Category Archives: Big East
By: Hunter Mundy
The Connecticut Huskies will be hosting the Michigan Wolverines football team on September 21, 2013. For UConn, this may be the biggest home game ever scheduled. The game will take place at the Huskies’ Rentaschler Field, which has a normal capacity of 40,000 fans. This will be the second game in the contracted series between the two teams. The first game, a 2010 Wolverine victory of 30-10, was held before of a crowd of 113,090 at Michigan Stadium.
Connecticut normally allots 3,000 tickets to visiting opponents, but the contract with Michigan requires UConn to reserve 5,000 tickets for the Wolverines. In order to keep the same amount of season ticket opportunities, UCONN plans to add 2,000 temporary seats to the stadium’s capacity. While the Huskies have had numerous games in past years where crowds reached the 40,000 capacity, the additional seats, along with this game’s high demand for tickets, are sure to set a new record for football attendance.
In 2009, UConn’s average attendance was 38,229, and in 2012 the average number of spectators at Connecticut’s six home games was 34,672. Over four years, the ticket demand for Huskies football tickets has decreased by approximately 3 percent. Not taking into account required donations during the 2009-2011 cycle, tickets ranged from $150 for reserved seats to $210 for mezzanine chairs for a six-game home schedule. For 2013, which has a seven-game home schedule featuring the Wolverines, season ticket prices range from $175 for reserved seats to $280 for mezzanine chairs. UCONN/Michigan game attendees (outside of those purchased through the Wolverines allotment) will be required to purchase season tickets through the Huskies Athletic Ticket Office.
Some may ask why Michigan would not renegotiate or buy their way out of this contract in order to allow for an extra home game and the additional revenue that would generate. Dave Brandon, Michigan athletic director, stated to CBS Sports that even though he could have broken the deal, he opted not to because, “it would screw up [UConn’s] schedule” and force Michigan to “run around trying to find another game.” While cancelling this game would have led to scheduling difficulties for both groups, allowing this game to take place is truly a win-win for both institutions.
Michigan’s allotted 5,000 seats for this game does not nearly meet the expected ticket demand of Wolverine fans. With UConn located in one of the most populated areas of the United States, Michigan alumni are plentiful. For instance, the University of Michigan Alumni Club of New York, based in New York City, has over 13,000 members. Additionally, there are at least eight UM alumni clubs within a three-hour drive of UConn’s Rentaschler Field. UM Alumni Club members typically have the opportunity to purchase tickets for most home and away Michigan football games. However, it is the norm for these benefits to exclude rivalry games with Notre Dame and Ohio State as well as other games with traditional high-ticket demand.
As an example of the excitement and limited supply of tickets in the marketplace, the UConn game has also been added to the excluded list of games available directly to UM alumni club members. Look for UM fans throughout the region to either increase their UM athletic club donations and/or purchase UConn season football tickets in an effort to see their beloved Wolverines live and in person.
The 2013 season will be Connecticut’s first year in the newly named and configured American Athletic Conference. Having a home opponent on the schedule such as Michigan could not come at a better time. With losing former Big East rivals West Virginia, Syracuse and Pittsburgh from the Huskies schedule, the Wolverines visit to Rentaschler Field will give the university and its football program a spark and a chance to shine on the national stage.
Many college programs choose to schedule traditional powers in order invigorate their home schedules and grow their program’s budgets. For instance, UConn’s rival Rutgers hosts the SEC’s Arkansas Razorbacks on the same day the Wolverines visit the Huskies.
In 2010, Duke University hosted the Alabama Crimson Tide, which set a modern day attendance record at the Blue Devils’ Wallace Wade Stadium (35,237). The #1 Crimson Tide routed Duke 62-13 in front of what ESPN dubbed “a crimson coated stadium named for a former Alabama coach.” Duke also used temporary stadium seating to accommodate the extra Alabama fans for this big contract game.
Additionally, Michigan State, along with Central Michigan, Eastern Michigan and Western Michigan are a part of an agreement known as “Celebrate the State.” This contract contains 12 games from 2011 to 2020 with Michigan State facing each team four times during the period. One game of each these four game series will be played on the home field of Central Michigan, Eastern Michigan and Western Michigan. In 2012, Michigan State visited Central Michigan and won 41-7. This game set an attendance record for Kelly/Shorts Stadium of 35,127 spectators with plenty of green-clad Spartans fans in attendance. Johnny Adams, Michigan State’s cornerback, stated to ESPN, “It was a little different, a smaller environment; but at the end of the day it’s all football. It’s good for the fans and it’s good for Central to bring the fans out here and put on a great show.”
By: Alexandria Jenkins
An entire nation was left shocked and speechless when news of the Jerry Sandusky sex-abuse scandal surfaced in November 2011. The Penn State community fell victim to the horrifying betrayal of its former defensive coordinator and was forced to sit by idly as the effects of the crime rippled through “Happy Valley.” For university officials, students, fans and alumni alike, nothing could have proven more sickening than the life-long damage inflicted on Sandusky’s victims.
Then, as if to rub salt in the wound, the NCAA imposed an unprecedented $60 million, five-year fine and four-year postseason ban on the Nittany Lions. Additionally, numerous sponsors cut ties with the university, with along with other costs associated with the scandal brought the school’s total estimated losses attributed to the scandal to $46 million and counting over the past 17 months, according to an article posted by Advertising Age.
Since Dec. 31, 2012, Penn State says it has spent more than $41 million on NCAA fines, legal and consulting fees. Advertising Age added that the university has lost more than $1 million in sponsorship/advertising after companies like General Motors, Cars.com and Sherwin Williams pulled their support for the football team, while forfeiting another $700,000 in licensing royalties from merchandise sales. Furthermore, This month, Penn State will shell out $3.25 million to the Big Ten Conference to be donated to children’s charities as part of the first installment of a four-year, $13 million penalty, according to Scott Chipman, the Conference’s Assistant Commissioner.
Now, six months removed from Sandusky’s trial, Penn State is finally starting its uphill battle towards financial recovery. After pulling its ads in late 2011 “out of respect for those involved,” Cars.com returned to football telecasts last season and has announced plans of staying on for 2013-2014. There is also hope of potential sponsorships with Chevy and State Farm, although no deals have been finalized.
The shamed Penn State brand is also showing signs of recovery. According to Marketing Arm, Penn State ranked in the top five most-trusted NCAA properties in June 2011. By January 2012, the university had fallen to last place among 104 nationally measured schools. It bounced back to the mid-60s in 2012, now ranking among well-respected schools like Stanford, Michigan and Harvard.
Despite all of this, Cynthia Hall, Penn State’s acting Chief Marketing and Communications Officer, said that the university did not increase its overall marketing budget since the scandal occurred.
The Mountain West appears to have won a large victory with the recent additions (or not losses if that’s how you choose to look at it) of Boise State and San Diego State. That may in fact be the case. However, there is also the possibility that in its quest for stabilization and increased stature, the Mountain West endangered itself by giving away crucial member equality in order to re-acquire Boise State.
Reports indicate the Mountain West has or will (among other things): 1) re-negotiate its television contract with CBS Sports Network which will allow teams on national television (i.e. Boise State) to make more money through bonuses, 2) sell Boise State’s home games in a separate package, and 3) allocate half of BCS (and future equivalent) bowl game revenue to the participating team (i.e. Boise State) before splitting it among the remaining conference members.
From the quotes of Big East commissioner Mike Aresco, it sounds as if Boise State wanted to stay in the Big East if it would match the Mountain West’s offer. Smartly, Mr. Aresco and the remaining Big East schools’ (bonus points if you can name them) presidents said thanks, but no thanks. In a time when it must feel like everything is crashing down around them, the Big East brass found a line they wouldn’t cross. Good for them. Let’s face it, Boise State to the Big East wasn’t exactly the perfect mix of chocolate and peanut butter. So for the Big East to grant unprecedented perks to a school 2,600 miles removed from the conference office didn’t make a whole lot of sense. Navy Athletic Director Chet Gladchuck even went public with his disdain for the proposed deal, saying:
“What Boise State wanted was outrageous and unprecedented. It was not palatable to any of the other Big East institutions,” Gladchuk said. “In the final analysis, Boise wasn’t worth it. There is zero television interest in Boise along the Eastern seaboard. What it tells me is the Mountain West was desperate. Clearly, the Mountain West was willing to make whatever concessions necessary to keep Boise in the fold.”
But surely it made sense for the Mountain West to do whatever was necessary to bring Boise State back under its tent, right? Maybe, maybe not. The money grab that is conference realignment also has an undercurrent of trying to create and/or maintain stability and long-term viability. As mentioned earlier, the Mountain West seems to have stabilized at 12 members. But when gross member inequality is part of a league’s structure, there can be problems.
Example: When the Big 12 was formed in the mid-90s, its structure was similar to how the Mountain West is currently proceeding. Most notably, it did not share bowl and television revenue monies equally among the members. Rather, the participating teams were first entitled to a larger share. This obviously funneled most of the revenue toward the traditionally successful programs, and smaller amounts to everyone else. (Berry Tramel of The Oklahoman wrote about this structure in 2010.) As time passed the Big 12 and its membership experienced the difficulties of operating a conference successfully when there’s a sense that a few schools are driving the bus and collecting the checks, and the rest are just passengers along for the ride. Ultimately, that and other issues led to the departure of 1/3rd of the Big 12’s schools (Nebraska, Colorado, Missouri, Texas A&M), and a near collapse of the conference entirely.
Whether the Big 12 leadership decided the original structure was a mistake, or that times had changed and therefore the structure needed to change with it, the powers that be agreed to a more (though not completely) equal distribution of revenue in the summer of 2011. It also put a stake in the ground on stability by having each member grant its television rights to the conference for a long period of time (initially six years, but recently extended to 13), essentially removing the largest incentive to other conferences who may wish to come poaching in the future (the importance of this “grant of rights” was well articulated by Mat Winter in a BusinessofCollegeSports.com post last month). I have not read or heard anything along the lines of Boise State or the other Mountain West schools making similar commitments.
So while the Big 12 (barely) escaped the inequality trap and the Big East has avoided it for now, the Mountain West may have fallen right in it. Sure, Utah State and San Jose State are excited to be new members in a league which just got considerably stronger. And the other Mountain West schools no doubt see the tremendous value Boise State brings to all of them. But give those non-Boise State presidents and athletic directors a few years of conference meetings looking over financials, and watching the revenue flow into the conference and out to Boise State. Give them a few years of conference meetings observing how decisions are made.
The camaraderie that exists today may not continue very long. And without a grant-of-rights or similar level of commitment, Boise State is for all intents and purposes a perpetual free agent, available to accept the next best conference offer that comes along. The Mountain West’s current and future members no doubt wanted to make decisions which ensured stability over the long-term. And while the league certainly got immediately stronger with the addition of Boise State, it may be that the deal they made guarantees the long-term will be anything but stable.
Follow Daniel on Twitter: @DanielHare
A number of Division I conferences have recently increased the fees a member school must pay when it withdraws from the conference. These fees are commonly referred to as exit fees. The ACC is one of the conferences that recently increased its exit fees. And its exit fee provision has been receiving a lot of attention lately because of Maryland’s departure to the Big Ten.
The ACC actually increased its exit fees twice in the span of a year. The ACC first upped the fees from around $12-14 million to $20 million in September 2011 when it announced it would add Syracuse and Pittsburgh. The fees were then upped again this September after the conference added Notre Dame (in all sports except football and hockeyl).
The ACC’s current exit fee calls for a withdrawing member to pay an amount equal to three times the conference’s total operating budget at the time of withdrawal. Based on the ACC’s 2012-13 operating budget, this equates to an exit fee of more than $52 million. It is this amount that the ACC is seeking in its lawsuit against Maryland for the school’s move to the Big Ten.
When the ACC and other conferences increase their exit fees, the general thinking is that it further discourages members from leaving the conference. But, because of how courts analyze the legality of these exit fee provisions, increasing the amount of the fee can actually increase the chances of the exit fee provision being deemed unenforceable. So, instead of discouraging schools from leaving, it can actually embolden them to do so.
In legal terms, conference exit fees are known as liquidated damages. Liquidated damages provisions are commonly added to contracts. They set the amount a party to the contract must pay in the event it breaches the contract. Liquidated damages provisions are useful because they theoretically save the parties the time and expense of litigating the amount of damages caused by the breach.
But, the amount of liquidated damages specified in a contract cannot be randomly selected. Courts will generally only enforce liquidated damages provisions if (1) the anticipated damages in the event of a breach are difficult to ascertain at the time of contracting, and (2) the amount of liquidated damages is a reasonable estimate of the actual damages that would likely be caused by a breach. If a liquidated damages provision does not meet this test it is deemed a penalty and is unenforceable.
Assuming that the ACC’s liquidated damages provision fulfills the first element of the test, it is questionable whether it would meet the second element. The requirement to pay three times the conference’s operating budget does not appear to be related in any way to the actual amount of damages the ACC would suffer if a member withdraws. It just seems like an easy way to ensure that the exit fee continues to grow without having to continually vote on it. This makes it look like a penalty.
And the actual number that results from this provision, $52 million, is not a reasonable estimate of the ACC’s actual damages. For example, Maryland’s departure will not result in the ACC’s tv deal being reduced by $52 million. A good argument can be made that the ACC actually suffered no damage when Maryland left. Maryland’s departure allowed the conference to add Louisville. And the general consensus is that the ACC is now stronger athletically as a result (at least in the two sports that matter for tv revenue purposes, football and men’s basketball).
This is consistent with recent realignment history. Over the past two years the Big 12 lost Nebraska, Colorado, Texas A&M, and Missouri. Yet, after adding TCU and West Virginina, the Big 12 signed the most lucrative tv deal in the conference’s history this year. (The one exception to the no damage upon withdrawal argument would be the Big East. The defections in that conference have definitely hurt the value of its tv rights).
When a liquidated damages provision is determined to be invalid, the party attempting to enforce the provision is allowed to instead seek its actual damages from the breaching party. But, as discussed above, conferences often suffer minimal damage when a member withdraws, either because the member added little value to the conference or because the conference quickly replaces it with a new member of equal value (at least in tv executives’ eyes).
As a result, exit fees often leave conferences in a tough position. They have to be high enough to discourage a member from leaving the conference. But, if they are too high they could be declared an invalid penalty. And, if the exit fees are invalid, the conference would then have to prove its actual damages, which are usually much less than the amount of the exit fee. As a result, exit fee disputes have always settled without a court deciding the validity of the liquidated damages provision. Recent examples include the Big 12 settling with Nebraska, Colorado, Texas A&M, and Missouri for less than the mandated amount of exit fees.
So, what is the solution to the problems with exit fees? Grants of television broadcast rights. In these agreements, all of the conference members grant their television broadcast rights to their athletic contests to the conference for a certain period of time. If a member leaves the conference during that time, the conference retains the member’s television rights. Because the value of a school to a conference is the television revenue it can help generate, a grant of rights agreement makes the members essentially worthless to another conference that is looking for new members.
While grant of rights agreements do have potential issues (sovereign immunity issues being the biggest), they are not subject to a subjective test like liquidated damages provisions. Thus, they are much more likely to hold up in court as valid contracts.
Currently, only the members of the Big Ten, the Pac-12, and the Big 12 have executed grant of rights agreements. Other conferences that want to ensure stable membership would be wise to insist on their members signing similar agreements. (Yes, even the mighty SEC should have its members sign grants of rights). If the ACC had one in place, Maryland likely would not be joining the Big Ten.
Today’s news that Notre Dame is leaving the Big East for the ACC surprised many. Similar to its arrangement with the Big East, all of Notre Dame’s sports will compete in the ACC, save for its football program which will remain independent. The one difference from its membership in the Big East, though, is that Notre Dame football will be able to compete in the ACC’s non-BCS bowl games. Given that the Big East is the only conference of the six BCS AQ conferences that does not have a bowl set aside for its conference champions, this is a significant perk for Notre Dame. This perk, along with Notre Dame’s financials depict why the school’s transition from the Big East to the ACC is a logical move.
After months of watching the conference realignment carousel turn, there is no question that finances drive schools from one conference to another. There are several components to the finance issue at play when a school chooses to switch conferences. First, is how much money the school can bring in from the respective conference. Second, is how the respective school’s athletic department’s finances stack up against other athletic departments in the conference.
Notre Dame will undoubtedly reap more revenue from ACC membership than it does from its current Big East membership. The timing of Notre Dame’s decision is arguably not coincidental: Its current conference is in the midst of a 60-day exclusive TV rights negotiation process with ESPN. The outcome of those negotiations will shape how lucrative of a new television deal the Big East obtains. Given that Big East basketball powerhouses Syracuse and Pitt recently defected the conference for the ACC, the conference’s bargaining power has arguably decreased. Take away Notre Dame on top of that, and the Big East’s bargaining power has dramatically shifted. In contrast, Notre Dame is joining a conference which in May, negotiated a $3.6 billion year television rights contract through 2026-27. Prior to Notre Dame’s addition, it was expected that ACC members would capture $17.1 million per year from the television contract. The addition of Notre Dame, however, will likely increase that figure. It is likely that the recent television contract contains a term allowing it to be modified upon the addition of a new conference member. Given Notre Dame’s national popularity, this will likely drive the price of the contract up, and as such, put more money in each ACC school’s pocket. The realization that it will earn more per year in television revenue as an ACC member than as a Big East member was likely a driving factor in Notre Dame’s decision to move conferences.
As noted above, an athletic department’s financial health is another factor schools take into consideration when moving conferences. A school must be able to expend and bring in a similar amount of revenue as its competitors in order to remain competitive. In terms of the ACC, Notre Dame is on similar footing to its competitors. According to data submitted to the Department of Education, in 2010-11, Notre Dame had the sixth-highest net income of all Division I athletic departments. That same year, the ACC school with the highest net income was Virginia, whose net income was just over $13 million less than Notre Dame’s. The control of its budget puts Notre Dame on strong footing as it enters the ACC.
Similarly, Notre Dame’s spending is comparable to ACC members’ spending. Per data submitted to the Department of Education, in 2010-11, Florida State’s athletic department spent the most of any ACC institution at $86,946,503.00. While Notre Dame’s expenditures were more than $11 million less than that, the athletic department’s $75,360,209.00 worth of expenses were still sizable. In fact, Florida State was the only ACC institution that out-spent Notre Dame in 2010-11.
Overall, entering the ACC is a victory for Notre Dame. First and foremost, it achieved a coup by keeping its independent status in football. Secondly, it gained access to greater TV revenues by partnering with a conference that is home to a more lucrative television rights deal. Finally, Notre Dame will be on more equal financial footing with its ACC competitors than it was with other Big East members.
Today in the United States District Court for the District of Columbia, the Big East filed a lawsuit against TCU. The lawsuit alleges a cause of action for breach of contract based upon TCU’s decision to not join the Big East, as it agreed to in 2010, and rather, move to the Big 12 by way of the Mountain West Conference.
The brief lawsuit filed by the Big East (the pleading is only six-pages long) notes that on November 29, 2010, the Big East and TCU entered into a membership expansion agreement, whereby TCU was invited to become a full-conference Big East member with all fourteen of its sports beginning on July 1, 2012. According to the Big East, per the membership expansion agreement, the parties agreed that if TCU did not join the conference on July 1, 2012, the Big East would be damaged. According to the pleadings, the parties could not specify the exact amount by which the Big East would be damaged if TCU did not join the conference. However, in the membership expansion agreement, the parties apparently agreed that the Big East would be damaged by a reasonable estimate of $5 million if TCU did not join the conference on July 1, 2012. Additionally, the Big East claims that in the membership expansion agreement, TCU agreed to pay the Big East this estimated damage amount of $5 million if it failed to join the conference by July 1, 2012.
In the complaint, the Big East alleges that on October 6, 2011, TCU “reneged” on the membership expansion agreement by announcing that it would instead join the Big 12 Conference on July 1, 2012. Subsequent to this announcement, the Big East asked TCU to pay it the $5 million estimated damages amount per the membership expansion agreement. According to the Big East’s lawsuit, “. . . TCU has refused to make that payment or acknowledge its obligation to do so.” As such, the Big East alleges that TCU has breached the membership expansion agreement and the Big East is seeking monetary damages in the amount of $5 million, attorney’s fees, costs and other relief as the court deems appropriate.
It is to be seen whether the Big East’s lawsuit will stand up in court. However, from the outset, there appears to be several issues with it. First, TCU will likely argue that a claim is not ripe at this point. In the legal world, a case must be “ripe” in order for a court to hear it, meaning that an actual controversy exists. Here, it is arguable that this case is not ripe, as it was filed on June 11, 2012–which is before TCU was set to join the Big East and before it joined the Big 12. Thus, albeit unlikely, TCU could still join the Big East, which would mean that it did not breach its contract with the Big East. As such, TCU will likely argue that this lawsuit should be dismissed because it is not ripe.
The Big East has plausible arguments against the dismissal of the case for ripeness. The Big East can argue that TCU’s actions, such as announcing its intention to join the Big 12 and its athletic director’s acknowledgement that TCU would have to pay the Big East a sum of money for not joining the conference, constitute an anticipatory breach of contract. While the breach of contract technically has not occurred, since July 1, 2012 has not passed, the Big East can nonetheless assert that it believes TCU will fail to perform its part of the contract. Under the legal theory of anticipatory breach, the Big East can terminate the contract and sue TCU for damages. This would counteract TCU’s ripeness argument.
The other glaring issue with the Big East’s lawsuit is its calculation of damages. In the lawsuit, the Big East first noted that both parties “. . . acknowledged and agreed that. . . damages would be difficult to determine if TCU did not follow through on its agreement to join the Big East on the Effective Date. . . “ Damages based upon an event that may occur in the future which are “difficult to determine” are called “speculative damages.” TCU will likely argue that the damages are speculative, because in contract cases like the one at hand here, speculative damages cannot be recovered by a plaintiff. However, one exception to this rule exists. That exception provides that plaintiffs can recover damages up to an amount that is reasonably likely to occur if the occurrence causing the speculative damages is reasonably likely to occur. In this instance, because it appears that the parties agreed upon the $5 million damage amount in the agreement, it is arguable that the reason causing the speculative damages (i.e. TCU not joining the Big East) was reasonably likely to occur and that $5 million was the amount by which the Big East would be reasonably damaged. Given this, it appears that the Big East can also successfully argue against a defense raised by TCU that the $5 million prayer for relief amounts to speculative damages.
Overall, it is likely that a jury will find in favor of the Big East. However, the question remains as to whether a jury will award the full $5 million in damages the Big East has requested. This lawsuit should serve as guidance for other universities testing the conference realignment waters. Universities seeking to move to a new conference should fully investigate their options, so they do no agree to join one conference only to join another and face the risk of a lawsuit later.
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.
|1998-99||Tennessee||FSU||Kansas State||Ohio State|
|2005-06||USC||Texas||Penn State||Ohio State|
|2007-08||Ohio State||LSU||VA Tech||Oklahoma|
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.
In the last five years, Boston College has secured its spot as home of one of the most dominant Division I hockey programs. In the last five years, the Eagles have won the Division I hockey championship three times. Their most recent win came last weekend, when Boston College defeated Ferris State 4-1.
How has this surge in the hockey team’s prowess benefited fundraising for development? Steve Novak is Boston College’s Assistant Athletics Director for Athletic Development. When asked whether the recent Division I hockey championship would boost donations, Novak provided the following insight:
“Our hockey program has achieved such heights over the years that one year or one championship does not necessarily influence overall giving in a noticeable way. However, I can certainly attest to the fact that the consistent performance and leadership under Jerry York has influenced any number of donors and/or gifts to BC Athletics. We have seen several gifts directed to hockey over the years to support scholarships or other expenses. Often, these donors cite the great pride they have when they root for BC Hockey.”
In an age in which football and basketball dominate the college athletics headlines–two sports which are present on Boston College’s campus–it speaks loudly to the talent of Boston College’s hockey team that a number of donors specifically direct funds to the hockey team’s development.
Given the hockey team’s frequent presence in the Frozen Four and national championship game in recent years, the question arises as to whether Boston College capitalizes upon the appearances as opportunities to fundraise. Novak indicated that Boston College, “do[es] a lot of stewardship around special events like Frozen Fours or bowl games. We have not chosen to do specific fundraisers. It is more of an opportunity to say ‘thank you’ to those who helped us get to this point through their ongoing and past support.”
Along with funding scholarships for student-athletes, Novak and members of his athletics development staff fundraise to build new facilities or improve existing facilities. In 2007, Boston College opened the doors to the $27 million Yawkey Athletics Center. According to Novak, “This was the first building on campus to be 100% privately funded.” Going forward, Boston College will break ground soon on a baseball and softball complex on its Brighton Campus. Additionally, according to Novak, the athletics department “. . . also make[s] several facility improvements each year throughout our athletics facilities. These otherwise ‘small’ items add up to be significant expenses. However, it is extremely important to put our best foot forward. The aesthetic improvement over the last several years is noticeable. Athletics is certainly not the most important aspect of the University, but it often is the most visible.”
The success of its hockey team and the work of its athletics department and development staff in recent years gives Boston College fans much to cheer about.
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
|Penn State||$31,619,687.00||Big Ten|
|Kansas State||$23,395,408.00||Big 12|
|Notre Dame||$19,147,710.00||Big East|
|Ohio State||$18,630,964.00||Big Ten|
|Oklahoma State||$14,365,376.00||Big 12|
|Michigan State||$13,512,269.00||Big Ten|
|Texas A&M||$3,224,429.00||Big 12|
|Texas Tech||$3,124,246.00||Big 12|
|North Carolina State||$192,151.00||ACC|
|Iowa State||$121,686.00||Big 12|
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|
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|
|Ohio State||$113,184,855.00||Big Ten|
|Penn State||$84,498,339.00||Big Ten|
|Notre Dame||$75,360,209.00||Big East|
|Texas A&M||$71,719,872.00||Big 12|
|Michigan State||$67,450,913.00||Big Ten|
|Oklahoma State||$55,757,830.00||Big 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|