Bowling for Dollars

We’re dropping a deuce in our “Bowl Crap” series… Again, this is an update of some earlier work.

Welcome to part two of the “National Championship/Bowl System” review. In part one, we talked about where the bowls came from (not the stork), and how the idea of a National Championship has changed in the past one hundred years.

It’s been said for awhile that the key to the Bowls and the BCS is the amount of money that the system creates for advertisers and Bowl committees, and for the schools and athletic departments involved.

Here is the key thing to consider about the BCS: the system is not designed to choose a final victor! The BCS is designed to maximize revenue and exposure for the major conferences. And the BCS does that very well, thank you.

It starts with the name. The organization is called the Bowl Championship Series, not the Football Championship Series. The winner of the Ohio State-LSU game will be the champion of the BCS, an artificial five-game theatrical event. Names matter, and based on its name, the BCS does not even pretend to be about choosing college football’s best team. The BCS asserts that it is choosing the best possible set of five bowl games — and usually achieves that goal.

Then think about the name the NCAA increasingly insists be used for Division I-A, the Football Bowl Subdivision. This name has been derided for Orwellian silliness; “Division I-A” is a perfectly fine label. But at least the name Football Bowl Subdivision is honest. It says, “At the football-factory level, we’re not even attempting to determine a champion. What we’re attempting to do is stage bowls that make money.” Division I-AA is now officially the Football Championship Subdivision. At the Division I-AA level, there are playoffs and a champion is crowned; the new formal name reflects that. At the Division I-A level, the NCAA and BCS (technically separate, but in effect operating jointly) put it right on the table: selling bowls, not crowning a champion, is the goal.

In looking deeper, though, it turns out that my perception that “there’s money for everyone” was wrong. Well, kinda. Let’s take a look at both parts of “everyone”- First, the bowl committees.

The Orange County Register did an amazing job researching the money trail, and points to several aspects that reinforce the current systems:

• Bowl committees rake in all of their money tax free. Because they are “affiliated” with “educational endeavors”, they experience the same benefit as the NCAA (again, in spite of the fact that the NCAA doesn’t have any oversight for these games-see previous posting). This is thanks to a 1991 ruling by the federal government holding that the Cotton Bowl could have a corporate sponsor without jeopardizing their exempt status.
• The BCS has donated over $500,000 to Washington connections, and seven bowl organizations have received at more than 21 million dollars from the government since 2001.
• Bowl committee chairs’ salaries often exceed $100,000 a year; with some chair’s salaries equaling 10% of total revenues.

Add this to the fact that these things were designed to increase revenue for the cities and areas that host them and it’s easy to realize that the financial motivation to continue the current system is quite significant.

People often point to the NCAA basketball tournament as a counter example to this argument- “March Madness” brings in a lot of money (particularly in advertising); wouldn’t a football tournament do the same? Yes, and no.

First, the revenue for the tournament starts with the NCAA, not in the hands of the special interests listed above. And, as CBS showed, in the hands of the networks that have the chance to air the programming. After all, why would CBS spend 6 billion to keep the tourney, or why would ESPN work to own five of the games (seriously)? However, the revenue might not come pouring in- ratings continue to decline for the current holiday games.

The second reality, though is that March Madness offers a very different product than would an NCAA football tournament, and that there are too many variables that would keep the same amounts of money in play. Remember, MM only takes three weekends for a team to play six games, and that there are numerous teams at one location (thus boosting the local revenue). A ticket to the early regionals allows fans to watch several great games; something that I can’t see bowl sponsors being excited about.

The other factor here is what I call the “Travel budget” factor. Remember, many bowls are vacation opportunities for teams from snowier climes- there’s a reason why Buckeye fans and Husker Nation travel so well. The idea of a tournament presupposes that these fans will go to the first and second and third rounds at the same rate that the currently flock to Pasadena or Miami. However, realistically this is pretty unlikely. Where money will be lost is when a group of fans waits to go to the second or third round, and their team is upset in the first game- Those vacations won’t be happening, and that revenue won’t be realized. It’s much more profitable for 64 teams and fanbases to go to 32 games at three locations than to hope that these same ones travel to multiple games.

On this latter point, I would also point to the fact that bowls continue to struggle to be profitable for the institutions involved. Schools continue to foot the bill for unsold tickets, which eats into their ability to justify this process. One of the ESPN Bowls even gave free tickets to area residents, and then required everyone to sit on the side opposite of the camera for the illusion of a full house.

And this is where, as earlier stated, I was wrong. Bowl games are not a cash cow for teams involved; instead they end up costing these institutions incredible amounts of money. Over half of the teams involved in “Bowl Season” actually lost money for their participation.

Again, the OC Register report highlights this best, and points to the fact that their 2006 national championship actually cost the Florida Gators $3.7 million dollars- and they only received $2.24 million for expenses (good to see that they lost something that night). The SEC got a total of $17 million to be split among the teams in the conference; so in effect it would have been more profitable to have been Vanderbilt and not have been bowl eligible. And you wonder why Notre Dame fans can actually point to 2007 as a success, and why they aren’t bent out of shape not going to a game this year.

For a playoff, multiply these expenses for every round and the magnitude of the problem shines brightly. Especially in an era where opportunities for student athletes are cut to comply with Title IX and budgetary concerns, the excess of the current system and the impact on athletic departments becomes all the more damaging. In spite of the fact that athletic departments appear to be cash cows for Universities, the fact is that there are only a few schools that are profitable- others are still reliant on tuition and state/federal funding.

While it appears that there are more than enough cause for reform, the money involved is way too significant for any significant change to be attempted. Bowls are about profit, and not for the schools. College football (well, and basketball too) should be recognized for what it is- an apprenticeship for young adults who may make a career out of professional sports. An apprenticeship that has an immediate benefit for the institutions who are “hosting” the student athletes (although, some have used words like “sweatshop” and “plantation” and “exploit” instead of “apprentice” and “host”).

Which is why, to be honest, my cynicism is raised when Congress talks about making the NCAA create a playoff. If they were really serious, and not just posturing, their first step would be to revoke the tax-exempt status of bowls by recognizing them as corporate entities rather than “educational endeavors”.  But, like I said, it’s just politics as usual by the folks who are more interested in re-election than in really making changes. Especially now that there’s money involved on the other side as well.

Let me sum up:

1. The NCAA has never had a national champion for college football
2. Bowls have never been about championships or playoffs (only money; first from tourism, now from television)
3. The NCAA is limited in their ability to change the bowl process and create a playoff now due to legal, historical, and financial precedents
4. The money involved in bowls only benefits a few institutions; those who are already financially stable, typically larger schools
5. Other schools’ bowl experiences are paid for with educational dollars (tax/tuition revenue)
6. The real money in the bowl system is the tourism dollars, the “Bowl Committees” and “Boards of Directors“- These dollars are tax free
7. Congress is “interested” in “fixing” things, but isn’t willing to do so in tangible ways due to their “boosters”- Bowl committees who give money to political re-election campaigns- unless it’s fiscally beneficial to do so

So, what does that mean? It looks like the road do a playoff is going to be an uphill one.

Does that matter, though? In my next post, I start preaching blasphemy by asking the question- “Do we really need a national champion?“