Monday, January 08, 2007

A game worth tens of millions of dollars (too bad the athletes won’t see a dime)

The Ohio State Buckeyes and the Florida Gators meet tonight for the BCS National Championship, a game that will generate more than $34 million for the Big Ten Conference (where the Buckeyes call home) and the Southeastern Conference (the home of the Gators). The dollars and sense only begins with tonight’s game.

Tonight’s game marks the end of a three week college football bowl extravaganza that featured 26 different bowl games with hundreds of millions of dollars being generated. At the end of the day the marquee attractions, the college football players are left with memories, goodie bags and little else. The players on both teams in tonight’s game received portable XM satellite radios with a 12-month subscription and a commemorative watch from Tourneau (total value $500).

According to the Football Bowl Association, this year's 31 bowl games will generate $210 million for NCAA schools. Over the last six years, bowls have paid schools $900 million, the association said, and it estimates bowl payouts will grow to $2.2 billion over the next 10 years.

Meanwhile, the Phoenix area expects to reap $350 million in tourism revenue from its three bowl games this year - the Insight, the Fiesta and the BCS title game.

Plus, Fox is in the first year of a four-year deal that will pay the BCS $320 million for the broadcast rights to the Fiesta, Orange and Sugar bowls from 2007-10 and the national title game from 2007-09.

"In all honesty, one of the most exploited groups of people in the country — not in the world, but in the United States — are college athletes," Ohio State receiver Anthony Gonzalez told The Columbus Post Dispatch . "We basically have a job that generates millions and millions and millions of dollars, and at the end of the day, don’t really see any of it. But that’s the reality. There is nothing you can do about it."

Gonzalez, an academic All-American, acknowledged the education aspect should not be discounted, despite the time demands of playing major college football. A full four-year athletic scholarship to Ohio State is worth an estimated $125,000.

"The fact you are given an education and it’s up to you to make the most of it, I don’t feel we’re exploited academically at all," Gonzalez said. "As for the time demands, part of being a student-athlete in high school, middle school, what have you, is finding a way to make sure you do your very best at both things. That’s why it is so well respected in the job market."

Asked for a reaction, Ohio State coach Jim Tressel told The Columbus Post Dispatch, "I don’t think I would say ‘exploited.’ We have 36 sports (at OSU), almost a thousand athletes, most of whom don’t generate anything, and they’re getting a pretty good situation. Now those that happened to be blessed to be in the sports that do generate (money), I for one think you should be grateful for the fact you’re getting to help those other 900 and something.

"But no, I wouldn’t say exploited. If that were the case, maybe 18-year-olds would go start a league and see how they do."

Tressel’s comments are made even more ‘interesting’ when you consider his current annual salary at Ohio State is $2,012,700. Tressel is the sixth highest paid coach in Division I football. According to the USA Today, if the Buckeyes claim their second national championship under Tressel, a win hands Tressel the combination of the vault at Ohio State.

"If Coach ... wins such game," a clause in his contract reads, according to a USA Today study of football coaching salaries, "Coach and the University agree to begin negotiating, in good faith, the terms for a new employment agreement that would supersede this agreement." Tressel for his part makes no apologies for the multi-million dollar contracts universities are offering coaches at elite level programs.

"I think that the market has been extraordinary for a long time," Tressel rationalized to reporters in Arizona. "I don't think it will have a ripple effect."

"I think the market has been extraordinary for a long time," Tressel said. "When coach (Earle) Bruce came to work here, he was making $40,000 (in 1979), and it wasn’t that long ago. But will this have any particular new bump on it? I doubt it."

The athletic department operates like a big times business in Columbus. Ohio State’s enrollment stands at 52,000 the largest in the United States. According to a report in Friday’s USA Today, the school became the first with a nine-figure athletics budget last year, spending $101.8 million, according to filings with the NCAA and the federal government.

Playing in a stadium that seats more than 102,000 (an average ticket price of $56) the football program generated a profit of more than $28 million last year – Tressel’s football team is why Ohio State can afford to offer 36 men’s and women’s varsity sports, again more than any other Division I athletic program. That's 16 more than the average in NCAA Division I-A.

According to the USA Today report, Ohio State's $104.7 million in athletics revenue a year ago also ranked first. The athletic program as a whole turned a $2.9 million profit, its fiscal filings show, and is self-supporting. Ohio State football generated $60.8 million last year, finishing $28.5 million in the black, according to its NCAA and federal filings. Men's basketball (currently a strong favorite to make it to the Final Four) was the only other money-maker, finishing a 26-win, Big Ten Conference championship season $7.6 million in the black. Those two sports finance Ohio State's 34 others. And "as the football team goes," Ohio State AD Gene Smith told the USA Today, "the whole thing goes."

After beating then undefeated Louisville 28-25, Rutgers believed their football program was headed for a BCS appearance and a $14 million appearance fee (shared by all Big East member schools). Losses at Cincinnati and West Virginia Rutgers ended up at the Texas Bowl and an appearance fee of $750,000. In a classic example of not being careful what you wish for, Rutgers University has invested tens of millions of dollars in their football program hoping success of the gridiron will help the school realize the riches Ohio State and Florida are about to enjoy.

Rutgers hired Athletic Director Robert E. Mulcahy III as athletic director in 1998, under Mulcahy’s leadership the athletic department has gone on an amazing spending spree. Spending has nearly doubled to a record $41 million last year in only seven years. A third of the budget is dedicated to the football program, a program filled with some very interesting perks.

Last year, $239,000 in recruiting costs included $31,640 spent at ESPN Zone, a dining and entertainment center. For home games, rooms for players and coaches, food and rental of audiovisual equipment at the East Brunswick Hilton cost Rutgers more than $165,000. An additional $8,000 was spent busing the team between the training center and hotel.

"It's a straight upward line for the football team and a straight downward line for the academic and physical conditions here," Richard Gundy, a statistics professor at Rutgers told the Bergen Record. "This is a political issue, not only within the university, but it should be a political issue in the state."

"Real students are being marginalized and cheated in 100 different ways," said William Dowling, an English professor and longtime critic of Rutgers' Division I-A buildup. "Now the financial situation makes more dramatic what big-time athletics does to an institution."

How differently the faculty at Ohio State see the ‘benefits’ of a college athletic program. The Ohio State athletic department (again unlike Rutgers 100 percent financially self sufficient) also contributes $1.1 million yearly into the school's general fund, offsetting state funding cuts. Or that it has pledged $5 million over five years to the Ohio State library.

"If you asked the faculty to list the concerns they have," Allan Silverman, a philosophy professor who heads Ohio State's Faculty Council told the USA Today, "I don't even know that athletics would appear in the top 10."

"Everybody in this day and age who's in public education — public, large-school education — has to worry about capital campaigns and endowment drives," Silverman continued. "We'll welcome all the help we can get from national championships in any sport."

"We all deserve more money," Ohio State senior guard T.J. Downing said in an Associated Press report. "We're the reason this money's coming in. We're the guys out there sacrificing our bodies. We're taking years off our lives out here hitting each other, and we're not being compensated for it."

"I've got to admit, sometimes I look in my hand and look in their hand," Florida defensive tackle Joe Cohen said, referring to the Bowl Championship Series. "I believe players should get a little bit more than what they're getting. I don't want to sound like I'm greedy. It's just reality."

"I believe players should be paid, because I'm broke."

"I can't sit here and say, 'Hey, I need more money,' because the money they're giving us for college, and money they're giving us for rent, the money we're getting for food is plenty enough for me," Ohio State sophomore linebacker Marcus Freeman said. "But you see people at the next level (the NFL) doing the same thing, and then you hear how many millions that the school is getting for playing in a game like this, and you're saying to yourself, 'Man, give us just a little bit more."

For their part the University of Florida will be ready to cash in if the Gators win tonight’s game. Gator Nation is living in rare stratified air. Billy Donovan’s Gator basketball team won the NCAA men’s basketball championship last April and had that teams’ entire starting five returned to defend their first NCAA basketball championship.

According to a report in The South Florida Sun Sentinel, Florida expected to receive about $2.24 million in revenue from its national championship game appearance, most of that will be spent on ferrying, lodging and feeding the players, band, cheerleaders and 59 athletic-staff members attending the game, according to Steve McClain, UF sports information director. He said about $78,500 will be pumped back into the athletic budget (remember the $14 million BCS payout to the SEC is shared by all member institutions, as is the $14 million LSU received from appearing in the Sugar Bowl).

The benefits come not only in winning, but in creating tremendous brand awareness for the school and the athletic department increasing alumni donations and enrollment.

"We're very proud," said Paul Robell, UF vice president for development and alumni affairs in the South Florida Sun Sentinel report. "Not only is Florida a football school, but we are now a basketball school."

Robell said UF studied the effect of its first football championship in 1996.

"We could not really trace that to any increase in donations to academic programs, but we did see an increase in donations to athletic programs," he said.

UF, which has 50,000 students and 350,000 alumni, saw a jump in donations last year, but the school is 18 months into a projected seven-year capital campaign in which it hopes to raise $1.2 billion, Robell said.

As of the fiscal year that ended June 30, UF had received $161 million in donations across the board compared with $128 million the previous year, Robell said.

"What athletic success does is create awareness," said Rae Goldsmith, vice president of communications and marketing for the Council for Advancement and Support of Education, a Washington-based professional association for college fundraising, alumni relations and communications officials. "It still has the power to build pride, and pride goes a long way with the graduates of an institution."

And according to the Sun Sentinel the aftermath of the Gators basketball first national championship in April produced a bountiful financial harvest in merchandise sales. During the 2005-06 school year, UF took in a $3.2 million in royalties, including about $500,000 in basketball national championship merchandise. That's up 43 percent from $2.2 million in 2004-05, according to the Collegiate Licensing Co., which helps more than 200 colleges and conferences manage their licenses.

UF gets an 8.5 percent royalty on the wholesale cost -- typically half the retail price -- of everything from shirts and hats to shoes, furniture and key chains that bear the university's name or logo. For the fall quarter, before UF was headed to the football title game, royalties were up nearly 20 percent from a year ago.

The Texas Longhorns, who won last year's football national championship, brought in a record-breaking $8.2 million in merchandise royalties for the 2005-06 school year. The school receives an 8 percent royalty on most merchandise and 12 percent for national championship gear

Royalties at Florida's BCS opponent, Ohio State, which also receives 8 percent, are already pacing ahead of last year's record $5.7 million.

Enjoy tonight’s BCS title game, and if you have a few moments consider the staggering financial numbers and revenue generation this game is really about. There may be a great football game tonight and a few college students who happen to play football may have the ‘game of their lives’, but the untold riches that will be realized from tonight’s game will go directly (without passing go) into the coffers of the athletic departments of Ohio State and Florida University.

For Sports Business News this is Howard Bloom. Source cited and used in this Insider Report: USA Today, Associated Press, South Florida Sun Sentinel and The Columbus Post Dispatch

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