Category Archives: BCS

The BCS Presidential Oversight Committee Meeting: Questions Presidents Must Ask

Today, the BCS Presidential Oversight Committee is meeting in Washington, D.C.  At the meeting, FBS conference commissioners will present the new post-season model, which they endorsed last week, to 12 university presidents.  The BCS has acknowledged that the proposal involves a four-team seeded playoff.  Other reports indicate that the four teams would be selected by a committee and would face-off in already existing bowl games.  Additional reports indicate that the site of the national championship game would be determined by a bidding system.  While the commissioner’s proposed new post-season model marks clear differences from the current BCS system, university presidents should ask the following questions and require sufficient answers before signing off on the plan. 

1.  Term of the Agreement

The first question presidents must ask, is how long of an agreement must they enter into if they approve the proposed plan?  The current BCS system has been in place since 1998.  While it was adopted to thwart previous criticism of the NCAA football post-season model, the current BCS system has attracted a large amount of criticism. 

Recognizing the amount of criticism that seems to befall any college football post-season model, university presidents should suggest that the term of this agreement be long enough to work any kinks out of the system, but not so long that changes cannot be made if it turns out to be an imperfect system.  In that regard, a five to six-year agreement would likely be the most beneficial term.

The elephant in the room when it comes to the length of the term, is arguably television contracts.  The expiration of the BCS’s current agreement coincides with the expiration of its television agreements.  Thus, there is the possibility that the BCS and conference commissioners believe that a lengthier agreement will benefit network negotiations.   Arguably, the longer that the BCS and conference commissioners can say that the new deal is in place, the more that networks will be willing to spend on deals. 

However, by shortening the term, the conferences and universities take away some of the negotiating power from the networks.  Shortening the term essentially requires networks to re-negotiate their television contracts at the end of the term.  Understandably, this opens up the possibility of conferences and universities obtaining more money from multiple television contracts.

2.  The Selection Committee

As noted above, it appears that conference commissioners propose that the teams that participate in the four-team playoff be selected by a committee.  This is arguably the least controversial proposal brought by the commissioners.  Most notably, a selection committee is used to seed the NCAA Men’s Basketball Tournament.  Although it is an imperfect method, it works.  Nonetheless, the presidents should question how the committee will be made up, and what safeguards will be in place to ensure that the nation’s top-four teams play in the playoff.

3.  Costs

The biggest issue university presidents should have with the proposed system, is its cost.  For all intensive purposes, under the proposed model, a team that makes the national championship game would be playing in two bowl games.  Playing in two bowl games understandably involves significant costs.

Before approving the proposed model, university presidents must rest assured that they understand the extent of these costs and who they will be borne by.  Under the current BCS model, teams playing in BCS bowl games are required to purchase a certain amount of tickets.  If they do not sell these tickets, they eat their cost.  This can cost a school hundreds of thousands of dollars.  Additionally, there are large travel costs associated with playing in bowl games.  Under the proposed model, these costs will now have to be borne twice.  This is because teams will have to travel to a bowl site to play in the playoff and then again to whichever city bid the highest to host the national championship game.

For contractual reasons, it is unlikely that the commissioners will sway away from hosting the playoff at a bowl site.  Thus, university presidents must request that the BCS or conferences pay some portion of their travel costs, in order to make this an economically feasible solution.

Overall, in presenting this proposal, the conference commissioners have answered many questions and addressed many of the criticisms of the current BCS model.  However, it is clear that issues remain that must be addressed before it is adopted as the new college football post-season model.

Will College Football Fans See a BCS Plus-One System in the 2015 Post-Season?

In recent years, college football fans have been crying “foul” over the current BCS post-season system.  On Tuesday, January 10, 2012, NCAA conference commissioners will convene to discuss potential alternatives to the current BCS post-season system.  While it is unlikely that the commissioners will adopt a new post-season system on this date, it is likely that in the coming months, they will work towards approving a plus-one system for the post-season.

Essentially, a plus-one system amounts to a four-team playoff.  In a plus-one system, at the end of the season, the number-1 and number-4 BCS-ranked teams would face off against each other, while the number-2 and number-3 BCS-ranked teams would play each other.  The winners of each respective game would play in the BCS National Championship game.

So, why at this moment, may NCAA conference commissioners be inclined to adopt a plus-one system?  There are several reasons.

1.  Timing

Currently, the participants of the BCS National Championship game are those teams ranked number-1 and number-2 in the BCS system at the conclusion of the post-season.  The method under which the BCS currently operates its post-season is set to expire after the 2013 season.  Given that the date of expiration is quickly approaching, and television contracts must be negotiated, it is time for NCAA conference commissioners and the BCS to begin negotiating what format they wish to adopt next for the BCS post-season.

In 2008, SEC commissioner Mike Slive was a proponent of the plus-one system.  However, his support of the format largely fell on deaf ears.  However, given that the SEC has won the BCS National Championship game every season since 2006, Slive’s commissioner cohorts may be more willing to hear his idea out this go-around.  If a man whose conference has been largely successful under the current system is willing to revise the current format, it is likely that other conferences who have not achieved such post-season success should follow suit.

2.  Additional Support

As noted above, in 2008, Slive was hard-pressed to find support for his plus-one model, with only the ACC outwardly lending support.  However, it is likely that in 2012, he will be able to obtain the support of another football powerhouse conference:  the Big 12.

Chuck Neinas is currently serving as the interim director of the Big 12.  Neinas has publicly stated that he believes that the plus-one model should be revisited as a BCS post-season model.

Given the Big 12′s success on the gridiron, this stance should not come as a surprise to anyone.

Although SEC teams have won the BCS National Championship game every year since 2006, the Big 12 has sent teams to the BCS National Championship game twice in the last five years, and won the BCS National Championship game six years ago.  Additionally, if a plus-one system was in place during the past five years, it is possible that the Big 12 could have fielded even more teams to the BCS National Championship Game.  Such is arguably the case this season, when Oklahoma State only lost one game during the regular season and was otherwise recognized as being one of the top-performing teams in the country.

A plus-one system allows the top-four BCS-ranked teams to compete for a chance to earn their spot in the BCS National Championship Game.  Given the Big 12′s success on the football field in recent years, they will likely support the adoption of a plus-one model.

If the ACC retains its support of the system as it did in 2008, it is very possible that the three conference commissioners can sway the opinions of other commissioners and college football fans will see a plus-one system in place beginning with the 2014 season and 2015 postseason.

3.  Controversy

The current BCS system has been the subject of not only fan distaste, but also of deeper controversy including most recently, a Department of Justice investigation into whether the current system complies with antitrust laws, amongst other issues.

While it is legally debatable as to whether the current BCS postseason system violates antitrust law, adoption of a plus-one system would likely detract some attention from the Department of Justice and other legal opponents away from the BCS.

By adopting the plus-one system, the BCS could argue that they are truly giving each deserving team the opportunity to compete for the National Championship.  This in turn would diminish an antitrust argument.  Pursuing such action would arguably be in the best interest of the BCS and conference commissioners.

4.  Media

It is not hard to understand that more games equals more money in the hands of television networks.

College football fans have long been clamoring for modification of the current BCS postseason system.  Adoption of the plus-one system, albeit not a full-blown playoff system, would spark interest amongst those who have sought change in the BCS.  Additionally, the four-team playoff would present two more games before the BCS National Championship game, which media outlets could televise and sell advertising for.  All of these factors equal more dollars into the pockets of the network and more negotiation room for the conferences.

The Bottom Line

The January 10 meeting of NCAA commissioners to discuss concerns over the current post-season model is likely the first of many which will be held in the coming months.  Ultimately, the conference commissioners have heard many fans cry out for change.  While a playoff system would be an extreme remedy (although called for by many fans), the plus-one system presents a reasonable alternative with significant benefits.

WVU v. The Big East: Why The Big East Needs New Members Now

It’s been a rocky few days for the relationship between West Virginia University and the Big East.

On October 27, 2011, WVU was invited by the Big 12 to become a member of the conference. It accepted the Big 12′s invitationthe same day.

In recent months, the Big East has seen two of its member schools, Syracuse and Pittsburgh, defect for the ACC. Additionally, TCU, which was slated to join the conference beginning in 2012, opted out of that opportunity and instead chose to join the Big 12 next year.

The Big East has steadfastly maintained that it will hold Syracuse and Pittsburgh to its bylaws, which require that teams give 27-months’ notice of their intent to leave and pay a $5 million exit fee. Since TCU never joined the conference as a participating member, it was not held to the notice provision but was only required to pay the $5 million exit fee. A copy of the Big East’s bylaws is not publicly available.

Things only got more difficult for the Big East on October 31, 2011, when WVU filed a lawsuit against the conference in an attempt to free itself from the 27-month notice provision and join the Big 12 next season.

WVU’s lawsuit seeks a declaration of its rights and obligations under the Big East’s bylaws, asserts that the bylaws were breached and asks that the court prevent the Big East from holding WVU to the 27-month notice provision so that it can leave the conference next year.

Two factual scenarios make up the factual bulk of WVU’s claims against the Big East:

1. Since 2003, the Big East has consisted of 16 member schools, with 8 participating in football and 8 being considered “non-football” schools. In 2008, the Big East’s bylaws were amended. In the bylaws, “Football Action” is defined as “Any matter which relates specifically to any participation in NCAA Division I-A football by Division I-A schools.” Non-football schools are given an equal vote to the football schools on issues related to football. WVU alleged that, “The non-football schools repeatedly exerted their newfound level of increased governance at the expense and to the detriment of the football schools.”

2. The real crux of WVU’s lawsuit is that the exodus of schools from the conference has left the Big East unstable. As noted, WVU cites Pitt and Syracuse’s departures for the ACC, as well as TCU’s failure to show up for its first day at the conference, choosing instead to join the Big 12. The lawsuit also discusses the fact that UConn has publicly stated that it is pursuing opportunities with other conferences.

WVU uses the factual scenarios related to the departure of Big East member schools to allege that the Big East failed to proactively maintain a level of competition, the remaining six football schools and eight non-football schools creates an imbalance and disparity of power and the current state of the Big East means that it is expected to lose its BCS AQ status.

WVU’s concerns set out in its lawsuit are realistic.  Additionally, WVU was in a position to make these claims in an attempt to free itself of the 27-month notice provision because of the fact that the departure of Pitt, Syracuse and TCU arguably adversely impacted the state of the conference.  Because Pitt and Syracuse started the defection movement, such arguments are likely unreasonable for them to make.  Nonetheless, the merits of the lawsuit will be hashed out between lawyers and ultimately a judge in a courtroom.

In the meantime, though, what is the Big East to do?

The best thing the Big East can do, is to secure as new members football-participating members with proven records on the gridiron and located in strong media markets.  And now, more than ever, the Big East must do this fast.

By securing schools which will participate in football who have proven records of recent success on the football field as new members, the Big East will chip away at WVU’s claims and likely secure its participation in the conference for the next 27-months. This is because new football members will restore the balance of power between football and non-football schools, while securing well-performing football schools in strong media markets will likely help the Big East maintain its BCS AQ status.

The Big East will be a BCS conference through 2013.  After that, AQ status for all conferences will be redetermined for 2014-2017 and it is unclear the precise criteria that will be used.  However, team’s performances between 2010 through 2013 will be used. Likely, the BCS’s television contracts and the bowls themselves will drive the exact criteria used in selecting AQ conferences.

Thus, it’s in the Big East’s best interest to secure schools who have performed well in recent years and also attract media viewership.

Reportedly, the Big East is set to invite six schools to join the conference at a meeting which will be held today. Each of these schools would be a football participating member of the conference. The schools are: UCF, SMU, Houston, Air Force, Boise and Navy.

With respect to the performance data the BCS will rely upon to select 2014-2017′s AQ conferences, only 2010′s data is currently available. The following are rankings from the final 2010 BCS poll.

Team: Ranking

TCU: 3

Boise State:  10

West Virginia:  22

UCF:  25

Thus, in terms of maintaining AQ status for 2014-2017, TCU’s decision to join the Big 12 over the Big East was more detrimental than Syracuse and Pitt’s departures.  WVU can argue that the loss of the number-three ranked team unduly damaged the Big East’s chances of becoming an AQ conference in 2014-2017.  However, by securing two schools ranked in the top-25 during 2010, the Big East can mitigate that argument.

Therefore, long story short, the Big East needs schools with successful football teams to join its conference and it needs them to join fast.  Otherwise, WVU may be packing its bags as soon as next season. 

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.

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.

Antitrust Suit Will Not Bring Playoffs to College Football

I’ve posted a similar piece on this topic before, but I want to renew the debate now that Bill Hancock has agreed to meet with the Department of Justice.

If you’ve read my work, you probably know I like to play devil’s advocate on this topic. I believe an antitrust suit brought against the BCS has a slim chance of being successful and, more importantly, that even if it were successful, it would not result in a national championship playoff.

As you may have heard, BCS head Bill Hancock has agreed to a voluntary meeting with the Department of Justice. What does this mean? I saw one media member (whose work I greatly admire) say that it was the beginning of the end for the BCS. I couldn’t disagree more. I think it means nothing. I think it’s all for show.

The Department of Justice is getting involved because of political pressure. Now they need to make a show of investigating these perceived injustices. Does it mean they’ll bring a case? No. Does it mean they’d win a case if they brought one? No.

I can hear you already, “But, Kristi, the current system isn’t fair.” Therefore, it must violate antitrust law, right? Wrong. To understand, I need you to take off your fan hat and put on your CEO hat. College football is a business, like any other sport. It is run in a way that makes the most money for the people at the top. I have no idea why many fans think the sport’s power brokers – the top conference commissioners, TV partners, bowl officials - would voluntarily change to a system that would provide them with fewer benefits. They care about control and money, and they have both under the current system.

And here’s the key argument: The current system is better than the old system.

Would a playoff be better? Many think so, but that’s now how antitrust law works. The number-one issue I find with the analysis of many is the mistaken belief the court will compare the current system to a playoff system. Antitrust law will require the court to compare the current system to the old system.

The court will employ a “rule of reason” test. The court will look at why the current system was put into place, what the landscape was like before and after the current system was adopted, the effect of the current system, the history of college football post-season, and the reasons for adopting the system as-is.

Antitrust law is also applied less stringently in situations like this where the challenged conduct is necessary in order to produce the outcome. In other words, the a collaboration between conferences (here, in the form of the BCS) is necessary in order to produce a national championship game. Prior to the BCS, there were merely bowl games with traditional conference alignments and no matchup between the number one and two teams. Is it necessary to choose the number one and two teams the way they do? No, but that’s not really the issue at hand.

The issue is whether the collaboration that makes up the BCS is necessary and whether that collaboration has improved competition compared to past practices. I think it’s clear the BCS is an improvement over the old bowl system, particularly because of the access afforded non-AQ teams. Overall, the entire picture has improved: the number one and two teams as determined by an agreed upon formula meet each other to crown a champion, ratings and popularity are up, and access is improved for many.

In addition, Utah Attorney General Mark Shurtleff, who says he’ll be bringing a suit in the next two months, must show consumer harm. In other words, he must show that college football fans re somehow monetarily harmed by the current system. That’s going to be tough. As I said before, the court will look to how the consumer is affected under the current system compared to the old system – not compared to how they would benefit under a playoff system.  Most commentary discusses how non-AQ schools are harmed, but that won’t be the focus of a lawsuit. Antitrust law first and foremost seeks to protect the consumer.

Speaking of the schools involved, there are some wrinkles even if a court were to focus on the ways in which they are harmed. Some judicial circuits have their own tests and case law that would affect the outcome differently depending on where a suit was filed.

For example, the Ninth Circuit has a “but for” test which bars the plaintiff (let’s pretend it was a non-AQ school here) from recovery if the conspiracy would not have occured, but for the plaintiff’s participation. The non-AQ schools, through their conferences, agreed to the BCS system and willingly continue to participte in it, which would be a problem under this test. The test goes on to look at the degree of participation of the plaintiff versus any defendant, but that analysis is too long to go into here.

Another point I want to address is a comment from Utah’s Attorney General that illustrates another mistaken belief by some. Shurtleff says his suit will, “ask the judge to order some way to fix it. It’s not my call on how to fix it, but I think clearly (it would be) to go to a playoff and eliminate the BCS.” The only problem is that’s not how antitrust cases work.

A judge cannot order college football to institute a playoff. A judge can award treble (or triple) damages and can even issue an injunction, forcing a new system to be adopted, but a judge cannot dictate what that system will be. Although a judge could say in dicta (sort of like a side note in a ruling that doesn’t carry any actual legal weight) what sort of system would be allowable under antitrust law, the judge cannot order what system will be put in place.

Even without the judge ordering a playoff, many assume this would be the outcome if the current system was found to be in violation of antitrust law. However, the powers that be could just as easily allow a return to the old bowl tie-in system. Yes, I know they would make more money with a playoff, but it’s not always about money. In this case, it would be about control. The guys at the top are not going to give up control of post-season college football just because a few extra bucks could be made with a playoff system.

Andy Staples does a great job of describing how a return to the old system might work out in this piece for Sports Illustrated. One important thing to note in his piece is the effect on not only the non-AQs, but also the ACC and Big East. This illustrates how high risk an antitrust suit could be for many schools, not to mention the extreme expense of litigating a suit of this nature. He also goes into how the have-nots could gain superior voting power in he BCS under a return to this system, but that includes a lot of what-ifs and is beyond the scope of what I want to cover here.

Please note that I have barely skimmed the surface here in terms of antitrust arguments that could be made. Not only are there vast intricacies of the law, but some judicial circuits have their own tests that have been adopted and their own unique case law that might affect the outcome of the case. It would take an entire law review article to analyze an antitrust suit of this magnitude from every angle.

Despite all I have said here, I think one can make a case on the other side as well. I just see that side well-represented in the media, so I wanted to give this angle some attention and try and give the casual fan a glimpse into why it’s not an open and shut case for those opposing the BCS.

For more on this, check out Skip Oliva’s piece The Antitrust Playoffs Have Begun.

This article offers the personal observations of Kristi Dosh, and does not represent the views of her law firm or its clients.  Any information contained herein does not constitute legal advice. Consult your own attorney for legal advice on these matters.

Why an Antitrust Suit is Unlikely to Bring Playoffs to College Football

Twice last week on Twitter I asked if you were tired of hearing about antitrust suits because I was considering writing a piece about why one brought against the BCS wouldn’t result in a playoff for college football. Despite hearing the word “antitrust” for months in conjuntion with the NFL, the unanimous response was that you wanted to hear more if it concerned what a suit would mean to college football as we know it.

If you’ve read my work, you probably know I like to play devil’s advocate on this topic. I believe an antitrust suit brought against the BCS has a slim chance of being successful and, more importantly, that even if it were successful, it would not result in a national championship playoff.

I can hear you already, “But, Kristi, the current system isn’t fair.” Therefore, it must violate antitrust law, right? Wrong. To understand, I need you to take off your fan hat and put on your CEO hat. College football is a business, like any other sport. It is run in a way that makes the most money for the people at the top. I have no idea why many fans think the sport’s power brokers – the top conference commissioners, TV partners, bowl officials - would voluntarily change to a system that would provide them with fewer benefits. They care about control and money, and they have both under the current system.

And here’s the key argument: Read the rest of this entry

How Much Did the BCS Top 25 Spend on Recruiting?

As I continue to write about the financial aspect of college athletics, I find myself wondering about things like how much money plays a role in winning. Is there one place where you can spend more money and increase your odds of competing for a championship? Or is the Athletic Director more of a conductor choosing which instruments to highlight and when in order to produce the best sounding symphony?

I thought it would be interesting to see how much spending on recruiting plays a role in football success. The numbers reflect recruiting expenses for the 2009-2010 school year.

One thing to note is that recruiting dollars are not broken down by sport, so the numbers you see below reflect the total amount spent on recruiting for all male athletes. Since football has the largest recruiting class and we can safely presume most schools spend the majority of their recruiting dollars on football, I think the numbers still paint an interesting picture.

Below you will see recruiting dollars spent during the 2009-2010 school year for each school in the 2010 BCS final standings, when presumably the athletes recruited with 2009-2010 dollars were then members of the team:

  School Recruiting Expenses % of Total Expenses
1 Auburn $1,129,984.00 1.24%
2 Oregon $844,235.00 1.29%
3 TCU $438,422.00 0.84%
4 Stanford $754,689.00 0.92%
5 Wisconsin $473,897.00 0.53%
6 Ohio State $676,966.00 0.65%
7 Oklahoma $1,010,570.00 1.14%
8 Arkansas $1,187,216.00 1.65%
9 Michigan State $677,958.00 1.10%
10 Boise State $158,355.00 0.63%
11 LSU $741,762.00 0.73%
12 Missouri $596,738.00 1.12%
13 Virginia Tech $625,207.00 1.24%
14 Oklahoma State $414,655.00 0.69%
15 Nevada $216,920.00 1.00%
16 Alabama $1,257,128.00 1.47%
17 Texas A&M $532,641.00 0.77%
18 Nebraksa $685,361.00 1.00%
19 Utah $466,532.00 1.46%
20 South Carolina $565,967.00 0.72%
21 Mississippi State $416,333.00 1.15%
22 West Virginia  $669,844.00 1.18%
23 Florida State $581,923.00 0.77%
24 Hawaii $272,078.00 0.93%
25 UCF $354,264.00 0.99%
       
  Averages $629,985.80 1.01%

Boise State is spending the paltry sum of $158,355, which is just 25% of the average. Only 26 of the 115 on the Broncos 2010 roster hailed from Idaho, with a huge percentage coming from as far away as California and Texas. Impressive that Boise State recruits so well on such a limited budget.

As an interesting side note, Boise State spends nearly as much on female recruiting as male, with female recruiting costs coming in at $123,287. That’s 44% of the total recruiting expenditures. Compare that to the leader for male recruiting expenses on this chart, Alabama, who only spends 26% of their recruiting expenditures on female recruiting. To complete the data needed for comparison, Alabama has 10 women’s teams and Boise State has 9 (with all track-related sports combined into one in each total).

The other thing that stood out to me was that Utah spent above average in terms of the percent of their total expenses advanced towards recruiting. In fact, they rank fourth overall in terms of percentage of total expenses spent on male recruiting. I was also surprised to see Ohio State and Michigan State from the Big Ten spending so much less than Alabama, Arkansas and Auburn from the SEC. The latter three make up the top three spenders overall on the list. Did this help them in their quest to move from a non-AQ conference to an AQ conference?

What surprised you from this list? If your school is on this list, how do you feel about what’s being spent on recruiting?