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SBJ/20100125/This Week's News
The BCS' Big Split
Published January 25, 2010
The Bowl Championship Series will distribute $142.5 million of revenue from its five bowl games, with 81 percent of it — $115.2 million — going to the big six conferences.
The majority of the rest — $24 million — goes to the coalition conferences: Mountain West, Western Athletic, Conference USA, Mid-American and Sun Belt. Notre Dame, as an independent member of the BCS, takes $1.3 million.
Sound a little uneven? Not really, says BCS Executive Director Bill Hancock. Schools from those big six conferences accounted for eight of the 10 teams in the BCS bowls, so those conferences should take roughly 80 percent of the total payout.
“It’s a fair and appropriate distribution of the revenue,” Hancock said.
The distribution is based on a formula created in 2004 by the BCS commissioners and approved by the BCS Presidential Oversight Committee. The revenue distribution has varied little over the four years of the most recent media contract with Fox, which pays an average of $82.5 million annually. The media deal accounts for most of the revenue, while the rest comes from revenue generated by the Sugar, Rose, Fiesta and Orange bowls, and the national championship game.
Starting next year, the payouts will be even more, thanks to a new four-year rights-fee deal with ESPN that will average $125 million a year, all of which is distributed to the schools.
The money is paid annually by an escrow agent, Heartland Bank of Leawood, Kan., and each year’s distribution completely empties the account, Hancock said, meaning all of the revenue is distributed.
But wherever the BCS goes, controversy is sure to follow and it’s no different when it comes to distributing the revenue. Not everyone agrees with the BCS’ method of dispersing funds, mostly those from the coalition conferences.
It’s really a question of value, says WAC Commissioner Karl Benson. When a Utah shocks an Alabama or a Boise State stuns an Oklahoma, doesn’t that demonstrate the value of those teams and conferences to the BCS? Shouldn’t the payout to the conferences like the WAC and the Mountain West that send teams to the BCS look like the payout to the big six conferences?
No, responds Harvey Perlman, chancellor at the University of Nebraska and chairman of the BCS Presidential Oversight Committee. He says there’s a difference between playing well in a game and demonstrating the kind of value that drives long-term media contracts.
“Those teams have certainly performed well, but you’re talking about adding value,” Perlman said. “The real question is whether including those conferences when you negotiate a TV contract adds to the willingness of the network to increase the bid. I don’t think we’ve seen evidence that that’s true.”
The BCS’ tie-ins with its bowls and the traditional strength of the big six conferences are what drive the value of the property, Perlman said, “not an individual team or performance.”
This year’s Fiesta Bowl pitting coalition conference members TCU and Boise State on Fox drew an 8.2 rating, which is less than the 10.4 Ohio State and Texas got in the Fiesta Bowl the previous year. Both games were played on a Monday night. TCU-Boise State generated the second-highest rating of the three BCS bowls on Fox this year, just behind the Sugar (8.5) and well ahead of the Orange (6.8), both of which featured teams from the big six conferences.
The Fiesta’s attendance of 73,227 was higher than the previous two Fiesta Bowls, which again featured teams from the big six conferences.
“When given the opportunity, we’ve shown that these teams deliver,” the WAC’s Benson said. “We believe that teams like Boise State and TCU have become an important piece to the BCS.”
In breaking down the revenue distributed by the BCS, the Big Ten and the Southeastern Conference are the big winners. Each league put two teams — Ohio State and Iowa from the Big Ten; Alabama and Florida from the SEC — into BCS bowls, meaning those two football-mad leagues will each receive $22.2 million.
The other leagues that qualify automatically into the BCS — the ACC, Big 12, Big East and Pac-10 — each receive $17.7 million, accounting for $115.2 million to be distributed among the big six conferences’ 65 schools. Conferences typically share their BCS and other bowl revenue evenly, although the Big 12 is an exception and pays more to the bowl teams.
A bonus of $4.5 million is paid for each additional team that makes a BCS bowl, which is why the SEC and Big Ten made more this year.
“When you talk about adding value, from a media standpoint, the Boise States and the Utahs add very little,” said Barry Frank, a media consultant from IMG who worked with the BCS on its new TV deal with ESPN. “They’re not population centers. And speaking from a personal standpoint, in football terms, I can tell you that networks look at them as ‘Johnny-come-latelies’ to the national scene that don’t play the kind of schedules that major conferences play.”
A total of $24 million goes to the five coalition conferences from the BCS this year. There’s a $9.75 million payout that’s automatic each year, another $9.75 million because TCU earned an automatic berth into the BCS based on its ranking, and another $4.5 million for the inclusion of a second team from the coalition, Boise State.
Once the BCS pays the $24 million to the coalition conferences, it washes its hands of the distribution. The breakdown of that money among the five conferences, which account for 50 schools, is determined by a complicated distribution method that the coalition leagues voted on four years ago.
The Mountain West will receive $9.8 million, while the WAC takes $7.8 million and the rest goes to Conference USA ($2.8 million), the MAC ($2.1 million) and the Sun Belt ($1.5 million). TCU is a member of the Mountain West, while Boise State is in the WAC.
As the BCS moves into a new media contract with ESPN, those five coalition conferences will review and possibly change their distribution. What’s not known — and Mountain West Commissioner Craig Thompson won’t talk about it — is how vigorously the MWC will move for a new distribution system that pays more to the coalition conferences that send teams to a BCS bowl. Thompson wouldn’t comment on his plans.
There’s another scenario in play that could greatly enhance the MWC’s status and perhaps move it onto the same level with the other big six conferences that receive automatic berths into the BCS.
The Mountain West is two years into a four-year evaluation period that measures conference power. It’s based on the strength of the league champion, how many teams are rated in the BCS top 25 and average ranking for the entire conference.
The BCS has not fully divulged what thresholds must be met for the MWC to gain an automatic qualifying berth, which makes the whole process sound eerily like joining a fraternity. But if the MWC could join the big six club, membership would have its privileges and its annual BCS revenue would likely double.
“We look at consistency over time,” Nebraska’s Perlman said. “Looking forward, I don’t know that they change the equation, but certainly their performance over time makes it difficult to not look at them.”