out the green. MSU raised the nearly $35 million they thought it would take to buy EMU in just 6 days. Hollis has not said what they plan to do with the remaining $11 left over after the deal with EMU closes.
State Legislature Not Happy
“You can’t just buy a University” exclaimed State Representative and perennial gubernatorial candidate Alma Wheeler Smith (D-54). “There are rules, this has to go before a committee and be approved by the legislature. We have to have hearings and town hall meetings!”
Gubernatorial candidate and current Attorney General Mike Cox (R) not surprisingly, disagrees with Smith.
Cox said in an AG opinion released on Thursday, April 1, 2010 that the public university is a creature of the State Constitution. Cox went on to say the transfer, ownership, or management of a State University is not subject to the approval of the state legislators nor the voters. The only requirement would be approval by both the Boards of Regents of EMU and MSU. The Board of Regents are independent bodies, they can do as they please with no accountability to the governor, state legislature, or the voters.
Cox, a Michigan Wolverine, seemed nonplussed that he just wrote an opinion that says that Board of Regents at Public Universities don’t have to listen to the governor
“Who cares”, said Cox. “The Board of Regents at Public Universities in Michigan have never been accountable to anyone, this opinion doesn’t change anything.”
When this reporter reminded Cox that he was running for governor, Cox tilted his head to the side and said, “Oh.”
Wolverines not happy
At first, outgoing University of Michigan Athletic Director Bill Martin also seemed nonplussed about the MSU-EMU merger.
“Who cares”, said Martin repeating an oft heard phrase from U-M alumni. “We kick EMU’s ass every year, nothing will change.”
Apparently Martin, like most of the rest of the nation, can’t fathom why MSU would want to buy EMU.
“It’s the Economics, Stupid”
So why would the MSU Athletic Department buy another University and why EMU? It is all about the scholarships.
Since MSU is acquiring an already establish NCAA Division I-A school, MSU will be able to maintain two football and two basketball programs. In a quirk of the NCAA rules, since MSU and EMU will be goverened by a single Board of Regents, student athletes can transfer from EMU to MSU without losing a year of eligibility. This is huge, says MSU’s Hollis.
With this purchase MSU has in effect created their own farm team system for all college sports. This will change college athletics forever and catapult MSU Sports to the top echelon of college sports.
For $24 million, MSU has been able to double the number of available scholarships. For football, MSU can increase their scholarships from 85 to 170 in a single year. The doubling of available scholarships will apply to all sports at MSU
When it was explained to U-M’s Bill Martin why MSU was buying EMU, Martin responded “No comment.”
Former CEO of Dominos Pizza David Brandon is the new incoming Athletic Director of Michigan to replace Martin and yes EMU Regent Jan Brandon is married to David.
Will other schools look to buy other smaller universities?
Already Norte Dame is in talks to acquire Sun Belt Conference school Old Dominion and Penn State is looking to acquire Lehigh University.
EMU’s Legacy and Advance Ypsilanti Future
The merger makes sense for some at EMU. EMU can once and for all put behind them the mess over the name change from the Hurons to the Eagles.
“Except for Athenians”, said EMU History Professor Mark Higbee, “everyone likes the Spartans. They are the bad guys that ultimately get killed but still became heroes. Besides, the EMU football team won’t have to change the colors of their uniforms, so it saves the University money. That is a good thing.”
Ypsilanti Mayor Pauli Schwaibler, whose campaign slogan in 2006 was “I am going to march on Lansing to demand our fair share of taxes.” was relieved when he learned that Lansing was in town this week.
Not quite understanding it was Michigan State University in Lansing that was coming to Ypsilanti, Schwaibler saved some shoe leather and walked over to the Sidetrack where the attorneys had taken a break for lunch.
Schwaibler asked if they would like to purchase Water Street for $22 million.
The lawyers politely declined, saying that they only had enough bags of cash for one money pit and for $2 million more, EMU seemed like a better deal.
Reporter Steve Pierce is a former TV weatherman and made his first Final Four appearance with CBS in 1984 while living in Albuquerque. In his spare time he reads other peoples email using Wireless Ypsi.