Category Archives: Conference USA

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

Guest Author: Chadd Scott of ChuckOliver.net

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

Memphis to the Big East: A Good Fit?

Today, the University of Memphis is expected to announce that it is leaving Conference USA for the Big East beginning in 2013.  For some time, there has been discussion that the Big East should add Memphis to the conference, especially with the upcoming departure of Syracuse and Pittsburgh to the ACC.  Even legendary Louisville basketball coach, Rick Pitino, called for the conference to add Memphis to its stable of schools.  With Memphis set to announce its departure to the Big East today, is the pairing a good fit?

Basketball

One thing is certain:  The Big East is known for its basketball talent.  Last year’s NCAA Division I Basketball National Champion–UConn–hails from the Big East and the Big East Tournament held every year at Madison Square Garden is a favorite amongst basketball fans.

Memphis will arguably be set to compete with the Big East in terms of basketball.  The Tigers boast a 1,406-820-1 all-time win/loss record.  In 2008, the school was runner-up in the NCAA Division I Basketball National Championship game.  Since 2003, Memphis has made the NCAA tournament an impressive seven times.  The Tigers will likely make another run this March.

Facilities

While the Big East is known for its basketball talent, it is also known for the spectacular facilities its teams get to play their basketball games in.  Many basketball fans argue that the Big East tournament is one of the best each season, if only for the fact that it is played in Madison Square Garden.

Like St. John’s, which plays its home games at Madison Square Garden, Memphis also has an impressive basketball facility.  The Tigers basketball teams call the 18,119 seat FedExForum home.  The $250,000.00 million dollar state-of-the-art facility is also home to Memphis’ NBA team, the Grizzlies.  The facility boasts an impressive five levels and over 100 concession stands.  Built seven years ago, the FedExForum also has a 22×38 square foot scoreboard, which according to the FedExForum, is one of the largest in the nation.

Memphis also has a decent football facility in the Liberty Bowl Memorial Stadium.  The 61,000 seat stadium underwent $19.5 million in renovations in 1987.  Telling by its name, it is also home to the Liberty Bowl game.

Given that Memphis has invested in its facilities, it is certain that other Big East teams and their fans will enjoy traveling to Memphis to watch their teams compete.

Finances

While Memphis’ facilities are certainly impressive, certain financial factors lead to questions as to whether the Tigers will be competitive in the Big East.

According to data obtained from the Department of Education, in both 2009-10 and 2010-11, neither the Memphis Football nor Men’s Basketball teams turned a profit.  In 2009-10, Memphis Football had expenses and revenues of $11,557,329.00, for a profit of $0.00.  In 2010-11, Memphis Football had lower expenses and revenues than those of 2009-10, at $8,609,503.00, for a profit of $0.00.  In 2009-10, Memphis Men’s Basketball had expenses and revenues of $6,113,027, for a profit of $0.00.  In 2010-11, Memphis Men’s Basketball had expenses and revenues of $6,739,131.00, for a profit of $0.00.

A profit of $0.00 is not necessarily a negative factor.  In 2010-11, Big East competitor Louisville turned a $27,551,289.00 profit with its men’s basketball team.  However, that same year, the UConn basketball team–which won the NCAA Division I National Championship–suffered losses of $417,181.00.  Thus, there clearly is a large range between the profits and losses incurred by Big East teams in a given year.  Arguably, as long as Memphis stays out of the red, it should be able to compete financially with other Big East members.

In terms of recruiting expenses, in 2010-11, Memphis ranked 40th in the NCAA, spending a total of $961,150.00 on recruiting for all of its teams and $759,844.00 for its men’s teams.  While ranking 40th in all of the NCAA is arguably an impressive feat, Memphis will likely have to increase its recruiting budget to keep up with those of its new Big East peers.

In 2010-11, the following Big East schools ranked and spent as follows in terms of recruiting:

Notre Dame:  3rd, $2,070,316.00

Marquette:  11th, $1,461,373.00

Louisville:  25th, $1,128,645.00

Thus, Memphis will now be recruiting against schools with much larger recruiting budgets.  As such, it would be in its best interest to attempt to spend at least $1,000,000.00 on recruiting for all of its teams combined.

Media

One factor about Memphis which is likely attractive to the Big East is its media presence.  Memphis ranks as the 48th largest television market.  While this number in and of itself does not scream huge media ratings for the Big East, it is important to compare how it stacks up to the media ratings of those schools leaving the Big East.

Arguably, in finding a new member, the Big East would want to find candidates on par with those schools leaving, so as to fill their “shoes” upon their departure.  Memphis nicely fits this mold.  While Pittsburgh was ranked the 23rd largest television market, Syracuse was ranked the 81st.  Thus, Memphis’ 48th ranking falls nicely in between Pittsburgh and Syracuse’s rankings, arguably pleasing the Big East.

In all, Memphis appears to be a worthy candidate for Big East membership.  If the Tigers can turn a profit and increase their recruiting expenses, Memphis should be largely competitive in the conference.

Conference Recruitment Expense Series: Conference USA

The last post for today in BusinessofCollegeSports.com’s Conference Recruitment Expense Series is Conference USA.

Today, recruitment expense data from the ACC, Big East, Big Ten, Big 12 and Conference USA was posted.  Tomorrow, 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.

Schools Men’s Teams Recruiting Expenses Average Per Team Average Per Athlete
East Carolina $340,355.00 $48,622.14 $1,299.06
Houston $344,423.00 $68,884.60 $1,275.64
Marshall $390,190.00 $65,031.67 $1,823.32
Memphis $759,844.00 $108,549.14 $2,824.70
Rice $447,140.00 $74,523.33 $1,894.66
SMU $290,043.00 $48,340.50 $1,355.34
Southern Miss $285,437.00 $47,572.83 $1,413.05
Tulane $305,021.00 $61,004.20 $1,763.13
Tulsa $471,693.00 $78,615.50 $2,134.36
UAB $234,669.00 $39,111.50 $1,179.24
UCF $334,079.00 $55,679.83 $1,561.12
UTEP $356,997.00 $89,249.25 $2,203.69

 

Schools Women’s Teams Recruiting Expenses Average Per Team Average Per Player
East Carolina $183,082.00 $22,885.25 $1,005.95
Houston $155,007.00 $22,143.86 $1,013.12
Marshall $146,512.00 $18,314.00 $856.80
Memphis $201,306.00 $28,758.00 $1,502.28
Rice $200,054.00 $33,342.33 $1,460.25
SMU $154,689.00 $17,187.67 $781.26
Southern Miss $121,741.00 $17,391.57 $989.76
Tulane $120,340.00 $20,056.67 $994.55
Tulsa $184,883.00 $23,110.38 $983.42
UAB $174,821.00 $21,852.63 $1,294.97
UCF $196,286.00 $19,628.60 $1,027.68
UTEP $161,002.00 $20,125.25 $1,298.40

In 2010-11, the greatest amount expended to recruit for men’s sports programs was spent by Memphis.  Memphis expended $759,844.00 to recruit for its men’s teams in 2010-11.  Subsequently, Memphis spent the most, on average, per team to recruit for its men’s sports programs in 2010-11.

The Conference USA school which spent the most on recruiting for its women’s sports teams in 2010-11 was also Memphis.  Memphis spent $201,306.00 on recruitment expenses in 2010-11 for its women’s teams.

However, on average, Rice spent more per team when recruiting for its women’s sports teams in 2010-11.  In 2010-11, Rice’s women’s sports teams spent an average of $33,342.33 on recruitment expenses.

C-USA Financials ’10-’11

The next conference we’re looking at is C-USA. The ACCBig XII and Big East were posted yesterday. The chart is sorted by ’10-11 profits for each football and men’s 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. We just want to make you aware of the possible variances and will let you draw your own conclusions.

The Case for UCF to the Big East

Recently, the Big East announced that it wishes to add six football teams to its conference, bringing the conference up to twelve participating football teams.  Several schools have been touted as being sought after by the Big East for this purpose, including the University of Central Florida.  When looking at the business aspects of this move, it’s clear why the Big East has its eyes on UCF.

Automatic Qualifier

Arguably one of the biggest factors the Big East is concerned with when extending invitations to universities to join the conference, is that it maintains its BCS Automatic Qualifier status.  UCF is poised to assist the Big East in accomplishing this.

Last season, the UCF Knights finished ranked 25th in the BCS standings.  Although this season the Knights only have a 3-3 record, their success last season arguably depicts that they are a football team to contend with and someone who will help the Big East maintain its BCS AQ status.

Football Revenue

While the Big East has formerly been known as a basketball powerhouse conference, the fact that the conference is specifically seeking out institutions to create a 12-team football conference depicts a shift in its sport of choice.

UCF boasts football revenue that is on par with other Big East schools.  The following depicts conference and institution football revenue for the fiscal period between July 1, 2009 through June 30, 2010:

Big East: $18.8M

UCF:  $15,173,200.00

UCF’s football revenue during this time period was greater than other Big East school’s, including UConn, whose football revenue was $14,400,371.00.  Additionally, another school the Big East reportedly has its eyes on–the University of Houston–only had football revenue of $7,719,733.00 during the period.

Thus, UCF’s football revenue puts it on par with other schools presently in the Big East and those set to join the conference.

Basketball

As noted above, the Big East has been known for some time as one of the biggest basketball contenders in the NCAA tournament.  The Big East Tournament hosted at Madison Square Garden has always drawn a loyal basketball-loving crowd.  With the defecting by Syracuse and Pitt to the ACC, the Big East arguably loses some of its basketball prowess.  However, the conference remains a basketball talent hotbed, as teams such as UConn, Georgetown, Louisville and Marquette continue to be conference members.

While UCF isn’t on the same level in terms of basketball talent as these schools, it will likely be able to compete.  The Knights made the NCAA tournament in 2005.

Additionally, during the 2009-10 fiscal year, UCF’s men’s basketball team actually turned a profit.  As seen here, this is not something that every basketball team accomplishes.  The fact that UCF turns a profit in men’s basketball is arguably attractive to the Big East, as it was the only conference to make more money from March Madness than the BCS during the 2008-09 and 2009-10 fiscal years.

Facilities

UCF’s facilities are set for the big stage.

The Knights’ football team competes in the Bright House Networks Stadium, which is the nation’s newest college football stadium.  The stadium is a 24-acre, 45,301 seat state-of-the-art facility.  The stadium was built as part of a $60 million construction project, which also included building practice fields for the Knights’ football, soccer and baseball teams.

The Knights’ basketball team also is sitting pretty in terms of its facility.  Basketball games tip-off in the UCF Arena, which opened its doors in the 2007-08 season.  This arena can seat 10,000 fans.

Market

Orlando is a huge market that the Big East would be smart to tap into.

While Orlando has the third-largest media market in Florida (behind Tampa and Miami), it is still the 19th-largest in the United States.

Additionally, in terms of licensing opportunities and merchandise sales, UCF is a great target.  The school is the second-largest in terms of enrollment, after Arizona State University.  In 2009-10, UCF received $3.3 million in revenue from licensing, royalties, advertising and sponsorship.  This number surpassed that earned by other schools in its current conference, including UAB, East Carolina and Memphis, by up to $2 million.

All in all, numerous factors make UCF a very favorable candidate for Big East expansion.

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.

The Case for Houston to the Big 12: Economic Impact

With Texas A&M’s official announcement that it is leaving the Big 12, at least one school can expect a call from the conference. I think the case can be made for several schools to the Big 12, which is why I think now is the time for the conference to get back to twelve members and attempt to solidify its future.

This is one of four pieces making the case for University of Houston to receive an invite to the Big 12. The other pieces can be found at Forbes.com and ChuckOliver.net. Links follow this piece.

City of Houston:

Being in a conference like the Big 12 generally means bigger crowds at home games. Out-of-town visitors are likely to stay a night or two, eat in local restaurants and make other purchases in local establishments.

A move to the Big 12 for U of H could mean even more than the bump you naturally get from moving to a conference where you’ll host teams like Texas and Oklahoma. U of H already has plans to build a new football stadium and upgrade the basketball arena. It’s expected to build a new stadium that seats 40,000 to 50,000, but if they received an invite to the Big 12 I could see them going to 60,000. As a side note, no Big 12 stadium holds less than 50,000.

New construction means a positive economic impact on the local community and job creation. A study on the construction of a new stadium for the Minnesota Vikings predicted 8,000-13,400 jobs. The Marlins expect to create 5,000 jobs with construction of their new stadium. Both projects are larger in scale than the U of H construction of a new football stadium and renovations to the basketball arena, but you get the picture.

Although U of H already has plans to construct a new football stadium and expand the basketball arena, it stands to reason that there is greater potential to raise the money and make it a reality if they were to join a major conference. Both projects would likely be grander in scale as well.

Another opportunity in Houston would involve the use of another stadium: Reliant Park. I spoke with David Tagliarino, Director of Sponsorship and Sports Marketing for SMG – Reliant Park, and asked about the relationship between Reliant Park and University of Houston. He discussed hosting the Final Four with U of H this year and how the two will partner again to host the event in 2016. “As it relates to football, we’ve hosted a lot of Houston games,” Tagliarino said. “We have a great relationship with them.”

When asked if there was a formal agreement in place to host home football games when Houston razes Robertson Football Stadium and builds a new stadium, Tagliarino said no. However, he noted they’ve had conversations where they’ve reaffirmed their commitment to do anything they can to help U of H as a partner. “If we can end up playing a role to assist U of H while they go through upgrades or reconstruction, and there’s a role we can play as a temporary home, that’s something we’re interested in doing.” He followed up by noting Reliant Park’s first priority is the Texans and accommodating their needs and that there are financial issues to work out with U of H. However, he said they would work through those if the opportunity arose to host games.

Yesterday, it was announced that the Bayou Bucket rivalry game between U of H and Rice will be played at Reliant Park in 2012 and 2013. State Farm is a title sponsor of the game and Fox Sports Network will be nationally televising the game. U of H Athletic Director Mack Rhoades said yesterday, “Moving this game to Reliant also allows us in the future to consistently have a minimum of seven games played in the City of Houston. We envision this rivalry extending beyond our fans to the entire city.”  

Will there be additional opportunities for Houston to play home games at Reliant Park beyond the reconstruction phase and the Bayou Bucket if they join the Big 12? Tagliarino says he’s sure U of H hopes to have a new stadium on campus to showcase for home games, but that it will likely seat only 40,000-50,000. Reliant Park seats 72,000 and has over 200 suites.

Asked his opinion of U of H moving to the Big 12, Tagliarino said, “If it’s the direction [U of H] wants  to go, we’d be in absolute support of that.”

What kind of money can a U of H home game played at Reliant Park bring in? The Texans and Lone Star Sports & Entertainment, a subsidiary of the Texans, commissioned a study on the Meinke Car Care Bowl of Texas and found it to have an economic impact of $25 million. Attendance at last year’s game between Illinois and Baylor was 68,211, just shy of full capacity. Tagliarino says he thinks a game featuring Houston against Texas or Oklahoma would sell out, although he notes Texas fans would likely not stay the night like bowl game attendees.

There’s evidence to suggest Tagliarino is right about the possibility of sell outs. During the Southwest Conference Era (1976-1995), Houston was home to some large crowds, including a game against Texas that drew 72,124 fans and one against Texas A&M that drew over 70,000, both played at Rice University. Other games played at the Astrodome, which seated fewer, drew well over 50,000 fans.

Although Robertson Football Stadium holds just 32,000, there’s a reason U of H has plans to build a new stadium. In the past two seasons, the capacity has been exceeded six times: UTEP (2010), Texas State (2010), Texas Tech (2009), Mississippi State (2010), Tulane (2010) and UCF (2010). Average home attendance in 2010 was 99.15% of capacity, exceeded by only three members of the Big 12, one of whom is departing Texas A&M:

Oklahoma                           103.20%

Texas                                    100.53%

Texas A&M                         99.37%

Kansas State                      95.43%

Texas Tech                          94.47%

Kansas                                  92.30%

Missouri                               86.67%

Oklahoma State                84.38%

Iowa State                          82.54%

Baylor                                   80.09%

Although all of those stadiums are larger than Robertson Football Stadium, but it’s obvious U of H needs to expand. Not only did they exceed capacity for five of six home games last year, but the sixth against Tulsa still had the stadium at 93.89% capacity. Season ticket sales increased by 82% for the 2010 football season and were up 136% over the past two years. With the goal of increasing on-campus residential living to 25% of enrolled students by 2015 and plans to integrate the Metro light rail and express bus lines into campus, there’s every reason to believe attendance increases will continue for U of H. Not to mention Big 12 opponents are likely to travel better than U of H’s current Conference USA opponents.

It’s not all about football either. U of H boasts many athletic facilities that have played host to conference and NCAA events. See my piece on Forbes for more details on individual facilities. A move to the Big 12 could mean Houston would be the site for many more events, both on the conference and national level, which would mean big money for the city and the state. No other city in the Big 12 has infrastructure that matches Houston’s.

The real question is whether University of Texas would be in favor of adding U of H. Its endorsement could go a long way. Based on the positive economic impact on the City of Houston, and thereby the State of Texas, and the ability to supplant some of the rivalries lost by A&M’s departure, I wouldn’t be surprised to see some Texas politicians leap into action. If they can convince University of Texas to exert its influence over the Big 12, U of H has a real shot.

Big 12:

Although the Big 12 already gets a portion of the Houston market with its other Texas schools, adding U of H opens additional doors. Being in the market is different than simply having access to the market. Houston is the nation’s 6th largest radio market and 10th largest television market. (For more on this, see my piece on Forbes about ratings for both the Big 12 and U of H in Houston.) It’s also the fourth largest U.S. city. Houston is also the second-most fertile recruiting ground in the Big 12’s footprint, with 140 prospects from Houston signing letters of intent for FBS schools in 2011.

If that’s not enough, twenty-five of the companies listed in the Fortune 500 are headquartered in Houston, the third largest concentration in the United States. In addition, more than 3,500 U of H alums serve as President or CEO of their companies, including CEO Richard Anderson at Delta Airlines, CEO Karen Katz at Neiman Marcus, CEO Douglas Brooks at Brinker International and many more. Five of the six major energy companies in the United States are based in Houston.

Why is this important? Adding U of H gives the Big 12 a better ability to market to Houston-based businesses. Consider this: the Big 12’s corporate sponsors pale in comparison to the SEC. Although I don’t have the value of the sponsorships, the sheer difference in number of corporate partners is staggering. The Big 12 lists Chick-Fil-A, Dr. Pepper, Gatorade G Series, Motel 6, O’Reilly Auto Parts, Phillips 66 and Sirius/XM. Meanwhile, the SEC’s list includes: Allstate, AT&T, Dr. Pepper, Regions Bank, Aaron Rents, Dick’s Sporting Goods, Gatorade G Series, Golden Flake, Gulf Shore and Orange Beach, Macy’s, Merita, Iron Planet, Sonic, Texas Pete, UPS and Sirius/XM.

Let’s recap. Adding U of H to the Big 12 gives the conference a tangible location in the nation’s fourth-largest city, and one of the largest media markets. It gives the conference access to some of the largest companies in the nation. The conference would have a school located in the second-most fertile recruiting ground in the country. Sounds good so far.

This is one part of a four-part series. For pieces on the economic impact of U of H moving to the Big 12 and how it fits in both on the field and as a conference member, check out these links to the other three parts of the series on Forbes.com and ChuckOliver.net:

The Case for University of Houston: Media Market, Academics, Facilities (by Kristi Dosh on Forbes.com)

Commitment Makes Houston Cougars Smart Choice for Big 12 Invite (by Chadd Scott on ChuckOliver.net)

Houston Cougars Were An Athletic Powerhouse and Can Be Again (by Chadd Scott on ChuckOliver.net)

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.