Category Archives: ACC

Should the ACC and Big East Create Their Own Bowl Game?

With the current BCS contract set to expire at the end of the 2013 season, the landscape of college football is set to change in the coming months.  In the last few weeks, the SEC and Big 12 announced that they will be creating their own bowl game, in which each conference’s champion will play, beginning in 2014.  While it is unclear what this new bowl game means to the Fiesta Bowl (in which the Big 12 champion currently plays) and the Sugar Bowl (in which the SEC champion currently plays), it is possible that both of those bowls could continue to exist after 2014.  Additionally, the bowl would likely be joining the Rose Bowl (played by the Big Ten and Pac-12 champions) and the Orange Bowl (played by the ACC champion). 

Furthermore, it is expected that in coming months, BCS commissioners will vote to approve a four-team playoff system as a modification to the current BCS system.  This four-team playoff will pit the number-one and number-four seeds and the number-two and the number-three seeds in two playoff games before contending for the National Championship game.

Given that beginning in 2014, the SEC and Big 12 champions will meet in a bowl game as will the Pac-12 and Big champions, while four teams compete for the opportunity to play in the National Championship game, should the Big East and ACC join forces to create their own bowl game?

There are two real reasons for the ACC and Big East to adopt their own bowl game:  1.  To ensure that their teams have a national stage to play a bowl game on and 2.  To earn revenue.

In considering whether creating a new bowl game is necessary for the ACC and Big East to ensure that their teams play a bowl game on a national stage, one factor to consider is the likelihood of either team’s conference playing in the four-team playoff.  A brief overview of the teams ranked number-one through number-four since the founding of the BCS in 1998 provides some guidance as to the likelihood of ACC or Big East teams competing in the four-team playoff set to begin in 2014.

Year #1 #2 #3 #4
1998-99 Tennessee FSU  Kansas State Ohio State
1999-00 FSU VA Tech Nebraska Alabama
2000-01 Oklahoma FSU  Miami Washington
2001-02 Miami Nebraska Colorado Oregon
2002-03 Miami Ohio State Georgia USC
2003-04 Oklahoma LSU USC Michigan
2004-05 USC Oklahoma Auburn Texas
2005-06 USC Texas Penn State Ohio State
2006-07 Ohio State Florida Michigan LSU
2007-08 Ohio State LSU VA Tech Oklahoma
2008-09 Oklahoma Florida Texas Alabama
2009-10 Alabama Texas Cincinnati TCU
2010-11 Auburn Oregon TCU Stanford
2011-12 LSU Alabama Oklahoma State Stanford

The only current Big East member to have been ranked in the top-four in the college football regular season standings since the founding of the BCS is Cincinnati.  Granted, Miami and Virginia Tech were both ranked in the top-four several times during their Big East tenure, however, those teams both play in the ACC now.  Thus, when looking at the entirety of teams ranked in the top-four during the BCS’ history, it would appear that the Big East needs a partnership with the ACC, much more than the ACC needs a partnership with the Big East.

However, the fact of the matter remains, that in the last three years, Cincinnati was the only school out of either conference to be ranked in the top-four at the end of the college football regular season.  Thus, by creating their own bowl game, the conferences would ensure that their respective champions would be on a national stage during a bowl game after 2014.

Thus, the next question to address, is can the ACC and Big East draw a positive amount of revenue from a bowl game?  This question, unfortunately, is not as easy to answer.  The ACC and Big East in recent years have been known more so for the talented basketball teams they field than their football prowess.  That is not to say, that each team does not have football teams which fans would travel to watch.  However, could the conferences find enough fans to travel to a bowl game to ensure its profitability?

Perhaps UConn’s appearance in the Fiesta Bowl in Tempe, AZ is an indicator as to if, and how far, fans are willing to travel for bowl games in which their teams appear.  UConn was required to sell 17,500 tickets for the event.  Six days before the bowl game, it had only sold 4,600.  Reports indicated that the school would incur the cost of the unsold tickets.  Would Big East fans be more inclined to travel to bowls closer to home?  If so, could such an endeavor be a revenue generator for the Big East and ACC?

While the ACC and Big East could benefit from joining forces to create a new bowl game, they should only do so if it is held at a location in close proximity to the bulk of each conference’s largest fan base.  Additionally, the conferences should only enter into a bowl agreement after surveys are completed determining each conference’s fan base’s commitment to paying for and attending the bowl game.  If the interest is not strong and definite, then each conference would be better off attempting to compete for one of four-team playoff seeds.

Why FSU Isn’t Leaving the ACC for the Big 12

Last week, the ACC and ESPN reached an agreement which extended the network’s television contract with the conference for 15 years.  News of the agreement caused many to speculate that FSU would leave the ACC for the Big 12, under the assumption that the amount of money the school would earn under the ACC’s extended media contract was not sufficient and that FSU would be able to earn more under the Big 12’s yet-to-be-negotiated media contract.

However, in a memorandum released today, FSU president Eric Barron all but squashed any rumors of FSU leaving the ACC for the Big 12.

In the memorandum, Barron provided four reasons why alumni believe FSU should consider joining the Big 12:  the Big 12 is more football-oriented than the ACC, the Big 12 would give FSU greater football competition, the ACC provides advantages to North Carolina schools, and FSU would earn more media revenue under the Big 12’s media contract.

In response, Barron nearly doubled the reasons why FSU should not join the Big 12, providing seven explanations.  These explanations included his notations that the ACC is an equal share media revenue conference while the Big 12 is not, any additional money FSU would receive under a more lucrative Big 12 media rights deal would in turn be spent by FSU on further travel to play Big 12 schools, ticket revenue would decline as Big 12 fans would be less inclined to travel to FSU games, the sellout FSU-Miami rivalry would be lost, FSU would have to pay $20-$25 million to leave the ACC and the Big 12 is an “academically weaker” conference.

While many FSU fans may be disappointed in Barron’s response, his reaction is perhaps the most level-headed of any made during the past 18 months in which conference realignment has changed the collegiate athletics landscape.  Barron’s response provided analysis of three of the key factors driving conference realignment:  media contract revenues, travel and academics.  However, it appears that for once, the lure of media contract revenues did not outweigh the costs posed by travel and academics resulting from conference realignment.

Over the past 18 months, fans of college athletics have watched as teams have realigned themselves with conferences in far away lands, under the auspices of joining the ranks of more prestigious academic institutions, better competition, and ultimately, earning higher revenues.  However, in his memorandum, Barron indirectly called out many of these institutions on their bluff:  How can you promote academics and earn more revenue, when you are requiring your student-athletes to travel further distances and expending more money to meet a growing travel budget?

In recent months, I have been given great access into top Division-I athletic department’s budgets.  Across the board, the highest expense any athletic department incurs is for travel.  Athletic departments that compete in localized geographic areas already shell out millions of dollars per year to pay for travel.  Imagine how much the amount spent on travel will increase when schools join conferences with geographic reaches across the nation?  Will it double?  Triple?  Will the possibility of earning $2 million more per year under a media rights agreement balance the additional travel costs incurred by the athletic department, while also negating the time lost to study by student-athletes required to travel further distances for competition?  Only time will tell.

Today, many may be chastising Barron for his memorandum and apparent disinterest in moving FSU to the Big 12.  However, ten years from now, it will be interesting to see what FSU has gained (and likewise, what it may have lost) by remaining in the ACC.

Georgia Tech’s Recruiting Expenses

Previously, BusinessofCollegeSports.com showed you which schools spent the most on recruiting per data obtained from the Department of Education.  In reporting this data, BusinessofCollegeSports.com noted that imperfections exist within the data, but that the Department of Education data was the only publicly available source listing recruiting expenses for public and private institutions.

After that report was published, BusinessofCollegeSports.com followed up with several schools in an effort to obtain more accurate records of their recruiting expenses.  Georgia Tech Athletics’ Chief Financial Officer, Frank Hardymon, graciously detailed Georgia Tech’s recruiting expenses for BusinessofCollegeSports.com

Per data obtained from the Department of Education, Georgia Tech’s recruiting expenses were the 7th highest of all BCS schools in 2010-11.  In that year, Georgia Tech had total recruiting expenditures of $1,489,599.00, spending $1,173,904.00 on recruiting for its men’s sports and $315,695.00 on its women’s sports.  Georgia Tech’s total recruiting expenditures put it only behind those of Tennessee, Auburn, Notre Dame, Alabama, Georgia and Florida, when comparing data submitted to the Department of Education.

Hardymon was able to provide logical explanations as to why Georgia Tech’s recruiting expenses appeared higher than most other BCS schools.  In simplest terms, every school reports things differently.  Hardymon explained, “Everybody reports things differently.  Every school has different ways of doing accounting, so they show expenses under different categories.” 

Additionally, Hardymon explained that the items the Department of Education asks to be reported are not the same as what is required to be reported to the NCAA.  Thus, it is possible that a school’s revenues and expenses may appear to be different on each report.  “You can end up with two completely different bottom lines, which can lead people to question the quality of your accounting if you have two different totals,” said Hardymon. 

Furthermore, according to Hardymon, the Department of Education does not want athletics departments to report losses.  Thus, while the Department of Education report depicts many athletics departments having zero net income in 2010-11, it is possible that many of these athletics departments actually suffered a loss in 2010-11.  “Their theory is, if you had a loss, you’re still an operating entity, so somebody must have covered it for you.  They have us report the loss as if the school floated us the difference,” said Hardymon.  For athletics departments like Georgia Tech, which are a separate corporation from their university counterpart, this presents an issue, as the athletics department is solely responsible for any losses it incurs.

Hardymon noted that Georgia Tech is “very inclusive on recruiting” in terms of what the athletics department shows as a recruiting expense on its reports to the Department of Education and NCAA.  Part of Georgia Tech’s ability to inclusively report its recruiting expenses, is the result of the accounting system Georgia Tech uses.  Hardymon explained, “We are able to code a lot of things as recruiting.  So anything—even if it isn’t an immediate recruiting expense, but is going to turn into one, like buying envelopes, stationary and postage to be sent to recruits—is going to be listed as a recruiting expense.”   

Georgia Tech’s inclusiveness in reporting its recruiting expenses is likely what made its expenses the seventh-highest of all BCS schools in the Department of Education report.  While the Department of Education report only reports recruiting expenses as lump sum numbers, Hardymon provided BusinessofCollegeSports.com with an inside look of what some of the $1,489,599.00 spent by Georgia Tech on recruiting went toward.

First, the football program undertook an initiative to update the materials it distributes externally.  “Football makes a pretty strong commitment to communicate in writing with potential recruits,” said Hardymon.  According to Hardymon, “this initiative created $300,000.00 in expenses for the Athletic Association, which were categorized in football recruiting.”  It is important to note that the entire $300,000.00 was expensed towards recruiting in 2010-11, although some of the materials will be used for years beyond 2010-11.  Hardymon asserted that when “office-type expenses,” like the football program mailers were removed from Georgia Tech’s recruiting expenses, Georgia Tech’s recruiting expense total fell below $1 million.  Hardymon believes that this number is a more accurate representation of Georgia Tech’s recruiting expenses when compared to those of other programs.

The bulk of Georgia Tech’s recruiting expenses went towards travel costs.  In 2010-11, Georgia Tech spent $1,007,897.00 total on airfare, meals, hotels, entertainment, transportation, and development for on and off-campus recruiting.  The big-ticket item in Georgia Tech’s travel expenses for recruiting, though, is airfare expenses incurred by both basketball programs and the football program.  Hardymon said that while Georgia Tech does use a charter airline company, the company is relatively inexpensive and that the coaches also largely use commercial airlines to travel.  

 The numbers provided by Hardymon related to Georgia Tech’s recruiting expenses, along with his explanations as to why different athletics department’s expenses may seem vastly different, provided great insight into the budgetary concerns of a top athletics department.

Highest Net Income Amongst Athletics Departments

To conclude this week’s series, BusinessofCollegeSports.com will list in order the athletics departments earning the highest net income  in 2010-11.

Issue has been raised by some over the classification of revenue minus expenses in this series as “profit,” since athletics departments are nonprofit organizations.  It should be noted, that in the disclosures to the Department of Education, the athletics departments do not report either profit or net income.  Rather, they report their revenues and expenses.  For this series, profit/net income was calculated by subtracting the total expenses reported from the total revenues reported.

As noted above, the data was obtained from the Department of Education and is for 2010-11.  The data from the Department of Education is by no means perfect.  Throughout this series, net income was calculated by subtracting the “grand total expenses” from the “grand total revenues” that the athletic department reported to the Department of Education.  Expenses in this instance included:  head and assistant coach salaries, athletically related student aid, recruiting expenses, operating (game-day expenses) and “not allocated” expenses.  The expenses faced by athletic departments, however, may be greater than those reported in this snapshot provided by the Department of Education.  For example, an athletic department may have capital expenses outside of those expenses included in the report.  This all being said, this data is the only data publicly available for both public and private institutions.  Thus, it at least provides some insight into athletic department revenues, expenses, and net income before taking into consideration additional expenses, like capital projects.

In 2010-11, 48 athletics departments in BCS AQ conferences generated a positive net income.

School Athletic Department Net Income
Conference
Alabama $31,684,872.00 SEC
Penn State $31,619,687.00 Big Ten
Michigan $26,649,499.00 Big Ten
Texas $24,317,815.00 Big 12
Kansas State $23,395,408.00 Big 12
Notre Dame $19,147,710.00 Big East
Ohio State $18,630,964.00 Big Ten
Oregon $16,433,642.00 Pac-12
Oklahoma State $14,365,376.00 Big 12
Michigan State $13,512,269.00 Big Ten
Arkansas $11,285,623.00 SEC
LSU $10,401,982.00 SEC
Florida $10,056,601.00 SEC
Georgia $9,575,569.00 SEC
Oregon State $954,682.00 Pac-12
Oklahoma $8,064,477.00 Big 12
Purdue $6,773,110.00 Big Ten
Mississippi State $6,306,583.00 SEC
Virginia $6,038,664.00 ACC
Vanderbilt $5,767,543.00 SEC
Iowa $5,296,068.00 Big Ten
Indiana $5,293,816.00 Big Ten
Nebraska $5,170,608.00 Big Ten
Virginia Tech $4,314,760.00 ACC
Louisville $3,952,601.00 Big East
Auburn $3,484,657.00 SEC
Texas A&M $3,224,429.00 Big 12
Texas Tech $3,124,246.00 Big 12
Kentucky $3,122,674.00 SEC
Miami $2,763,826.00 ACC
Washington $2,330,501.00 Pac-12
Illinois $1,815,596.00 Big Ten
Colorado $1,763,633.00 Pac-12
Arizona $1,524,374.00 Pac-12
Utah $1,147,160.00 Pac-12
South Carolina $762,726.00 SEC
Syracuse $717,817.00 Big East
North Carolina $660,231.00 ACC
Wisconsin $655,421.00 Big Ten
Duke $567,207.00 ACC
Maryland $263,711.00 ACC
Clemson $216,318.00 ACC
North Carolina State $192,151.00 ACC
California $181,167.00 Pac-12
Missouri $143,588.00 Big 12
Iowa State $121,686.00 Big 12
Connecticut $94,522.00 Big East
Tennessee $14,447.00 SEC

In previous posts from this series, you’ll remember that every Big Ten athletics department ranked in the top-50 for revenues and expenses.  However, neither Minnesota nor Northwestern achieved a net income above zero.

The conference with the highest percentage of members having a positive net income was the SEC.  All but one SEC member (Ole Miss) generated a positive net income in 2010-11.  The SEC was also home to the athletics department with the highest net income of any BCS AQ school, Alabama.  However, the ten schools generating the greatest net income in 2010-11 are from a mix of conferences.  The only conference not represented in the top-10 is the ACC.

Conference # of Athletics Departments % of Conference
ACC 8 50%
Big 12 8 80%
Big East 4 25%
Big Ten 10 83.33%
Pac-12 7 58.33%
SEC 11 91.60%

Top-50 Largest Athletics Department Spenders

This week, BusinessofCollegeSports.com showed you the revenues, expenses and net income of athletics departments in the BCS AQ conferences.  To conclude this series, BusinessofCollegeSports.com is ranking the top-50 athletics departments with the highest revenues, expenses and net income.  In this installment, we will show you which athletics departments spend the most.

The data was obtained from the Department of Education and is from 2010-11.  While this data is not perfect, it is the only data publicly available for both public and private institutions.

School Athletic Department Expenses Conference
Texas $125,978,117.00 Big 12
Ohio State $113,184,855.00 Big Ten
Florida $112,951,656.00 SEC
Tennessee $102,480,757.00 SEC
Auburn $100,497,784.00 SEC
Oklahoma $96,274,366.00 Big 12
LSU $96,019,689.00 SEC
Michigan $95,836,991.00 Big Ten
Wisconsin $92,939,345.00 Big Ten
Alabama $92,225,560.00 SEC
Iowa $87,607,487.00 Big Ten
Florida State $86,946,503.00 ACC
Penn State $84,498,339.00 Big Ten
Louisville $83,783,719.00 Big East
South Carolina $82,941,941.00 SEC
Georgia $82,765,498.00 SEC
Kentucky $81,755,641.00 SEC
Stanford $81,125,476.00 Pac-12
Arkansas $80,482,490.00 SEC
Minnesota $78,924,683.00 Big Ten
Nebraska $78,509,148.00 Big Ten
USC $75,707,273.00 Pac-12
Notre Dame $75,360,209.00 Big East
Virginia $72,400,342.00 ACC
Texas A&M $71,719,872.00 Big 12
North Carolina $70,709,553.00 ACC
Kansas $70,028,683.00 Big 12
Washington $69,306,426.00 Pac-12
Oregon $67,900,835.00 Pac-12
Michigan State $67,450,913.00 Big Ten
Duke $67,418,981.00 ACC
UCLA $66,003,893.00 Pac-12
Indiana $64,878,825.00 Big Ten
California $64,825,171.00 Pac-12
Boston College $64,078,272.00 ACC
Connecticut $62,948,800.00 Big East
Clemson $60,958,659.00 ACC
Baylor $59,859,235.00 Big 12
Purdue $59,293,193.00 Big Ten
Missouri $58,862,366.00 Big 12
WVU $58,003,719.00 Big East
Miami $57,561,177.00 ACC
Maryland $57,501,307.00 ACC
Virginia Tech $56,762,362.00 ACC
Arizona $56,750,057.00 Pac-12
Northwestern $56,214,293.00 Big Ten
Pittsburgh $56,044,309.00 Big East
Oklahoma State $55,757,830.00 Big 12
Illinois $55,723,771.00 Big Ten
Arizona State $55,378,783.00 Pac-12

While 80 percent of the Big 12’s members ranked in the top-50 in terms of revenue generated, only 70 percent ranked in the top-50 for expenditures.  Thus, it is expected that at least several Big 12 members should generate a net income in the black.  Only four Big East members ranked in the top-50 for revenue generated.  However, five Big East members ranked in the top-5o for expenditures (Pittsburgh did not generate enough revenue to make the top-50 list, but is on the top-50 list for expenditures).  Again, every Big Ten athletics department made the top-50 list for expenditures.

The chart below depicts how many places each conference held in the list and the percentage of the conference which made the list.

Conference # of Athletics Departments % of Conference
ACC 9 75%
Big 12 7 70%
Big East 5 31%
Big Ten 12 100%
Pac-12 8 67%
SEC 9 75%

Top-50 Highest Athletics Department Revenues

This week, BusinessofCollegeSports.com has shown you the revenues, expenses and net income (profit) of athletics departments in the BCS AQ conferences.  To conclude this series, BusinessofCollegeSports.com will rank the top-5o athletics departments with the highest revenues, expenses and net income.  First up is athletics department revenues.

The data was obtained from the Department of Education and is from 2010-11.  While this data is not perfect, it is the only data publicly available for both public and private institutions.

School Athletic Department Revenue Conference
Texas $150,295,932.00 Big 12
Ohio State $131,815,819.00 Big Ten
Alabama $123,910,432.00 SEC
Florida $123,008,257.00 SEC
Michigan $122,486,490.00 Big Ten
Penn State $116,118,026.00 Big Ten
LSU $106,421,671.00 SEC
Oklahoma $104,338,843.00 Big 12
Auburn $103,982,441.00 SEC
Tennessee $102,495,204.00 SEC
Notre Dame $94,507,919.00 Big East
Wisconsin $93,594,766.00 Big Ten
Iowa $92,903,555.00 Big Ten
Georgia $92,341,067.00 SEC
Arkansas $91,768,113.00 SEC
Louisville $87,736,320.00 Big East
Florida State $86,946,503.00 ACC
Oregon $85,740,068.00 Pac-12
Kentucky $84,878,315.00 SEC
South Carolina $83,704,667.00 SEC
Nebraska $83,679,756.00 Big Ten
Stanford $81,125,476.00 Pac-12
Michigan State $80,963,182.00 Big Ten
Minnesota $78,924,683.00 Big Ten
Virginia $78,439,006.00 ACC
USC $75,707,273.00 Pac-12
Texas A&M $74,944,301.00 Big 12
North Carolina $71,369,784.00 ACC
Washington $70,231,336.00 Pac-12
Indiana $70,172,641.00 Big Ten
Oklahoma State $70,123,206.00 Big 12
Kansas $70,028,683.00 Big 12
Kansas State $68,875,266.00 Big 12
Duke $67,986,188.00 ACC
Purdue $66,066,303.00 Big Ten
UCLA $66,003,893.00 Pac-12
California $65,006,338.00 Pac-12
Boston College $64,078,272.00 ACC
Connecticut $63,043,322.00 Big East
Clemson $61,174,977.00 ACC
Virginia Tech $61,077,122.00 ACC
Colorado $60,923,253.00 Pac-12
Miami $60,325,003.00 ACC
Baylor $59,859,235.00 Big 12
Missouri $59,005,954.00 Big 12
Arizona $58,274,431.00 Pac-12
WVU $58,003,719.00 Big East
Maryland $57,765,018.00 ACC
Illinois $57,539,367.00 Big Ten
Northwestern $56,214,293.00 Big Ten

Several things stand out in this list.  First, every Big Ten team made the list.  This is notable, as the SEC is typically viewed as the “power conference” when it comes to all things finance.  The SEC had a great showing in the top-50, but only nine of its twelve athletics departments made the list.  The conference with the least athletics departments on the list was the Big East, which only placed four of its members on the list.

The chart below depicts how many places each conference held in the list.

Conference # of Athletics Departments on List % of Conference
ACC 9 75%
Big 12 8 80%
Big East 4 25%
Big Ten 12 100%
Pac-12 8 67%
SEC 9 75%

Highest Net Income: ACC Athletic Departments

Previously, BusinessofCollegeSports.com showed you the most profitable Division I football and basketball programs.  Now, BusinessofCollegeSports.com will show you which athletic departments turned the highest net income in Division I.  Today, data for the ACC, Big 12, and Big Ten conferences will be posted.  Tomorrow, data for the Big East, Pac-12 and SEC will be posted.  On Wednesday, the top-50 athletic departments with the highest net income will be ranked.

The data was obtained from the Department of Education and is for 2010-11.  The data from the Department of Education is by no means perfect.  Throughout this series, net income was calculated by subtracting the “grand total expenses” from the “grand total revenues” that the athletic department reported to the Department of Education.  Expenses in this instance included:  head and assistant coach salaries, athletically related student aid, recruiting expenses, operating (game-day expenses) and “not allocated” expenses.  The expenses faced by athletic departments, however, may be greater than those reported in this snapshot provided by the Department of Education.  For example, an athletic department may have capital expenses outside of those expenses included in the report.  This all being said, this data is the only data publicly available for both public and private institutions.  Thus, it at least provides some insight into athletic department revenues, expenses, and net income before taking into consideration additional expenses, like capital projects.

School Total Athletic Department Revenues Total Athletic Department Expenses Net Income
Boston College 64,078,272.00 64,078,272.00 0.00
Clemson 61,174,977.00 60,958,659.00 216,318.00
Duke 67,986,188.00 67,418,981.00 567,207.00
Florida State 86,946,503.00 86,946,503.00 0.00
Georgia Tech 46,910,364.00 46,910,364.00 0.00
Maryland 57,765,018.00 57,501,307.00 263,711.00
Miami 60,325,003.00 57,561,177.00 2,763,826.00
North Carolina 71,369,784.00 70,709,553.00 660,231.00
North Carolina State 54,711,001.00 54,518,850.00 192,151.00
Virginia 78,439,006.00 72,400,342.00 6,038,664.00
Virginia Tech 61,077,122.00 56,762,362.00 4,314,760.00
Wake Forest 42,286,588.00 42,286,588.00 0.00

In 2010-11, four ACC athletic departments did not turn a positive net income:  Boston College, , Florida State, Georgia Tech and Wake Forest.  Of these athletic departments, Wake Forest had the smallest amount of revenue, at $42,286,588.00.

Three ACC athletic departments turned a net income larger than one million dollars in 2010-11.  These athletic departments were:  Miami, Virginia and Virginia Tech.  Of these athletic departments, Virginia had the largest amount of net income in 2010-11, with $6,038,664.00.

Which Schools and Conferences Support Multi-Year Scholarships?

Recently, NCAA Division I institutions and their conferences voted on whether to overturn a measure enacted by the NCAA Board of Directors in October 2011 which allowed Division I institutions to offer student-athletes multi-year scholarships.  The effort to overturn the measure was narrowly defeated.  Of those eligible to vote, 125 voted to uphold the measure, 205 voted to overturn it, 2 abstained and 35 did not cast votes.  To overturn the measure, 5/8 of those voting (or, 62.5 percent) were required to vote in favor of overturning the measure.  Thus, the vote to overturn the measure was short by 0.38 percent of votes.

Given how close Division I institutions came to overturning the right to offer multi-year scholarships, one may wonder how votes were split on the issue.  First, consider those BCS automatic qualifying conferences and schools which voted to continue to allow Division I institutions to offer multi-year scholarships:

BCS AQ Conferences & Schools Voting to Allow Multi-Year Scholarships
Arizona State
Atlantic Coast Conference
Auburn
Big East Conference
Big Ten Conference
UCLA
Connecticut

DePaul

Duke
Florida
Georgetown
Georgia
Illinois
Indiana
Iowa
Kentucky
Maryland
Miami
Michigan
Michigan State
Minnesota
Mississippi
Mississippi State
Missouri
Nebraska
North Carolina State
Northwestern
Notre Dame
Ohio State
Oregon
Oregon State
Pac-12
Penn State
Pittsburgh
Purdue
South Carolina
Southeastern Conference
Stanford

UCLA

USF

Utah
Vanderbilt
Villanova
Wake Forest
Washington
Washington State

Most notably, the only BCS AQ Conference which voted to overturn the multi-year scholarship measure was the Big 12.  The ACC, Big Ten, Big East, Pac-12 and SEC conferences, on the other hand, all voted in favor to continue allowing schools to offer multi-year scholarships.  The only Big 12 member to vote to uphold the multi-year scholarship measure was Missouri.  However, it should be noted that Missouri will join the SEC later this year.  Many of the SEC’s member institutions voted similarly to continue to allow multi-year scholarships.

Of those 125 conferences and schools voting to allow schools to offer multi-year scholarships, 36.8 percent were BCS automatic qualifying conferences or schools.  This is a significant number, especially when considering that the majority of schools casting a vote on the issue were non-BCS AQ schools.  It further demonstrates that a majority of BCS AQ institutions are in favor of granting multi-year scholarships.  This is important, as whether a school offers multi-year scholarships may greatly affect recruiting and athletic department budgets going forward.

Next, consider which BCS AQ conferences and schools voted to overturn the NCAA’s measure allowing multi-year scholarships:

BCS Conferences and Schools Voting to Disallow Multi-Year Scholarships
Alabama

Arizona

Arkansas

Baylor

Big 12
Boston College

California-Berkeley

Cincinnati
Clemson
Colorado
Florida State
Georgia Tech
Iowa State
Kansas
Kansas State
LSU
Louisville
Marquette
Oklahoma
Oklahoma State

Providence

Rutgers

USC
St. John’s
Tennessee
Texas A&M
Texas Tech
Texas
Virginia

Virginia Tech

WVU
Wisconsin

Of the 205 conferences and schools which voted to override the NCAA’s measure allowing schools to offer multi-year scholarships, only 25 were BCS AQ conferences and schools.  Thus, BCS AQ conferences and schools only accounted for 15.6 percent of those wishing to disallow multi-year scholarships.  Most interesting, however, is that the Big 12 and its member institutions accounted for 31.25 percent of the BCS AQ schools and conferences voting to disallow multi-year scholarships.

The question to be raised given these numbers is, what competitive disadvantage does the Big 12 believe it faces if multi-year scholarships are allowed to be granted?  Opponents of the multi-year scholarship measure have made the reasons as to why they do not support the measure clear.  First, granting multi-year scholarships binds schools and athletic departments to student-athletes who may not be able to perform up to required standards either on the field or in the classroom.  Additionally, granting multi-year scholarships may impose a greater financial burden on athletic department budgets and may provide those schools offering multi-year scholarships with a recruiting advantage over those which do not offer multi-year scholarships. 

These factors may have been relevant in the Big 12 voting in large measure to not support multi-year scholarships.  In 2010-11, the Big 12 only had one school (Texas) which broke into the top-10 in terms of its recruitment expenses.  Likewise, in terms of the top-50 most profitable NCAA programs, the Big 12 once again only placed one of its teams (Texas football) into the top-10.  Given these factors, it is likely that the Big 12’s largest concern with offering multi-year scholarships rested upon a cost-benefit analysis of the measure, and what its teams would be able to offer budgetary-wise in terms of multi-year scholarships.

One thing is certain:  because NCAA Division I institutions and conferences voted to uphold allowing multi-year scholarships, it will be interesting to see the recruiting advantages those schools offering them receive going forward.

Georgia Tech Fans Costing Athletic Department Millions

Guest Author: Taylor King of ChuckOliver.net

Dan Radakovich and Paul Johnson must sit in their respective offices at 150 Bobby Dodd Way and shake their heads in disbelief. They look out at Bobby Dodd Stadium and must wonder how they are going to fill the seats next season.  Not only does it look bad for recruiting and player morale, The Institute is losing millions of dollars.  And with the “Big 3” games-Clemson, Virginia Tech and UGA-on the road this year, the revenue loss for the upcoming seasons has to be a hot topic for the Athletic Director and Head Football Coach with no solution in sight.

If you look at the 2011 football season, Tech lost just over $2.3 million in tickets sales at home football games alone.  How did I come up with such a figure?  Tech sold 337,622 of the potential 385,000 seats for its 2011 home games (87%.)  With an average ticket price of $50 multiplied to the difference of 47,378 empty seats, a figure of around $2,368,900 in revenue lost can be attributed to seats that were not purchased during the season.

That is astronomical if you think that the number does not include any monies lost in concessions or merchandise sales.  The ticket office even ran a few deals during the year which include the three for $99 for select ACC home games and the four tickets, four drinks, four hotdogs and a media guide for $100 for the Family Weekend game against UNC.

So what is it going to take for fans to start showing up? Click to keep reading…

ACC “Only” Adding Extra $1-2 Million Yearly in Expansion

Author: Chadd Scott of ChuckOliver.net

I have long been a proponent of expansion for the ACC.  I feel the league’s addition of Pittsburgh and Syracuse position it for long-term strength and growth while maintaining and building upon its on and off-field culture and excellence.  I understand this opinion is not shared by most, perhaps even many, particularly those who view college sports only in the prism of present-day football success.  I am willing to listen to these arguments when well-made.

The level of absurdity in opposition to ACC expansion reached a new high on February 6th with this tweet from the usually outstanding college football reporter Bryan Fischer of CBSSports.com:

If the ACC only gets $1-2 million per school, then expansion definitely wasn’t worth it.

Fischer’s figure comes from reporting done by the Sports Business Journal in an article you can read here.  I’m not debating the figure, although my educated guess would be that spread is on the low side; what I take huge exception with is Fischer’s use of the word “only” in connection with that sum and his belief ACC expansion was a bust because of it.

Fischer has worked hard to build a reputation as a valued contributor to the national college football conversation and his ignorant choice of the word “only” followed by an equally ignorant opinion – and I like this guy – poisoned conversation on social media as fans picked up this opinion and parroted it widely.

Fact: in college athletics an additional $1-2 million per year for any school, especially any ACC school, is a princely sum.  If this figure turns out to be accurate it will 100% validate ACC Commissioner John Swofford in his choice both to expand and who to invite.  This figure stands as a game-changer for every athletic department in the ACC.

In all of college sports there are only 22 self-sustaining athletic departments.  These athletic departments support themselves financially with no outside state funding, student fees (of which ACC schools are a major offender), or university subsidies.  Of those 22 schools only one is an ACC member: Virginia Tech.  The most current data available shows the Hokies clearing $968,000 in one fiscal year from athletics.

That should be all the evidence I need to present in making my case.  That 11 out of 12 current ACC members either lose money or rely on handouts to run their athletic departments proves conclusively what a huge difference an extra $1-2 million per year to them would mean.  For a complete look at the financial picture in the ACC follow this link for team-by-team football revenues, expenses, profits and athletic department profits.  Athletic departments in the ACC exist on surprisingly narrow margins.

Do you think the Heels, Jackets, Noles or Terps view 1-2 million additional dollars per year as an “only” figure?  If your boss gave you a raise that multiplied your take home pay by five times, would you say the raise was “only” quintupling your salary?

A report in the Washington Post regarding Maryland and linked above states, “According to the report, it will cost $11.6 million to fund eight years of men’s and women’s swimming, $9.5 million to fund men’s track and acrobatics and tumbling, and $8 million to fund water polo and men’s tennis.”  Eleven-point-six million dollars to fund eight years of men’s and women’s swimming means combined both programs cost roughly $1.45 million to fund annually.  Hmm.  That figure sounds familiar.  Oh yea, it’s smack dab in the middle of the “only” amount Maryland stands to benefit from ACC expansion.

That is how this discussion needs to be framed.  What does $1-2 million per year, per institution mean to the ACC schools?  It means being able to fully fund three non-revenue sports.  And perhaps here is where most college sports fans take a wrong turn.  College athletics includes more than football and men’s basketball, the profitable sports.  It also includes women’s basketball, baseball, softball, men’s and women’s tennis, track, soccer, volleyball, golf, swimming and diving, lacrosse, field hockey and a handful of other sports, all of which make no money and spend considerably.  Football and men’s basketball pay for all the other sports which drag down the bottom line profitability for athletic departments.

Fans always think about money colleges bring in from TV rights deals for football and the NCAA men’s basketball tournament, but never consider the huge amount of money going out.  And remember, the astronomical billion dollar figures reached in those deals with ESPN or CBS or Fox are contracted out over 10 or 20 years and must be split evenly among all conference member institutions.  Those pie pieces become small in a hurry.

The reality in college athletics is university presidents and athletic directors hustling every day to find new revenue streams and pump-up those which already exist.  As the competition for top student-athletes and coaches becomes more fierce, as the facilities arms race escalates, as the cost of winning increases, every dollar, let alone every million, is valuable.  The university presidents know this and it was the university presidents who voted on Swofford’s plan for expansion, their vote – unanimously in favor.

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