The Sports Professor Rick Horrow, in conjunction with promotional partner Northern Trust, reviews the business of college football – keyed to this week’s kickoff.
The 2006-07 college football season kicks off on Thursday with nine games – more weekday games than ever before. In the off-season, the NCAA officially changed the name of the business – Division I-A teams now participate in the “Football Bowl Subdivision” (as compared to the “Football Championship Subdivision” for formerly Division I-AA teams).
A new name does not change the reality that college football programs are mid- to large-sized businesses. According to the Sports Business Journal, the top five revenue producing public university athletic departments are as follows:
Ohio State $89.7 million Texas $89.6 million Michigan $78.4 million Florida $77.7 million Wisconsin $75.8 million
The NCAA reveals the five most profitable athletic departments are as follows:
Georgia $23.9 million Michigan $17.0 million Kansas $10.1 million Virginia Tech $ 8.3 million Texas $ 7.3 million
While the average school spends over $23 million on athletics, only 40 claim to operate their athletic programs in the black. Yet, these institutions service 360,000 student-athletes in 23 sports.
The economic pressure is clearly on.
I. HOW DO COLLEGE FOOTBALL PROGRAMS MAKE ENDS MEET?
1. Take advantage of the additional 12th game. This year, the NCAA allows schools to add a 12th regular season game. For a small handful of teams, it means scheduling a top draw that will generate substantial television money – and a major rivalry that is good for the fans.
For most top teams, however, the 12th game means scheduling a relatively weak opponent early in the season that will guarantee a victory and generate another sellout for its rabid fans (regardless of the opponent). On the flip side, weaker teams receive a six-figure guarantee, welcome revenue for their program. Troy State (Alabama) will earn $750,000 for playing at Nebraska this year. Montana earns $650,000 by traveling to Iowa, and Louisiana-Lafayette will receive $750,000 to get thrashed by Tennessee next year. The University of Buffalo has “doubled its economic pleasure” – receiving $600,000 for playing at both Auburn and Wisconsin this year. Buffalo finished 1-10 last season, and prospects seem similar for this year (presumably, with better economics).
2. Creatively tap Corporate America. College football ad spending reached an all-time high of over $480 million last year, a 10.3 percent increase over the previous year. ESPN recently sold out its ad inventory for its new ABC Saturday Night College Football series, and corporations continue to find investing in college sports extremely attractive.
So, colleges are finding creative ways to take advantage of this. University of Maryland recently agreed to a 25-year, $20 million deal with Chevy Chase Bank for naming rights to the field at Byrd Stadium, the first such deal in the country. Maryland also entered into a $20 million deal with Comcast for the naming rights to their new basketball arena in 2000.
