Stewart Mandel has a piece out today on SI.com describing the range of urgency athletics administrators are feeling regarding the O’Bannon v. NCAA case currently making its way through the courts. For those of you who haven’t kept up with the case, I wrote about it in more detail here. Essentially, former UCLA men’s basketball star Ed O’Bannon and his co-plaintiffs are suing the NCAA, and other defendants, for not sharing the revenue generated in part by student-athletes both while they are in school (e.g. TV) and afterwards (e.g. video games, archive footage). If the O’Bannon plaintiffs were to win, or even settle the case in their favor, the current structure of college athletics will be forever altered.
Mr. Mandel profiled University of Southern California athletic director Pat Haden’s concern that the case is by no means a slam dunk for the NCAA, and how he and his colleagues should be preparing for the aftermath if it were to lose the case. I appreciated Mr. Haden’s comments. Up until now the little we’ve heard from administrators are the doomsday scenarios spouted off by the likes of Big Ten Commissioner Jim Delaney, who claimed his schools would rather de-emphasize sports and join Division III than go along with any type of pay for play scenario.
Mr. Haden is a lawyer. He’s been reading the articles from legal analysts and scholars. He knows the NCAA is vulnerable and the case is soft. More importantly, he knows the stakes have never been higher. It reminds me of this Family Guy/Star Wars clip, with Mr. Haden as Darth Vader and NCAA president Mark Emmert as the Empire’s henchman talking about the “invulnerable” Death Star (current NCAA structure). Mr. Haden is right to be concerned. He is right to be asking questions. He is also right to be taking proactive steps to address the possible outcomes, or perhaps look at acceptable settlement options.
The contrast to Mr. Haden is University of Texas athletic director DeLoss Dodds. He was also quoted in Mr. Mandel’s piece, but with much less concern or urgency than Mr. Haden. Mr. Dodds seemed to think he and other athletics administrators have “more immediate things to worry about,” and “have no control over (the case).” In my view, nothing could be further from the truth. The case exists only because of how the NCAA and its members (of which the University of Texas and Mr. Dodds is one) have constructed the current college athletics model. If those in power change the model, the case goes away. And while Mr. Dodds might simply be one person in a massive bureaucracy, he leads arguably the most powerful athletic department in the country, and SI.com recently named him the 8th most powerful person in college athletics (notice Ed O’Bannon ranks #4). My guess is others will listen when he speaks.
Last week much of the country’s attention was fixed on the Supreme Court’s hearing of two significant same-sex marriage cases. Reading through much of the post-argument commentary from both sides, it seemed apparent that at some point in the future, though perhaps not as a direct result of these two cases, same-sex marriage will be legal across the country. I get that same feel about the O’Bannon case and paying student-athletes. It may not be this case or right now, but at some point in the future college athletes will be paid. The only question is when the new era is ushered in, and how. Pat Haden recognizes this and wants to take action; good for him.
Follow Daniel on Twitter at @DanielHare.
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.
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.
The first interesting thing I noticed on UGA’s budget is that they break down ticket revenue for football by game. Here’s what they are projecting for each home and neutral site game this season:
|New Mexico State||$2,825,000|
You’ll note the hit UGA takes for each of the two neutral site games against Boise State and Florida: about $1 million each. In total, however, the football program is projected to make $20,045,000 from ticket sales. Comparatively, the four other sports that sell tickets (men’s and women’s basketball, baseball and gymnastics) are only projected to make $1,400,000.
It’s tough to do a direct comparison between Ohio State and UGA on a line item basis because their budgets are set up a little differently. However, it does appear that Ohio State is making a great deal more than UGA when it comes to football. Ohio State is projected to make $36,399,540 from ticket sales for the 2011 season. When you add in UGA’s sky suite revenue to the $20,045,000 ticket revenue discussed above the grand total is $25,568,400. UGA does have only 6 home games (with two neutral site games) while Ohio State has 7, and there’s a large capacity difference with Ohio State at 102,329 and UGA at 92,746.
In terms of total football revenue, it’s tough to compare the two schools line by line. For example, Ohio State shows $1,715,000 in concessions for just football, whereas UGA only shows concessions revenue for the athletic department as a whole at $1,250,000. Clearly Ohio State is making more regardless, but it’s one example of how a side-by-side comparison isn’t going to be perfect.
One thing I can compare for you is television money. Ohio State projects television revenue of $11,415,300 for football. UGA projects just $9,450,000, the difference no doubt due to the Big Ten Network. However, UGA’s projection for 2010-2011 was a bit low, so it’s likely they’ll see a little more money than projected for 2011-2012. UGA budgeted for $8.96 million in 2010-2011 and last week found out its share would instead be $9.42 million, making its $9.45 million projection for 2011-2012 likely low.
One area where UGA fans will probably be excited by the comparison, however, is recruiting budget. Ohio State shows a recruiting budget of $438,500 for football while UGA’s is at $600,000. That’s despite UGA trailing Ohio State by about $12 million in football revenue by my estimation. I was a bit surprised by this difference, as I assumed Ohio State traveled out of state for recruiting more than Georgia who has such a strong recruiting base in-state. You know what they say about assumptions. I tallied up the in-state student on both rosters and found this: UGA (65), Ohio State (64).
Another interesting comparison is revenue from the conference playoff game. UGA is projected to make $1.3 million from the SEC’s game, while Ohio State is projecting just $904,000 for the Big Ten’s inaugural game. I also think it’s possible UGA will make more than projected, as I received this budget before the SEC announced distributions for the 2010-2011 school year. The Orlando Sentinel reported that $15.3 million was split by the SEC’s 12 schools for the 2010 SEC Championship Game, which would have amounted to $1.275 million per school. The budget I have shows UGA only projecting $1 million for 2010 with an increase to $1.3 million for 2011. I’d put my money on the final figure in 2011 being higher than UGA’s budgeted amount. Obviously, Ohio State could also see more money than budgeted as the Big Ten Championship Game will be the conference’s first and is probably projected conservatively.
If you’re interested in UGA’s complete expense budget for football, here it is:
|Local Bus Service||$18,500||$20,000|
|Recruiting & Coaches Travel||$600,000||$600,000|
|Filming & Video||$91,400||$122,320|
|Pre/Post Season Training||$200,000||$210,000|
Today is the final day of The Ohio State Week on BusinessofCollegeSports.com. So far we’ve taken a look at the football program’s line item budget, the full athletic department budget and how recruiting dollars are allocated across all sports at Ohio State.
I want to close out The Ohio State Week by sharing a number of interesting tidbits from the nearly 100 pages of athletic department budget:
- Every single sport at Ohio State is receiving an overall increase in their expense budget for 2011-2012. The percentage of increase ranges from 0.9% (Women’s Cross Country) to 9.4% (Women’s Soccer). This is despite a predicted 1.5% expected reduction in revenue. As discussed previously this week, I portion of this is due to there being one fewer home football game this season, which is projected to cost Ohio State about $3 million.
- It takes over $22 million in funds from the Buckeye Club, other fundraising, interest income from their endowment, royalty income and transfers from reserves to balance the budget.
- Total coaching and staff salaries, wages and benefits are over $44 million. The projected $35 million profit from football (which accounts for 73% of all revenue generated directly from sports) isn’t even enough to cover that one category of expenses in the athletic department.
- Over $25 million is paid back to the University for items like grants-in-aid and payments to the Office of Financial Aid and Office of Academic Affairs. The athletic department also provides $100,000 to the School of Music (in addition to funding the operating budget for the band). An even larger donation goes toward library renovation with $1 million every year for nine years.
- The athletic department funds a Student-Athlete Support Services Office at approximately $2.4 million per year. I was happy to see this one after reading numerous articles over the past several months about student-athletes being admitted to schools they weren’t academically prepared for and becoming a drain on academic resources. None of those articles mentioned that athletic departments often fund these types of centers for their student-athletes. I’ve got a budget for a top SEC program to show you next week and they fund a similar service.
- Over $5 million is sent back to the University for the athletic department’s share of overhead, which covers everything from insurance to payroll services to purchasing and accounting.
- Football and men’s basketball are projected to increase television revenue in 2011-2012 by over $1 million.
- Out of 36 varsity teams only 18 produce any revenue: football, men’s basketball, baseball, men’s gymnastics, men’s ice hockey, men’s lacrosse, men’s soccer, men’s track, men’s volleyball, wrestling, women’s basketball, softball, women’s gymnastics, women’s track, women’s volleyball, women’s soccer, women’s lacrosse, and women’s ice hockey. Football and men’s basketball account for 98.3% of all the revenue generated by teams.
- Football and men’s basketball are the only sports who turn a net profit.
Yesterday I showed you the line item budget for the Ohio State University football program. The number one comment I saw in response to the piece was something along the lines of, “Ohio State football makes millions and players get nothing.”
I won’t get into the pay-for-play debate again. You can read why I think it’ll never happen here.
Does Ohio State’s football program make tens of millions of dollars? Yes. However, there seems to be some sort of misconception about where this money goes. It does not sit in a “football only” vault simply waiting to enrich the football program. As I’ve shown before, a successful football program will support a number of other sports and supplant the need for institutional support in the form of student fees and other payments from the university.
I think you’ll be surprised to see what it takes to run an athletic program like Ohio State’s. I’ll try and summarize it for you before I bombard you with charts.
Let’s begin at the end and work our way backwards. At the end of the day, Ohio State’s athletic department shows $93,678 remaining after subtracting all of their expenses from all of their revenue. That’s a far cry from the $35,721,714 net profit we saw yesterday from football.
What if I told you they wouldn’t even be showing $93,678 if it weren’t for over $22 million in funds from the Buckeye Club and other forms of fundraising, interest income from the athletic department’s endowment, royalty income and a transfer from reserves?
The over $35 million in profits from football doesn’t go far when you run an athletic department the size and quality of Ohio State University’s. In fact, it costs over $126 million to run Ohio State’s athletic department. Ohio State offers 36 varsity teams – 17 for women, 16 for men and 3 coed. Each sport is fully funded up to the maximum scholarship limit set by the NCAA for each sport. In total, 1,076 athletes are supported by the athletic department.
The profit from football doesn’t even go far enough to cover all of the expenses related to staffing the athletic department. Those expenses add up to over $44 million. Operations cost another $40 million, with over $5 million going back to the university to pay for the athletic department’s share of overhead (which includes insurance, payroll services, purchasing and accounting).
Grants-in-aid are another huge expense for any athletic department. Ohio State’s athletic department sends almost $16 million back to the university to cover athletic scholarships. Another academic-related expense that isn’t often publicized is to fund the Student-Athlete Support Services Office, which takes over $2 million. I’ve read commentary criticizing athletic departments for straining the time and budget of the academic portion of the university because of the academic support needs of student athletes, but clearly Ohio State has found a solution to this problem and the athletic department is taking it upon themselves to fund this need for its student athletes.
Overall, more than 25% of the athletic department’s budget is for monies paid to other departments of the university. In addition to those items listed above, the athletic department provides funding to several other efforts around the university. The athletic department funds a $200,000 operating budget for the band, but in addition they send additional support of $100,000 to the School of Music. Fiscal year 2012 will also see a $1 million donation to library renovation efforts, the fifth of nine annual payments scheduled to support the library. Another $250,000 goes to fund LifeSports, a four-week summer program for inner-city children.
Here is the breakdown of all expenses:
|A & P Staff||$20,785,611.00|
|Physical Plant Assessment||$456,000.00|
|University Overhead (5.9%)||$5,200,000.00|
|Bowl Game Direct||$0.00|
|JSC Operating Transfer||$2,090,030.00|
|SASSO Funding Transfer||$2,384,421.40|
|Transfer To Library||$1,000,000.00|
|Transfer To Athletic Reserves||$0.00|
|Non-Operating, Life Skills & SAOF||$1,600,000.00|
|Subtotal Other Uses||$25,616,451.40|
|Jesse Owens Stadium||$471,551.00|
|Wexner Football Center||$0.00|
|Woody Hayes Sport Fields||$985,380.00|
|Outdoor Sports Fields Renovation||$460,000.00|
|Overhead on Capital Sources||$290,000.00|
|McCorkle Aquatics Bond||$1,150,000.00|
|Subtotal Capital Uses:||$16,654,323.00|
As you’ve seen, even the handsome profits made by football are not enough to run an athletic department the size and quality of Ohio State’s. So where does the rest of the money come from? Here’s a breakdown of each source of income detailed in the 2011-2012 budget:
|Basketball – Men||$16,977,200.00|
|Basketball – Women||$595,000.00|
|Ice Hockey – Men||$580,000.00|
|Other Sports – Men||$195,000.00|
|Other Sports – Women||$51,000.00|
|Admin and Misc||$9,842,850.00|
|Sports Camps & Clinics||$3,202,000.00|
|Bowl Games – Big Ten||$2,231,000.00|
|Championships & Tournaments||$250,000.00|
|Subtotal Athletic Operations||$23,403,220.00|
|Bowl Game Direct||$0.00|
|Other Fundraising & NCAA SAOF||$1,600,000.00|
|Interest Income from Endowment||$1,900,000.00|
|Transfer from Reserves||$4,000,000.00|
|Subtotal Other Sources:||$22,200,000.00|
|Total Operating Sources||$112,763,270.00|
|Stadium Ticket Surcharge||$3,565,000.00|
|Stadium Club Seats||$5,600,000.00|
|Stadium Scoreboard Increase||$0.00|
|Trans from McCorkle plant account||$0.00|
|Trans from Plant Reserves||$0.00|
|Subtotal Capital Sources||$13,715,000.00|
Keep in mind that this budget is not the final budget for 2011-2012. Certainly some adjustments will need to be made after this week’s news that Jim Tressel has resigned, and I’m told that raises for personnel have not yet been determined.
Check back tomorrow for a detailed look at how recruiting dollars are spread amongst the sports at Ohio State!
To kickoff Ohio State Week on the BusinessofCollegeSports.com I want to start by looking at the line item football budget. Check back each day this week for more Ohio State numbers, including recruiting expenses and overall athletic department budget.
Below you’ll see numbers for both the 2010-2011 and 2011-2012 school years. These numbers were obtained directly from the Ohio State University athletic department. Please note this 2011-2012 budget was prepared before the events of this past weekend, so you can expect some changes, especially with regards to coaches salaries. Also, decisions on raises for all personnel have not yet been made.
One thing to note as you take a look is that Ohio State has 7 home games in 2011-2012 compared to 8 in 2010-2011. Interesting to see how that impacts the overall budget both in terms of revenue and expense. Be sure to read after the chart to see how some of these numbers fit into the athletic budget as a whole.
|Season Tix – Fac/Staff||6,868,000||6,009,500|
|Season Tix – Students||5,002,500||4,785,000|
|Public Ticket Sales||30,310,760||25,605,040|
|Postage & Handling||0||0|
|A & P||3,447,937||3,707,931|
|Benefits Fee Waivers||48,000||72,000|
|Clothing & Equipment||173,400||173,400|
|Equipment Rep & Maint||53,000||59,300|
|Building & Grounds Rep & Mnt||25,000||25,000|
|Game Day Expenses||1,120,000||925,000|
|Dues & Memberships||1,800||1,800|
|Shipping & freight||0||0|
|Grant In Aid||3,307,000||3,413,000|
A few of the categories probably need clarification. A&P is Administration and Professional staff salaries. This category includes the salaries of all coaches. CCS is pay for Civil Service Personnel, who are support staff belonging to a union. Specials can cover a number of items from special event staff to incentives that may be paid to coaches as a part of their contract.
I think it’s interesting to see all the expenses associated with running a top-notch football program like Ohio State’s. I won’t comment on many of the categories, but I wanted to let you see them all. As I noted earlier, Ohio State has one less home game for the 2011 season. Amazing what a difference one game can make. The loss of that one home game costs Ohio State roughly $3 million!
As you can see, the two biggest expenses are salaries and grants-in-aid (payments back to the university for scholarships). Administrative and Professional salaries for football account for 18% of all salaries in that category in the athletic department, and grants-in-aid for football are nearly 22% of all aid granted by the athletic department. Football has the greatest number of athletes participating, so this should be no surprise.
I often hear fans lament the great amount of money spent on football compared to other sports. However, football is the one sport where you can likely spend more to make more. Revenue from football accounts for 73% of all revenue generated by individual sports at Ohio State, and football is one of only two sports who turn a net profit. Later this week I’ll show you how the profit generated by football supports the athletic department as a whole, proving the investment in football is a wise one. Until then, you can read my previous piece on how “other sports” are funded.
If you read this site regularly or follow me on Twitter, you know that I am in Ireland from May 17-25th. While I’m away, I’m sharing with you the work of Patrick Rishe, my collegue at SportsMoney on Forbes.com.
By: Patrick Rishe
On June 10th, 2010, Yahoo Sports reported that the NCAA’s probe into USC’s athletics program resulted in:
• A postseason ban in football following the 2010 and 2011 seasons;
• A loss of 30 total football scholarships over the 2011, 2012 and 2013 seasons;
• 4 years probation;
• A vacation of all football victories starting in December 2004 and running through the 2005 season, including the national championship win over Oklahoma in January 2005.
Many of these penalties were levied after the NCAA’s lengthy review of wrongdoing within the USC football program. Specifically, wrongdoing by Reggie Bush and his family which included multiple cash payments from would-be sports marketing agents, a house for Bush’s parents, an automobile outfitted with rims and a stereo system, airfare, hotel stays, limousine service, meals, auto repairs, clothing, furniture, and appliances.
Now there is no question that these penalties were quite severe. Partly because of the nature and the volume of infractions at hand (there were other infractions with USC’s men’s basketball and women’s tennis programs). And partly because, in my opinion, the NCAA had additional venom because they felt the USC athletics department and the Bush family were less than accommodating during the investigation.
Prior to the penalties being levied during the investigation, I can recall friends of mine who did and still work within the NCAA using words like ‘arrogant’ and ‘elitist’ to describe former USC athletics director Mike Garrett. An attitude that, at the time, permeated throughout the program.
An antagonistic, defiant attitude that showed little contrition or remorse over its actions. And thus, garnered little sympathy or leniency when the NCAA handed down its punishment.
Conversely, at least prior to December 2010, I don’t think the average college football fan would use those same words and sentiments to describe Ohio State athletics. I had the impression that NCAA Headquarters looked upon the Buckeye program rather favorably.
So that’s why the NCAA’s ruling and assessment of penalties for Ohio State on August 12th is so compelling.
Will they punish the Buckeyes more or less than they punished the Trojans?
Will that decision be based solely on a comparison of the infractions at hand, or will the NCAA show leniency towards Ohio State because (a) they proactively imposed self-penalties once the truth was discovered and (b) are better liked by NCAA administrators because the program is perceived more positively than USC’s program?
To review the Buckeyes’ mess:
- Coach Jim Tressel was notified in April 2010 via emails from a Buckeyes fan and former player that Ohio State players were trading signed jerseys and other memorabilia to a Columbus tattoo parlor owner for cash and reduced-price tattoos;
- Even though his contract and NCAA rules required him to notify athletic director Gene Smith, Ohio State President E. Gordon Gee or the university’s compliance department about this information, Coach Tressel did not;
- It was not until more than 9 months passed—and five players including quarterback Terrelle Pryor had been suspended for the first five games of the 2011 season—that Ohio State officials discovered the emails and confronted Coach Tressel. He finally admitted he knew of the players getting improper benefits;
- Coach Tressel was originally suspended for 2 games—later extended to the first 5 games this fall to match the punishment of the five players—and was fined $250,000, required to make a public apology, receive a public reprimand, and attend an NCAA compliance seminar which he will do June 6-10 in Tampa.
And just when you thought you heard the last of it, the Columbus Dispatch reported Saturday that the university is officially investigating used-car sales to at least eight football players and 11 players’ relatives from two Columbus, Ohio dealerships.
Now Ohio State, along with the rest of us, must sit back and await whether the NCAA chooses to impose further sanctions. The ruling is set for August 12th.
So this begs the question: “What is equitable punishment for Ohio State when comparing their infractions to the infractions and penalties imposed upon USC?”
As it relates to athlete-specific violations, it seems that Reggie Bush’s infractions were more severe than Ohio State players selling their own memorabilia and getting discounted tattoos…though if fire follows the smoke from the afore-mentioned car sales report, that “severity gap” closes. Especially if players and their relatives were getting discounted cars in exchange for Buckeye football tickets.
And I fear that ‘that’ fire might combust before summer’s end.
As it relates to the behavior of the coaches involved, at least former Trojans and current Seattle Seahawks coach Pete Carroll had the good sense to get out of dodge before the mess landed on his front lawn. Maybe he knew what Reggie Bush was up to, but it’s plausible that he didn’t. Whether you think him corrupt, naive, goofy, aloof, or all of the above, there is no evidence to date that he knowingly lied to his superiors or NCAA investigators regarding Reggie Bush.
Conversely, Coach Tressel knowingly LIED. He lied to his superiors at the university. And his calculated deception allowed ineligible student-athletes to compete for Ohio State during the 2010 season.
Student-athletes have the luxury of falling back on the ”young and dumb” argument in the court of public opinion. Coach Tressel does not have that luxury, especially since he and former players have had previous brushes with the NCAA both at Ohio State and his previous employer Youngstown State.
Just ask Tennessee and Bruce Pearl how the NCAA likes it when you lie to them. Pearl lost his job because Tennessee wanted to save face with the NCAA, and we’ll find out in a few weeks when they go in front of the infractions committee whether this firing curried any favor.
So if a coach’s lies are seen as equally afoul of the rules as a player’s inappropriate receipt of money and gifts, then we should expect that Ohio State will receive further penalties come August.
Vacated wins? Check.
Lost scholarships? Check.
Bowl ban? Check.
And, at the very least, a one-year suspension of Coach Tressel. It still would not surprise me if Coach Tressel resigned in light of the continued heat he will face in the upcoming months.
Yet, there’s a small part of me that thinks the NCAA may not be as harsh with Ohio State as they were with USC.
I go back to the animosity that NCAA officials had with the USC program. The NCAA went after USC the same way the federal government went after Barry Bonds. They were unrelenting in their pursuit of justice, and they ultimately ‘got their man’.
At least Ohio State has shown a level of contrition which USC never did.
At least Ohio State was willing to impose penalties upon themselves which USC never did.
And because the athletic department has been proactive once the truth was revealed, this might be just enough to lessen the severity of the oncoming and added sanctions.
A fortune teller I’m not, but I can tell you that Coach Tressel and Ohio State football are about to lose a fortune’s worth of credibility and respect.
Only time will tell how severe the upcoming sanctions will be, and whether said sanctions will jeopardize the Buckeyes’ stranglehold on Big Ten football dominance.
But the NCAA is on trial as well, and there will be many interested observers ready to critique if the Buckeye sanctions are inequitably different from USC’s.
Follow Patrick on Twitter @SportsDocRock or visit www.patrickrishe.net
If you read this site regularly or follow me on Twitter, you know that I am in Ireland from May 17-25th. While I’m away, I’m sharing with you the work of Patrick Rishe, my collegue at SportsMoney on Forbes.com. This is the fourth of a series of pieces Patrick did for SportsMoney on college basketball finance. You can find all of my pieces on football finance here.
By: Patrick Rishe
Part I of our coverage of the economics of college basketball compared the revenues of the top 14 rated Division I conferences as listed by the RPI ratings. And Part II provided an overview of the top revenue generating basketball programs in the country.
Part 3 of our assessment of college basketball financials took an in depth look at the college basketball financials of the Big East Conference. We saw that its 16-team conference generated the most conference revenue from men’s basketball among any conference in the country, topping $154 M in revenue for the 2009-10 season.
However, the Big Ten Conference actually generates more revenue from men’s basketball per school than the Big East, showcasing that there can be some drawbacks from having a mega-conference. Namely, you have more mouths to feed and thus more sharing must take place.
Part IV of our look at college basketball financials focuses herein on the Big Ten.
According to NCAA financial data, over the last 6 years the Big Ten has earned $82.9 M in March Madness money based on their conference’s collective postseason performance. This amounts to $13.5 M per year, 4th best among all other Division I basketball conferences behind the Big East, Big 12, and ACC.
So with that as a framework, let’s further review the financials of individual schools within the Big Ten. And recall from our earlier pieces that the financial data for these programs comes from the U.S. Department of Education and is for the 2009-10 academic year. For reasons described in the afore-linked pieces, this data is highly robust and credible as schools must report their financials to the U.S. Department of Education.
WHICH BIG TEN TEAMS EARN THE MOST REVENUE?
Big Ten schools average $12.5 M from men’s basketball with a median of $13.7 M.
Wisconsin earned the most revenue from men’s basketball among Big Ten schools, with Indiana, Ohio St, and Michigan St not too far behind. These schools earned between 29-41% more revenue than the league average.
Four schools in the conference (Iowa, Penn St, Michigan, and Purdue) earned significantly below $10 M in men’s basketball revenues for the reporting year, ranging between $7.8-8.8 M.
OHIO STATE AND WISCONSIN THE MOST PROFITABLE
When you factor in expenses, Ohio St and Wisconsin are the only 2 schools that earned profits in excess of $10 M. Purdue again ranked last in the conference, earning only $2.6 M in men’s basketball profits.
For the conference, the average men’s basketball profits reported was $6.9 M and the median profits was $8.5 M.
|TEAM||MBB REV||MBB EXP||MBB PROFIT|
INDIANA AND ILLINOIS HAVE THE LARGEST “BASKETBALL SHARES”
With respect to what I’ve called the “basketball reliance” metric, the table below shows that Illinois and Indiana earned 26.9% and 24.1% of their “men’s sports revenue” from basketball. The only other schools with “basketball revenue shares” greater than 20% were Northwestern and Michigan State.
|MBB REV AS|
|TEAM||MBB REV||TOT REV||% OF TOT REV|
In short, the data shows that the typical Big Ten school earned roughly 17% of its “men’s sports revenue” from men’s basketball.
Schools like Michigan, Penn St, and Iowa received less than 10% of their overall men’s revenues from basketball, largely because of the relative disparity between their revenue-generating ability in football relative to their basketball programs.
To this point:
|TEAM||MBB REV||FB REV||FB REV / MBB REV|
This shows that (a) the average football revenue for Big Ten schools was $40.6 M per school, and (b) Big Ten schools averaged $364 in football revenue for every $100 in men’s basketball revenue.
Penn St, Michigan, and Iowa were the only schools to earn at least 5 times more football revenue than men’s basketball revenue.
REVENUE GROWTH FOR THE CONFERENCE
|Total Rev – Men+Women Sports||$656,351,301||$493,419,907||1.33|
|MBB Rev as % of Total||21.0%||6.7%||3.14|
|WBB Rev as % of Total||1.3%||2.0%||0.67|
|Basketball as % of Total||22.3%||11.5%||1.94|
Comparing aggregate conference revenue data from 2003 to 2009 and controlling for inflation by measuring both years in constant 2009 dollars, we can surmise that:
- Men’s basketball revenues have grown roughly 214% during that span while women’s basketball revenues have shrunk by 33%;
- Men’s and women’s basketball comprised 22.3% of aggregate revenue from men’s and women’s sports in 2009, significantly up from 11.5% in 2003.
One must surmise that the creation of The Big Ten Network has had a significant impact on the growth of men’s basketball revenues.
BIG TEN TOURNAMENT – A WEAKER DRAW AMONG BCS CONFERENCES
Lastly, based on attendance data from the NCAA for the 2009-2010 season:
- The Big Ten tournament ranked 5th in average attendance per session in 2010 with 16,325 fans per session (ACC, Big East, Big 12, and SEC Tournaments all had higher attendances per session);
This stands in contrast to the regular season, where in 2009-2010 the Big Ten was the only conference with an average attendance in excess of 12,000 fans per game.
All in all, and likely in large part to the creation of The Big Ten Network, the Big Ten’s men’s basketball revenues are among the best in the nation.
Many thanks to Saint Louis University Sports Business students Bryan Beasley, Jacob Fish, Brett Goldman, Jeff Tiedman, Jordan Erk, and Andrew Moses for their contributions to this article.
Follow Patrick on Twitter @ SportsDocRock or visit www.patrickrishe.net
Yesterday I showed you how each conference’s television contracts compare in terms of first and second tier rights fees. I didn’t cover third tier rights because they’re so hard to track down. Some third tier rights are bundled by the conference as a whole and sold to regional networks while others are retained by each individual school and sold to a local or regional network.
What I can show you is what each school is showing as revenue for broadcasting rights (television, radio and internet) through their responses to open records requests. This is separate from the money they receive from conference distributions, so it shouldn’t include any broadcasting money received from conference-wide media rights contracts.
The chart below is every school for which I have a value and represents the 2009-2010 school year. Those not listed either showed $0 or did not have to respond to open records requests (either because they’re private or protected by state laws).
|1||University of North Carolina||$11,171,458.00|
|2||University of Alabama||$8,444,674.00|
|3||University of Kentucky||$7,743,327.00|
|4||University of Florida||$7,450,000.00|
|5||University of Kansas||$7,276,988.00|
|6||Louisiana State University||$7,012,730.00|
|7||Oklahoma State University||$6,395,000.00|
|8||University of Tennessee||$6,293,621.00|
|9||Oregon State University||$6,267,671.00|
|10||University of Georgia||$6,231,392.00|
|11||University of Wisconsin||$5,547,740.00|
|13||University of Nebraska||$4,393,529.00|
|14||University of Missouri||$4,081,549.00|
|16||Kansas State University||$3,263,941.00|
|17||Iowa State University||$2,608,896.00|
|18||North Carolina State University||$2,470,750.00|
|19||Penn State University||$2,362,500.00|
|20||Ohio State University||$2,329,462.00|
|21||University of South Carolina||$1,829,000.00|
|22||University of Connecticut||$1,749,796.00|
|23||University of Louisville||$1,675,000.00|
|24||University of Mississippi||$1,658,650.00|
|25||University of Iowa||$1,500,000.00|
|27||University of Washington||$1,248,599.00|
University of Illinois
|29||University of Cincinnati||$1,000,000.00|
|30||University of Arkansas||$950,000.00|
|32||Michigan State University||$660,025.00|
|33||University of South Florida||$588,298.00|
|34||Washington State University||$562,098.00|
|35||West Virginia University||$404,284.00|
|36||Florida State University||$349,869.00|
|37||University of Texas||$338,171.00|
|38||University of Minnesota||$324,000.00|
|39||University of Oklahoma||$317,361.00|
|40||University of Colorado||$155,528.00|
|41||University of Oregon||$108,452.00|
Because I know fans enjoy arguing about which conference is better, here are the averages for each conference (keep in mind, however, each conference has one or more schools whose numbers aren’t available):
Big 12: $2,620,997
Big Ten: $1,389,879
Big East: $902,896
Don’t give these averages too much weight in terms of comparing conferences. Tough to really compare the conferences, because the third-tier rights left for each school to sell individually varies greatly by conference based on what third-tier rights have been packaged by the conference as a whole.
If you’re interested in seeing a conference-by-conference breakdown, follow the jump…