Sports Nut

Bowling for Dollars

Why college football is more cutthroat and competitive than the NFL.

Head Coach Nick Saban of the Alabama Crimson Tide

What’s the biggest story in college football so far this season? The dramatic surge of Alabama in Nick Saban’s second year? Early losses by Ohio State, USC, and Georgia, opening up room at the top for the Crimson Tide and others? I’d nominate the SEC’s $2.25 billion deal with ESPN for rights to televise the conference’s games through 2025. With an additional $55 million annually from CBS, the SEC will get $205 million a year over the life of the television contracts, a little more than $17 million per school per year. Those figures don’t resonate with football fans as much as, say, the latest jockeying in the Heisman Trophy race, but it’s these figures that will shape the game’s future.

We’ve been hearing for years that big-time college football is becoming indistinguishable from the NFL. I disagree: College football is much more cutthroat and competitive. On account of pro football’s revenue sharing—most importantly, nearly $4 billion in television money gets split up between the 32 NFL clubs each year—it’s hard for even a lousy pro football team to lose money. NFL clubs do not constantly have to upgrade their facilities in order to attract players. Instead of recruiting wars, pro teams take turns selecting the best college players, whom they pay a fixed percentage of the league’s revenues. NFL clubs also don’t steal one another’s coaches, and what they pay the men on the sidelines is not governed by fear of losing a successful coach to another team.

College football programs share revenue, too, but not nearly as much and only within conferences. That’s why the SEC’s extraordinary windfall could change the basic structure of big-time football. (While basketball and other sports are included in the conference’s TV deal with ESPN, football is the clear driving force.) In 2006-07, the most recent year for which we have data, Division I-A (now Football Bowl Subdivision) schools generated $2.04 billion in revenues. That same season, NFL clubs generated $6.54 billion (increasing to $7.09 billion in 2007), with revenues ranging from the Cowboys with $312 million to the Vikings with $182 million. Compare that relatively narrow range with that of the Football Bowl Subdivision, where the University of Texas led with $63.8 million in revenues and New Mexico State sat at the bottom with $1.1 million. The largest revenue for a school outside the six BCS conferences, TCU’s $13.3 million, ranked 55th. Of the $2.04 billion in total revenue, nearly $1.8 billion went to BCS schools.

Whether the actual numbers are familiar, the huge gap between BCS and non-BCS programs is common knowledge. But let’s dig a little deeper into the BCS conferences, where disparities are also striking. These are the average revenues for schools in the six major conferences:

SEC: $38.2 million
Big Ten: $33.7 million
Big 12: $24.8 million
Pac-10: $22.9 million
ACC: $19.5 million
Big East: $15.2 million

The SEC was already the wealthiest conference before its latest TV deals, which will nearly triple the league’s annual media revenue. With its recently launched Big Ten Network, the second-wealthiest conference has seen its media revenue increase to $15 million per school per year. (ESPN dumped its billions on the SEC to prevent it from following the Big Ten to creating its own network.) With ESPN now so heavily committed to the SEC, there’s little chance that any of the remaining four conferences will receive such a windfall. The six majors will begin to look like a top two and next four. (There’s also the unique case of Notre Dame, which has a big-money contract with NBC through 2015.)

Why does any of this matter? It matters most because of the relentless and relentlessly increasing pressure on the lesser football programs to compete with the greater ones. It is ironic that we have heard much in recent years about a new parity in college football, wherein a school like Appalachian State can knock off Michigan, and South Florida, Wake Forest, and Kansas have contended for the national championship. The occasional upset and rogue title contender shouldn’t obscure the fact that mostly, the same schools contend for the championship each year. Parity does not extend throughout the BCS conferences, let alone into the midmajors. The one-time appearance of a Utah or Boise State or Hawaii in a BCS bowl game is misleading. These outliers break through one at a time, then promptly lose their coach to a major BCS power temporarily fallen on hard times (or lose their star quarterback to the NFL) and once again take their proper places in the food chain.

When an outlier breaks through to a BCS bowl, the relative distribution of revenues between BCS and non-BCS conferences is barely affected; the overwhelming majority of non-BCS schools are not affected at all. With the BCS adding a fifth bowl game in 2006-07, the six major conferences now claim nine or 10 huge payouts instead of seven or eight, and every big-conference school gets a share. Non-BCS conferences without a representative in a BCS bowl share almost nothing.The 11 highest football revenues in 2006-07 belonged to Texas, Notre Dame, Georgia, Ohio State, Florida, Auburn, Alabama, Michigan, LSU, Iowa, and Penn State. Notre Dame is a unique case, and we would certainly have to add Oklahoma (16th) and USC (just 21st) to our list of perennial contenders, but does anyone really doubt that the wealthiest programs will provide most of the contenders for national championships into the foreseeable future? (Should Texas Tech pull off a miracle this season, it will be a “miracle” precisely for this reason.)

While public attention is always on these top programs, the bottom ones face the most brutal challenges. An infusion of an extra $100 million or $150 million into a couple of conferences—for facilities, coaches’ salaries, academic tutors, and all of the rest (though not for paying the “amateur” athletes, God forbid!)—increases the advantages for a few and raises the ante for the other conferences desperate to stay competitive. The programs with the highest revenues can cherry-pick the best athletes and then have the most resources to keep the weakest students among them on track academically. (Whether these resources translate into a good education is an issue for another day.) After three years under the NCAA’s new initiative for academic reform, the Academic Progress Rate, only three BCS programs have been penalized (Arizona, Kansas, and Washington State), a tiny fraction of the non-BCS and Division I-AA programs that have been hit. While Toledo and LSU have to meet the same APR standard, only the latter can afford a $15 million learning center for athletes.

Under Myles Brand, the NCAA is pursuing a two-pronged agenda: mandatory academic reform (via the APR), with a risk of losing scholarships and bowl appearances for failure to reach the minimum standards, coupled with voluntary fiscal restraint. Limits on spending, whether on coaches’ salaries or facilities or any other feature of a first-class program, can only be voluntary, due to the risk of an antitrust lawsuit, such as the one in 1984 that ended the NCAA’s monopoly on selling television rights.

College football’s lack of spending limits means that high-revenue schools will forever be at a competitive advantage. LSU made $48 million off football in 2006-07 and spent $16 million. The University of Toledo made $1.6 million and spent $4.6 million. With state legislatures decreasing investment in higher education and nonelite private colleges facing their own financial squeeze, football below the elite level has become a loss-leader for luring in potential donors. Most college-football fans do not worry overmuch about the fate of Baylor and Cincinnati (bottom feeders in the BCS), let alone Toledo. But it’s worth remembering that a lot of schools are spending educational dollars to subsidize athletics out of the desperate hope for “intangible” benefits, and a lot of athletes are making the academic sacrifices demanded at all levels of Division I without institutional resources to support them.

The media-rights windfalls for the Big Ten and SEC, then, will not introduce inequality into big-time football but rather reconfigure the inequalities that have long existed. The big winners will be the schools in those two conferences with smaller-budget football programs: Mississippi State, Vanderbilt, Mississippi, Northwestern, Indiana, and Minnesota, all of them with football revenues under $20 million in 2006-07. But disparities within conferences will remain huge. With $63.8 million in revenue in 2006-07, Texas made $26.6 million more than its closest Big 12 rival (Oklahoma, at $37.3 million). Now the Longhorns are exploring the possibility of launching their own statewide TV network.

While a University of Texas TV network seems like an unlikely prospect considering that all of their games are already on TV, it’s not surprising that college football’s top tier is exploring such a move. (Like the SEC contracts and the Big Ten Network, the proposed UT network is for all sports, and the fact that the football games are already televised is what makes the prospect unlikely.) It is inconceivable to me that top programs will choose to share more revenue, and the NCAA is powerless to mandate such sharing. At some point, this inequality between and within conferences will become unsustainable for those at the bottom, perhaps even for those just below the top. Not by free choice but from overwhelming external forces, a dramatic reconfiguration of big-time football will come. What it will look like is unpredictable: Conference realignments that exclude the small-revenue schools? A single superconference along the lines of soccer’s Premier League, with the remaining teams consigned to lesser status? What is clear is that whatever happens will be determined by those on top, while the rest scramble to salvage what they can.