The Business of Bowl Games: It’s All About Money

The New York Times recently published a provocative article on the swindle…err, business of the Bowl Championship Series (BCS) and college bowls:

Statistically, the system is such an abomination that at least one expert…advocated that no self-respecting statistician should have anything to do with it…he wrote that the B.C.S. computer rankings serve as little more than a confirmation of the results of the two opinion polls the system also uses to create its rankings. The people who run the computer rankings, he noted…are not allowed to use the score or site of a game in their calculations.

Under the rules, the championship teams of the Atlantic Coast, Big 12, Big East, Big Ten, Pacific-10 and Southeastern Conferences go to the B.C.S. automatically. This season, the first team in each conference to qualify receives $18 million — win, lose or draw — and that money is distributed in that team’s conference. If a second team from a conference qualifies, the conference shares an additional $4.5 million.

But the rules for the other five conferences are different. One champion from one of the non-B.C.S. conferences gets in if it is ranked in the top 12 or ranked in the top 16 but higher than a B.C.S. conference champion. Boise State went 12-0, won the Western Athletic Conference and finished the regular season ranked ninth in the B.C.S. For this, the Broncos earned a trip to the inventively named San Diego County Credit Union Poinsettia Bowl and collected $750,000 — a set of steak knives compared with the Cadillac that is a B.C.S. berth, even after sharing the revenue.

“The six big conferences don’t want to share money with the smaller conferences,” (expert) Stern said. “That to me is the story that people don’t tell.”

After the derivatives crisis, Enron, Madoff, and other recent Great American money-mongering schemes, the BCS remains intact. According to this chart, the Pacific Life Holiday Bowl, the Tostitos Fiesta Bowl, FedEx Orange Bowl, Rose Bowl presented by Citi, Allstate Sugar Bowl, and the BCS National Championship Game (with rotating sponsors) have a payout of $17 million each, for a total of $85 million. Compare that to the 30+ non-BCS bowl games that take place posteason. Their payouts total roughly $43 million.

More:

in the best-case scenario schools from the non-BCS conferences would receive approximately 34% of the least of the schools in the BCS conferences, including Notre Dame. These numbers are not the actual amounts paid to each school, but look at the amounts paid to each school on average.

The BCS Media Guide claims that over the first 10 years of the BCS arrangement, a total of $100 million has been given to the 51 non-BCS Football Bowl Subdivision schools and the 122 Football Championship Subdivision schools. This gives an average of $10M/year, or $58,803 per school year. By comparison, EACH BCS conference (between eight and twelve schools) is guaranteed $18 million this year, an average of $1.66M per school for the 65 participating institutions. These disparities are clearly defined within the Media Guide.

Why not a playoff, like every other sport in the NCAA? The BCS isn’t a requirement of the sport at all; rather, it is a corrupt financial system that rewards those in the club, propogates mediocrity, and often fails to decisively decide the best team in the nation.

Jordan Kobritz at The Guiding Light of the Sports Business has this to say:

A playoff is held in every other football division and every other NCAA sport. But the BCS isn’t affiliated with the NCAA. The six conferences that comprise the BCS broke away from the governing body in the aftermath of a 1981 lawsuit brought by the Universities of Oklahoma and Georgia.

The major football schools wanted to divvy up the TV and bowl money among themselves, without contributing to the NCAA’s revenue sharing arrangement. Any reversal of course that includes a playoff system would most likely require the participation of the NCAA. Which makes the idea of a playoff a non-starter for BCS schools.

The reality is BCS conferences don’t need the bowls, whether they use the present system to determine a “national champion” or conduct a playoff. They proved as much when they began staging conference championship games – in effect creating their own “bowls” – which have turned out to be extremely profitable. To wit: The 2007 SEC championship game grossed $13.7 million in revenue and distributed almost $12 million to conference schools, according to Yahoo!com.

So why allow yourself to be ripped off by the existing bowls? The answer has nothing to do with tradition or the sanctity of the bowls. The current system suits the BCS conferences just fine. They get to decide who gets how much money and they don’t have to deal with the NCAA. In this case, power is more important than money.

Let me get this straight. The polling system that decides who attends BCS bowls is notoriously faulty. The payouts for attendees of those conferences–and, even more, the BCS itself–are ridiculous in comparison to non-BCS games. BCS championships attract more sponsors, viewers, and promotions than any of the others, providing incentive for those profiting most off the system to maintain it.

This very well may be one of the most blatant lacks of oversight remaining in the American economy. If Obama pushes around his weight here, it will be welcomed.