Category Archives: Mountain West

C-USA/MWC Merger a Flawed Idea Doomed to Fail

Guest Author: Chadd Scott of

I love big ideas.  I love creative solutions, collaboration and the power of thinking with a futures mindset.  I am passionate enough about these topics to write a book about them and their role in business  innovation, Saving Innovation: How to Harness the Incredible Promise of Innovation.  As an expert on innovation I can tell you that the coming merger of C-USA and the MWC into a new, hemispheric athletic league is not innovative, it is a copycat strategy doomed to fail.

There is nothing new in the leagues’ proposal aside from the possibility of a conference semi-final and championship football game which I doubt will pass NCAA muster.  C-USA and the MWC are simply copying what we’ve seen the Big 10, SEC, ACC, Big 12 and Pac-12 do: expand their geographic footprint to raise their attractiveness to potential media partners.

Here’s the problem. Click to continue reading

Conference Recruitment Expense Series: Mountain West Conference

Next up in the series is the Mountain West Conference.

Yesterday, recruitment expense data from the ACC, Big East, Big Ten, Big 12 and Conference USA was posted.  Today, data for the MAC, Pac-12, SEC, Sun Belt, Mountain West and WAC will be posted.  On Monday, a spreadsheet listing the top-50 spenders in terms of recruiting will be listed, sorted by total recruitment expense budget, amount spent per team on average and amount spent per player on average.

The data was obtained from the Department of Education.  Although this data is not perfect, it is the only data available for both public and private institutions.  Furthermore, the data provided is for the 2010-11 school year.  Additionally, it should be noted that the Air Force Academy does not report its data to the Department of Education, and as such, it will not be considered in this posting.  Furthermore, the “Average Per Player” column was calculated using the total number of male or female players in each school’s athletic department.  The schools are not required to report the number of student-athletes they recruited per a given year to the Department of Education. 

Schools Men’s Sports Recruiting Expenses Average Per Team Average Per Player
Air Force N/A N/A N/A
Boise State $223,629.00 $37,271.50 $993.91
Colorado State $411,818.00 $82,363.60 $2,167.46
New Mexico $435,937.00 $54,492.13 $1,540.41
San Diego State $221,214.00 $36,869.00 $996.46
TCU $493,981.00 $70,568.71 $1,836.36
UNLV $554,461.00 $79,208.71 $2,475.27
Wyoming $332,013.00 $55,335.50 $1,443.53
Schools Women’s Sports Recruiting Expenses Average Per Team Average Per Player
Air Force N/A N/A N/A
Boise State $159,698.00 $17,744.22 $764.11
Colorado State $163,901.00 $20,487.63 $815.43
New Mexico $146,346.00 $16,260.67 $799.70
San Diego State $184,276.00 $18,427.60 $685.04
TCU $237,536.00 $26,392.89 $1,115.19
UNLV $217,069.00 $21,706.90 $1,019.10
Wyoming $142,555.00 $20,365.00 $937.86

The MWC school which spent the most on recruiting for its men’s sports teams in 2010-11 was UNLV.  The Runnin’ Rebels spent $554,461.00 to recruit student-athletes for its men’s sports teams in 2010-11.

Although San Diego State’s men’s basketball team ran deep into March Madness in 2011, San Diego State spent the least on recruiting for its men’s sports teams in the MWC.  San Diego State only expended $221,214.00 on recruiting for its men’s sports programs.

TCU spent the most on recruiting for women’s programs in the MWC in 2010-11.  TCU spent $237,536.00 to recruit student-athletes for its women’s sports programs in 2010-11.

Mountain West Financials ’10-’11

The next conference we’re looking at is the Mountain West. The ACCBig XIIBig EastC-USABig TenMACPac-12 and SEC have been previously posted. The chart is sorted by ’10-11 profits for each football and basketball program from greatest profit to least. The “% Invested” column shows how much of the specific sport’s revenue goes back into that specific sport. Please read below before viewing the financials.

About the data: All of the data is from reports each school files with the US Department of Education. It is the only available data for both public and private universities. However, there can be variances in how each school chooses to report data. For example, each school can decide for itself whether to break out television revenue by sport or leave it in a generic revenue category, which causes variances. After speaking with dozens of schools the most common practice appears to be attributing the majority of television revenue to football and a portion to basketball. The most common split is 65/35.

There are also variances from year-to-year, so be careful when comparing this data to last year’s data. For example, Florida State’s football program showed a gain of approximately $14 million from ’09-’10 to ’10-’11. When contacted for comment FSU explained that in ’10-’11 they broke out contributions by sport, which they hadn’t done previously.

Although far from perfect, this data is the only available data for all Division I programs (with the exception of the military academies). We just want to make you aware of the possible variances and will let you draw your own conclusions.

*Please note: data for Air Force is not available.


San Diego State Takes Calculated Risk Joining Big East

Guest author: Dr. Michael Lorenzen

Dr. Michael Lorenzen is the principal owner of Collegiate Athletics Strategy Advising, a firm that provides advisement services to collegiate athletics administrators 

One of the most significant trends to impact intercollegiate athletics in the last several years has been conference realignment.  While some of the most landscape-altering changes have probably already been completed, there is almost certainly going to continue to be movement as universities make decisions that may seem to contradict completely the traditional understanding of conference membership.  After all, the historic significance of collegiate athletic conferences has been to organize a group of universities around a common sense of mission, history, size, and geographic location in order to create affiliations and rivalries that benefit all involved.  In that context, it is reasonable to ask how in the world some of the latest changes make any sense at all–does San Diego State really fit in the Big East?

There is a fairly straightforward analytical approach to evaluating that sort of move and in the case of San Diego State, the financial bottom line would suggest that the move makes both dollars and sense.

The first consideration for most schools is the most obvious one–what sort of media rights contract exists in the target conference and how does that compare to their current situation?  San Diego State has been a member of the Mountain West, which was likely paying out up to $1.9 million per institution per year according to Boise State President Bob Kustra.  By comparison, the Big East media deal was projected to pay $3.7 million per year to football schools.  A gain of $1.8 million per year could be a powerful incentive.

At the same time, that Big East deal pales when compared to the other conference negotiations in the last several years.  The new Pac 12 contract, which will begin with the 2012-13 season, will be worth more than $225 million per year — or $2.7 billion over the life of the deal, according to the Sports Business Daily and The Associated Press.

The ACC currently operates under a deal for $155 million a year, and the Big 12 reached a deal with Fox that made its total annual package worth about $130 million.  The SEC gets $205 million per year and the Big 10 gets $220 million.  Though there is clearly some variation in the number of ways each of those pies gets split, a $10 million per year distribution per school is rapidly becoming the norm.

So what might the Big East alignment eventually net San Diego State? One former television executive consulting to the Big East estimates that the next Big East media package will conservatively bring $90 million per year.  The current Big East practice is to split the total package with 70% going to football and 30% to basketball.

As announced last week, the new Big East includes 8 full members: Houston, SMU, UCF, Cincinnati, Connecticut, Louisville, Rutgers, and USF.  Boise and San Diego State have committed to be football only members, and the Big East could still land Air Force and Navy as football only members.  The 8 basketball only members would be: DePaul, Georgetown, Marquette, Notre Dame, Providence, Seton Hall, St. John’s, and Villanova.

Based on a $90 million annual package, there would be $63 million for football and $27 million for basketball.  Given the projected membership above, that leaves a $5.25 million share for football only schools, a $1.687 million share for basketball only schools, and a $6.937 million share for full members.  Under that scenario, San Diego State could be increasing their annual take from football media rights from $1.9 million to $5.25 million, for a net gain of $3.35 million.

The second consideration is the share of BCS revenue that a school in a conference with an automatic qualifying slot would gain as a result of their membership, assuming the conference has an equal revenue sharing agreement.  The Big East currently has an AQ slot (the Mountain West has appealed for a spot).

Under the current BCS arrangement, each conference whose team qualifies automatically for the BCS receives approximately $22.3 million in net revenue. A second team brings an additional $6 million to its conference. Notre Dame receives $1.8 million. Army, Navy and Brigham Young also receive $100,000 each, and each of the NCAA’s Football Championship Subdivision conferences receive $250,000.

At one point late in the season this year both Houston and Boise State were ranked in the top 10 in the BCS, which would mean $28.9 million for the Big East if both had been members and chosen for BCS games. Adding Houston, Boise State, and two other schools for football gets the Big East to 12 football members, which would yield a max of $2.4 million per institution from BCS participation if two schools were chosen to participate in BCS games.  Add that $2.4 million to the incremental $3.35 million from the media rights deal, and now San Diego State is $5.75 million ahead on revenue by switching conferences.

The third consideration is the impact on the cost side of the athletics equation.  According to the US Department of Education, SDSU is currently spending $12.1 million on 121 football players, or $100.2K per player.  That is almost double the median spending in the Mountain West conference in absolute terms and $39K more per player than their current peer institutions spend.  This gives SDSU a fairly dominant position in the Mountain West.

After taking out Georgetown (who does not play football at the BCS level), the median spending in the Big East on football is $12.6 million on 111 players, or $112.1K per player.  To rise to the median level of football spending in the Big East that would require an incremental $12K per player, or $1.45 million per year.

Another important component of the cost bar is staffing.  One way to quickly measure and benchmark athletic staffing levels is to evaluate the number of Full Time Equivalent positions in each department as reported on their websites.  In order to match Big East average staffing levels SDSU would have to add a total of 12 staff FTEs.  Relative to their peers in the Mountain West, SDSU would require an additional 9 FTEs.  At an average of $60K including benefits that would require an additional $720K per year to match the Big East and $540K per year to reach Mountain West norms.  Since SDSU is only participating in football in the Big East, let’s assume that only 15% of staffing is attributed to football, or 2 FTEs.  That would still require an incremental investment of  $120K per year.  Add that to the increased spending per player and you get an annual operating expense increase of $1.57 million per year, which still leaves a tidy net gain of $4.18 million per year by switching football to the Big East.

The fourth consideration, and one that gets dwarfed by all of the others in the current world of professionalized collegiate athletics, is the impact on the remainder of the athletic department.  In the case of SDSU, the biggest factor is the effect on what is currently a very successful basketball program.  Last year SDSU earned more than $1 million profit from basketball operations on revenues of $4.7 million.  The Mountain West median basketball profit was $300K on median revenues of $2.9 million, so SDSU has a very strong and successful position compared to their current peers.

With the move of the football team to the Big East, SDSU had to find a new home for all of the other sports since the Mountain West was no longer interested in having the school without football.  The destination conference is the Big West, which is generally a weaker conference in terms of revenue and level of play.  Last year the Big West median revenue on basketball was $1.4 million and not a single school reported a profit, with several losing money.

If SDSU approximated the rest of the Big West as a result of lower level of competition, smaller venues, lower attendance, lower level recruits, etc., it would be reasonable to assume that SDSU basketball would become a break-even enterprise.  The impact on the department as a whole would be a reduction in departmental revenues by several million dollars and departmental income available for supporting other sports/programs by $1 million.

Under the best case scenario, where the Big East lands a media rights deal worth $90 million a year and has two teams in BCS games, SDSU stands to gain $4.18 million per year after deducting incremental spending on football. However, on the other end of the spectrum, the worst case scenario could cost SDSU approximately $770,000 per year, which would involve no increased media rights deal and loss of AQ status in the Big East and decreased basketball revenue consistent with typical Big West basketball revenue.

Those are likely the most significant considerations for a university in SDSU’s position and the ones that would be expected to drive the final decision.  More difficult to quantify are issues like the impact on football student-athletes from a more demanding travel schedule, the effect that playing lower ranked teams has on recruiting and quality of experience for every other team in the department, and the overall message that accompanies the move.

How Conference Realignment Could Impact the BCS

The Big 12 has been in danger of extinction for more than a year, and now the Big East has been added to the Most Endangered list with strong rumors that Pitt and Syracuse are joining the ACC.

Both are automatic-qualifying conferences, which means they get an automatic berth in a BCS bowl game (Orange Bowl, Sugar Bowl, Fiesta Bowl or Rose Bowl). But what happens if one of those conferences folds? Or perhaps one is forced to add several schools to remain viable?

Current AQ conferences were determined based on data from the 2004, 2005, 2006 and 2007 football seasons. That data will be reevaluated following the 2011 season based on the 2008, 2009, 2010 and 2011 seasons. Perfect timing for conference realignment.

Three sets of data are considered: rank of the highest-ranked team in the conference, rank of all conference teams and number of teams in the top 25.

Here’s how it all played out last time:

1. Average rank of highest-ranked team in BCS Standings
1. Pac-12……………………………………3.5
2. Southeastern…………………………..3.5
3. Big Ten……………………………………4.25
4. Big 12……………………………………..4.5
5. Atlantic Coast…………………………..8.25
6. Big East…………………………………..9.0
7. Mountain West……………………….14.25
8. Western Athletic……………………..16.75
9. Conference USA………………………40.975
10. Mid-American…………………………55.25
11. Sun Belt………………………………..68.625

2. Average conference ranking (ranking of all teams in the conference by the six computers)
1. Pac-12…………………………………….40.17
2. Southeastern…………………………..40.65
3. Big 12…………………………………….42.38
4. Atlantic Coast………………………….42.47
5. Big Ten…………………………………..42.65
6. Big East………………………………….46.76
7. Mountain West…………………………67.46
8. Western Athletic……………………….76.36
9. Conference USA………………………..81.41
10. Mid-American………………………….89.82
11. Sun Belt…………………………………93.52

3. Adjusted Top 25 performance ranking (number of teams in top 25 of BCS standings, as a percentage of the top conference)
1. Southeastern…………………………….100.00%
2. Big Ten……………………………………..78.35%
3. Pac-12………………………………………66.29%
4. Big 12……………………………………….64.29%
5. Atlantic Coast…………………………….57.14%
6. Big East…………………………………….49.11%
7. Western Athletic…………………………22.32%
8. Mountain West…………………………..20.09%
9. Conference USA……………………………0.00%
10. Mid-American………………………………0.00%
11. Sun Belt……………………………………..0.00%

There is a threshold for annual qualification that requires the conference be in the top six in the first two sets of data and in the top 50% in the third set of data. However, a team can obtain a waiver from the Presidential Oversight Committee if they are in the top six in the first two sets of data, or top five in one and top seven in the other, and top 33% of the third set.

In light of this, it’s important conferences take on-the-field performance into account when making realignment decisions. This doesn’t mean that’s enough to get you into an AQ conference (I’m talking to you, Boise State), but it does have to be considered. If the Mountain West still had Utah, TCU and BYU, along with the Boise State addition, the Big 12’s AQ status could be in serious danger depending on who they chose to add.

Fortunately for the Big 12, I don’t think there’s a non-AQ who could surpass them at this point, even with the losses. However, I do think it means if the Big East or Big 12 folds there would be an AQ opening for the taking.

Why TCU And Utah Are Moving to AQ Conferences and Boise State Is Not

Boise State (via Flickr user BlueTurf)

In my opinion, television is the number one reason TCU and Utah are moving to automatic-qualifying conferences and Boise State is not. TCU brings the 5th largest media market, and Utah the 31st. Boise State? Well, its media market ranks #120.

Other factors come into play when conferences realign: does the university offer academics comparable to the other members of the conference? Does adding the school open up new recruiting territory for the conference? Are philosophies the same? The latter is the reason BYU is best off as an independent.

What isn’t a deciding factor? How good the football program may or may not be. If it was based purely on football acumen, Boise State might be in an AQ conference. But Boise State doesn’t have a top media market or fertile recruiting ground. Conferences are asking, “What can you do for us?” and Boise State doesn’t have an answer.

Even if the move to 16-team super conferences came to fruition as many have speculated, Boise State is no one’s target. The SEC, Big Ten and Pac-12 would go after the most attractive targets in the Big East and Big 12: Texas A&M, Oklahoma, Rutgers, and Missouri. Teams like Oklahoma State and Texas Tech can likely ride the coattails of Oklahoma and Texas A&M into conferences. Texas will be an independent by then.

Why would any conference add Boise State? Why would the members agree to a smaller slice of the pie to add a school that brings virtually nothing to the table in terms of media market or recruiting ground.

This isn’t a personal attack on Boise State. I’ve been impressed with what they’ve done on the football field, and I look forward to seeing how they do against stronger opponents in the future. Their season opener against UGA is probably the one football game I’m looking most forward to this fall. But unfortunately, I don’t think there’s much they can do to improve their situation in terms of their conference home.

Which Is More Important: Booster Contributions or NCAA and Conference Distributions?

It’s a “Which came first, the chicken or the egg?” type question – which propels a school to success: booster support or a top revenue generating conference? Obviously both are important, but which do top-ranked football programs rely upon more?

I recently ran across this article by Michael Lewis of the Salt Lake Tribune where he discusses how crucial it is for Utah to start bringing in contributions that rival those received by other Pac-12 institutions. Utah had its best fundraising year ever last year, raising $5.2 million. However, it’ll need to raise over twice that just to be at the league average of $11 million in the Pac-12. To match the leader in contributions in the Pac-12, USC, Utah will need to raise around $27 million.

I took a look at the financial statements I have for schools and found a familiar trend amongst those who’ve had football success in recent years. The majority receive more in contributions than in conference distributions. So which is more important? Contributions or conference distributions? Does being in a top conference bring you more contributions? Do higher levels of contributions increase your chance of getting into an AQ conference if you’re in a non-AQ conference?

Let’s take a look at last year’s BCS Top 25 and see which schools relied upon more, contributions or conference distributions:

  School Contributions NCAA/Conference Distributions Difference
1 Auburn $29,731,122.00 $19,646,038.00 $10,085,084.00
2 Oregon $73,809,775.00 $12,756,603.00 $61,053,172.00
3 TCU*      
4 Stanford*      
5 Wisconsin $19,247,563.00 $21,521,927.00 ($2,274,364.00)
6 Ohio State $27,327,347.00 $23,943,397.00 $3,383,950.00
7 Oklahoma $26,601,241.00 $13,548,733.00 $13,052,508.00
8 Arkansas $13,124,745.00 $20,556,381.00 ($7,431,636.00)
9 Michigan State $21,292,589.00 $22,578,159.00 ($1,285,570.00)
10 Boise State $6,553,812.00 $6,242,864.00 $310,948.00
11 LSU $38,255,521.00 $19,883,259.00 $18,372,262.00
12 Missouri $13,454,020.00 $10,681,242.00 $2,772,778.00
13 Virginia Tech $16,138,765.00 $12,081,194.00 $4,057,571.00
14 Oklahoma State $51,877,388.00 $12,570,471.00 $39,306,917.00
15 Nevada $4,686,526.00 $2,368,894.00 $2,317,632.00
16 Alabama $33,739,056.00 $21,288,565.00 $12,450,491.00
17 Texas A&M $20,512,889.00 $11,900,472.00 $8,612,417.00
18 Nebraksa $6,103,706.00 $10,978,295.00 ($4,874,589.00)
19 Utah $5,750,835.00 $4,175,348.00 $1,575,487.00
20 South Carolina $23,987,283.00 $19,549,286.00 $4,437,997.00
21 Mississippi State $0.00 $18,234,538.00 ($18,234,538.00)
22 West Virginia  $15,729,528.00 $10,416,908.00 $5,312,620.00
23 Florida State $23,245,513.00 $13,323,332.00 $9,922,181.00
24 Hawaii $13,323,332.00 $2,284,893.00 $11,038,439.00
25 UCF $5,308,200.00 $3,337,076.00 $1,971,124.00

A couple of things to note. First, TCU and Stanford’s numbers are unavailable because they are private institutions. Second, Mississippi State shows no contributions because they chose not to take a distribution from their booster club in fiscal year 2010. Not all schools separate out NCAA and conference distributions, so they are tabulated here together.

As you can see, most of the schools on this list take in significantly more in contributions than in NCAA and conference distributions, regardless of conference affiliation.

Are boosters more important than television contracts or BCS and March Madness appearances? How does a school increase the contribution levels of its alumni to stay competitive?

BCS Payouts vs. March Madness Payouts

Quite frequently in the debate over the BCS there are comparisons to March Madness. Proponents of moving to a playoff system point to the approximately $771 million a year (beginning in 2011) March Madness generates in television alone (previously an average of $545 million). Meanwhile, the BCS bowls will generate just $125 million beginning in 2011 (previously$96.4 million per year ).

While it’s true March Madness generates more television revenue overall, that doesn’t necessarily mean more money for each athletic department. A total of $452,200,000 was distributed by the NCAA in 2010-2011, and less than half of all monies distributed went back into the athletic department with no strings attached (via the Basketball Fund). Here’s the breakdown:

Basketball Fund ($180,467,000): Monies are distributed based on a six-year rolling period. Institutions receive one unit for each appearance, not including the championship game. Each unit was worth $239,664 in 2010-2011.

Academic Enhancement ($22,461,000): Each Division I institution gets $66,000 to use for academic support service for student-athletes.

Conference Grants ($8,115,000): Each conference receives $261,744 less an agreed upon amount remitted to the regional officiating advisors program. Funds must be used to improve officiating, enhance conference compliance and enforcement programs, drug abuse education, enhancement of opportunities for ethnic minorities, and development of gambling education programs.

Sports Sponsorship Fund ($60,155,000): Each school’s share is determined based on the number of varsity sports sponsored. Points begin with the 14th sport (the number required in Division I), and $30,091 is distributed for each sport above thirteen. These monies may be directed to individual institutions or to the conference for distribution, as decided upon by each conference.

Grants-In-Aid Fund ($120,309,000): Each school’s share is determined based on the number of grants-in-aid awarded. These monies may be directed to individual institutions or to the conference for distribution, as decided upon by each conference.

Student Assistance Fund ($59,738,000): This fund also consists of the Special Assistance Fund and the Student-Athlete Opportunity Fund. For the Student Assistance Fund, all athletes are eligible to receive these funds, even if they have exhausted eligibility or no longer participate due to medical reasons. These monies are distributed to the conference who decides how to allocate. This fund is to be used to assist student-athletes with financial needs that “arise in conjunction with participation in intercollegiate athletics, enrollment in an academic curriculum or that recognize academic achievement. The Student-Athlete Opportunity Fund is distributed by conferences based on the formula used for sports sponsorship and grants-in-aid. The Special Assistance Fund is to be used to meet student-athlete financial needs of an emergency or essential nature for which other financial aid is not available.

Supplemental Support Fund ($955,000): Used to support campus-based initiatives designed to foster student-athlete academic success at eligible limited resource institutions.

At the end of the day, most conferences receive larger payouts from the BCS than March Madness when it comes to money going back into the athletic department with no strings attached. Below is a look at the payouts for the past four years. Totals in red reflect conferences who received a larger payout from basketball than football for the given year. You should also note the football payouts indicated for the non-AQ conferences (Mountain West, Mid-American, Sun Belt, C-USA and Western Athletic) are based on the payout from the BCS before the agreement between the conferences to split BCS money equally between all non-AQ conferences kicks in. Also, these numbers do not include payouts for non-BCS bowl games.

ACC 2006-2007 2007-2008 2008-2009 2009-2010
Football $18,088,675 $18,324,992 $18,672,725 $19,787,058
Basketball $14,149,120 $15,090,053 $15,863,538 $18,220,902
Difference  $3,939,555 $3,234,939 $2,809,187 $1,566,156
Big 10 2006-2007 2007-2008 2008-2009 2009-2010
Football $22,588,675 $22,824,992 $23,172,725 $24,287,058
Basketball $13,087,936 $13,561,946 $13,803,338 $15,332,222
Difference $9,500,739 $9,263,046 $9,369,387 $8,954,836
Big 12 2006-2007 2007-2008 2008-2009 2009-2010
Football $18,088,675 $22,824,992 $23,172,725 $19,787,058
Basketball $14,325,984 $15,663,093 $16,275,578 $17,109,871
Difference $3,762,691 $7,161,899 $6,897,147 $2,677,187
Big East 2006-2007 2007-2008 2008-2009 2009-2010
Football $18,088,675 $18,324,992 $18,672,725 $19,787,058
Basketball $14,856,576 $16,618,160 $19,365,880 $23,109,436
Difference $3,232,099 $1,706,832 ($693,155) ($3,322,378)
Pac 10 2006-2007 2007-2008 2008-2009 2009-2010
Football $18,088,675 $18,324,992 $18,672,743 $19,787,058
Basketball $11,849,888 $12,606,880 $13,391,298 $14,665,604
Difference $6,238,787 $5,718,112 $5,281,445 $5,121,454
SEC 2006-2007 2007-2008 2008-2009 2009-2010
Football $22,588,675 $22,824,992 $23,172,725 $24,287,058
Basketball $13,087,936 $14,708,026 $15,657,518 $15,110,015
Difference $9,500,739 $8,116,966 $7,515,207 $9,177,043
Mountain West 2006-2007 2007-2008 2008-2009 2009-2010
Football $3,529,600 $3,724,000 $9,788,800 $9,878,710
Basketball $3,183,552 $4,011,280 $4,120,399 $3,999,710
Difference $346,048 ($287,280) $5,668,401 $5,879,000
Mid-American 2006-2007 2007-2008 2008-2009 2009-2010
Football $1,964,800 $1,508,000 $2,094,400 $2,139,355
Basketball $1,945,504 $1,910,133 $1,442,140 $1,333,237
Difference $19,296 ($402,133) $652,260 $806,118
Sun Belt 2006-2007 2007-2008 2008-2009 2009-2010
Football $1,443,200 $2,062,000 $1,529,600 $1,559,570
Basketball $1,061,184 $1,146,080 $1,854,180 $2,222,061
Difference $382,016 $915,920 ($324,580) ($662,491)
C-USA 2006-2007 2007-2008 2008-2009 2009-2010
Football $2,486,400 $2,616,000 $2,659,200 $2,719,140
Basketball $7,782,016 $8,213,573 $9,064,879 $8,507,523
Difference ($5,295,616) ($5,597,573) ($6,405,679) ($5,788,383)
Western Athletic 2006-2007 2007-2008 2008-2009 2009-2010
Football $9,008,000 $9,170,000 $3,224,000 $7,798,925
Basketball $3,006,688 $3,247,227 $3,090,300 $3,110,886
Difference $6,001,312 $5,922,773 $133,700 $4,688,039

I think it’s interesting to note that AQ football conferences are bringing in more from March Madness than non-AQ football conferences. Some of that has to do with the smaller size of some of the non-AQ conferences, but it’s still rather sizeable disparity. Nonetheless, I imagine people still find the March Madness system more digestible because it is a playoff system and because payouts are based on number of appearances.

Special thanks to my research assistant Eric Heckman for helping me compile the data.

Why Isn’t Return of Bowl/TV Money a Penalty for NCAA Infractions?

UPDATE: Based on the massive amounts of tweets and emails I have received since posting this, some clarification is in order. Many believe you all (my valued readers) are not smart enough to know that non-AQ teams individually receive less than AQ teams when the day is done. I believe you all know this. But, just in case you don’t, I’ve revised the information below to make it abundantly clear.

Listening to sports talk radio over the past couple of weeks I’ve heard quite a few people suggest that the only real punishment for a program like USC or Ohio State would be to hit them in the wallet. Quite a few of you believe there should be a return of tv and bowl payout money if a team has to vacate games. Let’s talk about why that will likely never be a penalty in college football.

First, here’s something important you should know, if you don’t already. How do the payouts work for BCS bowl games (Rose, Sugar, Fiesta, Orange) and the National Championship Game?

I bet many of you didn’t know the first team selected from one of the non-AQ conferences (MAC, WAC, Sun Belt, Mountain West, C-USA) actually receives a larger, yes larger, amount than a team who automatically qualify from one of the AQ conferences (SEC, ACC, Big Ten, Big 12, Pac-12, Big East). It’s true, although that’s before conferences get involved. The first team selected from a non-AQ conference receives $24.7 million* (see below for how this payout is handled). The automatic qualifiers from the six AQ conferences receive $21.2 million each. Any other AQ teams who play in BCS bowls take in $6 million each.

In fact, the non-AQ conferences receive money even if no team from a non-AQ conference is selected for a BCS bowl game, to the tune of $12.35 million. Whether the non-AQs have a team in and receive the $24.7 million, or receive the $12.35 million for not having a team in, they have decided amongst themselves to divide BCS monies evenly between all five conferences. That’s their choice.

Now, based on tweets and email received after I wrote this piece, I need to explain this a little bit further. It is true that the first non-AQ team selected for a BCS bowl receives more than an automatic qualifying team – but that’s before conferences get involved. Payouts are filtered through the conference the team belongs to, and the conference decides how to divide the payout. The non-AQ conferences have decided in an agreement amongst themselves to divide all BCS money equally between all conferences. By contrast, each AQ conference keeps what it receives and determines how to divide amongst the schools. Most subtract expenses of the team who participated and then divide the rest equally. At the end of the day, each AQ school receives more than each non-AQ school. But, I’m pretty sure you all knew that already.

Just for the sake of spreading knowledge, there are other teams who receive a BCS share even if they don’t compete. Notre Dame, for example, receives $6 million if they are chosen for a BCS bowl, but still receive $1.7 million even if they aren’t selected. Army and Navy each receive $100,000, even if not chosen for a BCS bowl. In addition, each FCS conference (who don’t even participate in the BCS) receive $250,000.

Now that we’ve covered how payouts work, make note that the NCAA has no involvement whatsoever. That’s the short answer as to why a return of bowl money isn’t part of any NCAA penalty. It’s out of their control.

The BCS would have to demand the return of bowl money. That’s not going to happen. I heard Bill Hancock on the radio months ago talking about USC’s penalties and he was asked why they weren’t taking back the payout received by USC for the BCS National Championship Game since the win was being vacated. It was pretty simple in his mind: if USC hadn’t played in that game, another Pac-10 team would have played in a BCS bowl since the Pac-10 gets an automatic berth. So, either way the Pac-10 would have gotten the same payout, because as I described above, the payout is the same whether you’re playing in the title game or any of the other four BCS bowls. Plus, the payout goes to the conference, not to the individual team. That makes it easy for the BCS to put the burden on the conferences. The Pac-10 would have to reclaim the funds from USC for the portion they received. That’s never going to happen.

Even as USC serves their bowl ban, they’re still receiving the same distribution from the now Pac-12 as they would receive if they were participating in bowls. The only real loss is the actual playing in the bowl, which I would imagine has a larger impact on the players than the institution. The school will still receive the same financial benefits from the conference, including a portion of the BCS payout to the conference.

The same is largely true when we talk about reclaiming television money as a penalty. It would have to be a conference level decision, and a conference is never going to penalize a team like that. However, the NCAA does have a penalty whereby they can ban a program from live television appearances. They haven’t used it since 1994, when Ole Miss was banned for one year. Most believe it’s no longer used because it impacts more than just the school being punished – the punishment is felt by every program that plays the school, especially FCS schools who are missing their shot to be on television and increase their profile.

I’m not defending the situation, but I hope I’ve shed some light on why a return of bowl or tv money is never discussed in terms of penalties levied by the NCAA.

*These are the numbers from the 2010-2011 season.

Using Student Fees to Support Athletic Department Budget

Today over on USA Today they’ve got a piece on schools who use student fees and other institutional support to round out the athletic department budget. The piece focuses on Rutgers, but also lists the ten schools who rely the most on these funds in automatic qualifying conferences: 

Schools from BCS automatic qualifying conferences with the greatest amount of 2009-10 athletics revenue allocated from institutional or government support or student fees: 
School, conference Amount
Rutgers, Big East $26,867,679
Connecticut, Big East $14,578,029
South Florida, Big East $14,185,037
Maryland, ACC $13,749,781
Tennessee, SEC $13,552,020
Cincinnati, Big East $13,457,464
Virginia, ACC $12,160,103
California, Pac-10 $12,098,974
Oregon State, Pac-10 $10,960,616
Arizona State, Pac-10 $10,349,536
Note: Amounts not adjusted for inflation

Sources: Individual schools, USA TODAY research in conjunction with Indiana University’s National Sports Journalism Center

A couple of months ago, I did a series of pieces on schools who were relying on student fees to balance their athletic department budget. You can find the Top 25 in the BCS for the 2009-2010 school year here. If you’re curious about a specific school, I posted the numbers for every BCS school by conference. You can find the SEC, Big Ten and Big 12 here, the ACC, Pac-10 and Big East here, and the non-AQ conferences here.

A number of you have pointed out that these student fees often get students free admission to athletic events. Although that’s a nice perk, I wonder what percentage of the student body actually takes advantage of this offer. To me, this is not the best argument in favor of student fees going to subsidize the athletic department.

That being said, I don’t necessarily have an issue with universities subsidizing the athletic department. After all, it is a part of the university. Just as the university funds the English department, they fund the athletic department. When an athletic department is able to support itself, like these we looked at a couple of weeks ago, that’s fantastic. However, I’m not convinced that every athletic department should be expected to do so. Athletic departments should be expected to operate as efficiently and profitably as possible while meeting the goals of the department and the university. What I don’t like to see are universities who are self-sustaining and still receive student fees or institutional support.

Athletics do a number of things for a university. They often receive national attention, which strengthens their brand. This causes increases in applications and licensing revenue, amongst other benefits. I’ve been researching this in-depth for my new book on the business of college football, and I can tell you that there are a number of advantages to a university having an athletic department. I don’t honestly believe that any university would be so fiscally irresponsible as to assist in funding an athletic department if they weren’t receiving a return on their investment, at least not when you look at a broad spectrum of years.

Just some food for thought until my book is out and I can share more concrete examples.