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SBJ/June 9-15, 2014/CollegesPrint All
The new College Football Playoff is going to look a lot different than the old BCS, both on the field and off.
Two more brands that were closely linked to the BCS — Discover and Tostitos — have told ESPN that they are ending their title sponsorship of playoff bowl games. Capital One, meanwhile, is in the final stages of negotiations to fill the void at the Orange Bowl, and ESPN still is looking for a sponsor to take the Fiesta Bowl position.
Discover has been the title sponsor of the Orange Bowl for the last four seasons, but the bigger surprise is Tostitos, which is set to end its 18-year association with the Fiesta Bowl, according to industry sources. The Frito-Lay brand enjoyed one of the longest-running title sponsorships in college football, but recently it advised ESPN, the CFP’s rights holder, that it doesn’t plan to renew.
Tostitos has been the title sponsor of the Fiesta Bowl since 1996.
Photo by:GETTY IMAGES
Industry sources are not sure why Tostitos opted out, although the price increase on the title sponsorship could have played a role. Title sponsorship deals in the old BCS annually ran in the $15 million to $20 million range. Sources say that CFP title sponsorships are closer to $25 million a year, and ESPN is seeking six-year commitments.
ESPN would not comment on the moves or on any details of its sales progress.
The Orange and Fiesta bowls are part of the six-bowl CFP, which beginning this season will determine the national champion as part of a four-team playoff format. The semifinals will rotate among the six bowls in the CFP.
In April, SportsBusiness Journal reported that Northwestern Mutual would replace Vizio as the presenting sponsor on the Rose Bowl, a move that marked the first shift in bowl sponsorship positions.
The addition of Capital One to the CFP shouldn’t come as a surprise, given its deep relationship with ESPN and college football. The credit card division of the bank sponsors Capital One Bowl Week each December, while also sponsoring the bowl game in Orlando formerly called the Citrus Bowl.
That Orlando bowl sponsorship is expected to end once Capital One closes its deal for the Orange Bowl. Capital One had sponsored that game, which is considered among the most elite non-CFP bowls, since 2001.
Capital One also has a significant buy with ESPN through its NCAA corporate champion deal that gives it presenting sponsorship of the College World Series, as well as the Women’s College World Series, among other NCAA events.
Sources indicate that Capital One and ESPN have agreed on most terms for the Orange Bowl and they expect a deal could be announced as soon as this week. Byron Daub, Capital One’s senior director of sponsorships, is running point on the negotiations with ESPN. Ed Erhardt, president of global sales, and Rob Temple, vice president of sports management, have led the sales efforts for ESPN.
With title sponsorship of the Orange Bowl, which is played in Sun Life Stadium, Capital One would join a list of CFP title sponsors that include Chick-fil-A in Atlanta and Northwestern Mutual at the Rose Bowl, among those ESPN has announced. No formal announcements have been made about Allstate at the Sugar Bowl and AT&T at the Cotton Bowl.
Perhaps no title sponsor has been as closely linked to a bowl game as Tostitos, which first sponsored the Fiesta Bowl in 1996. That connection between sponsor and bowl reached a crescendo in the January 2011 national championship game between Oregon and Auburn. Just before Auburn’s kicker Wes Byrum approached his 19-yard field goal to win the championship, ESPN announcer Brent Musburger told the largest audience in cable history, “This is for all the Tostitos.”
It’s been six months since Temple University announced that its athletic department would eliminate seven sports. The decision sparked immediate debate: Was it the fault of the football program for not generating more revenue, or was it the fault of Title IX for making the cuts more heavily male than female (although rowing and softball were both cut from the women’s side)?
Advocates quickly organized, and since then, crew and rowing have been saved. But Temple is marching forward with eliminating the baseball, softball, men’s gymnastics, and men’s indoor and spring track and field teams, affecting approximately 162 student athletes in a move projected to save the athletic department $3 million annually.
Baseball is one of several sports that Temple is eliminating.
Photo by:AP IMAGES
But when it comes to discussing where Temple athletics might be in the future, it’s Rutgers that provides the clearest picture among programs
College writer Michael Smith and editor Tom Stinson give their thoughts on SBJ's Division I athletic director survey, as well as on Duke's Kevin White winning Athletic Director of the Year.
It’s a different story than many would assume. Namely, it hasn’t been about spending more on football. Since the select sports were cut, 13 other teams at Rutgers rank ahead of football in terms of percentage increase of expenditures. The reason: A key piece to this overall story is the pressure to more fully fund scholarships in every sport an athletic department sponsors.
The NCAA sets a limit on the number of scholarships that can be offered in each sport. Being “fully funded” means the athletic department is funding the full limit of scholarships for that sport. To play football at the Football Bowl Subdivision level, 90 percent of the 85-scholarship limit must be met over a rolling two-year period. However, there are no such funding requirements for other sports. Given that grants-in-aid (the total spent by an athletic department for a student athlete’s tuition, room and board) represent one of the two largest expenditures for many athletic departments (coaches’ salaries being the other), grants-in-aid can be an easy area to trim when it’s time for budget cuts.
What schools like Rutgers and Temple have found, however, is that not fully funding a sport affects recruiting and, thus, team success. All of the major programs that have made cuts, or considered cuts, in recent years have emphasized the need to fully fund their remaining teams. Although the central story line among the general public seems to revolve around the athletic department choosing football over the cut sports, empirical data suggests otherwise.
In 2006, when Rutgers announced its cuts, none of the Scarlet Knights’ women’s sports was fully funded to NCAA scholarship limits, and some were not even close. Move ahead five years, and Rutgers was much closer to its goal of fully funding its women’s programs (see chart below).
Photo by:AP IMAGES Photo by:AP IMAGES
Although the hike Rutgers experienced was significantly higher than the national average, the rising cost for tuition, room and board is something athletic departments must take into account when planning and budgeting for the future. According to The College Board, annual growth rates for tuition, room and board have increased from an average 2.3 percent annually during the decade that ran from 1983-93, to 2.9 percent annually from 1993-2003, to 3.2 percent annually over the past decade.
At the same time, throughout the 1980s and 1990s, many programs added sports under the implementation of Title IX, with women’s sports moving under the NCAA’s umbrella from the Association for Intercollegiate Athletics for Women. In 1981-82, the average Division I athletic department supported 389 student athletes (274 men, 115 women), but by 2012-13, that number had leaped to 511 athletes (274 men, 237 women). Since 1988-89 alone, 761 new women’s teams have been added to Division I programs.
Recently, schools have started to see the bubble burst. The enormous growth in revenue in college sports has struck head on with the leaps in the cost of tuition, room and board, not to mention rising costs in other areas like coaching salaries and facilities construction. Even the exponential growth of television revenue hasn’t allowed schools to keep up. They found themselves at a crossroads: reduce expenditures for teams or reduce the number of teams in order to more fully support remaining teams.
Like Rutgers, Temple officials publicly have said their goal is to better serve the school’s remaining student athletes by not stretching the department’s budget so thin. At a time when Temple also is dealing with Title IX inquiry, the school plans to turn much of its focus toward its women’s sports.
“[In] 2014-15, all of Temple’s women’s sports will be fully funded in terms of scholarships allowable by NCAA rules,” said Larry Dougherty, Temple senior associate athletic director. “Additionally, all of our women’s sports teams will be provided with monies for summer school.”
So what does it matter if Rutgers funded 11.04 of its 12 available women’s volleyball grants-in-aid in 2012 instead of the 7.32 it funded in 2007? Besides the additional aid awarded to student athletes, coaches say fully funding to NCAA scholarship limits makes a difference in a program’s ability to recruit the best athletes for those teams.
“You need to have [scholarships fully funded to NCAA limits] to be a successful program because you’re able to recruit more athletes and get better athletes, and your program grows,” said Jerritt Elliott, head women’s volleyball coach at the University of Texas. “As your program grows, hopefully you’re getting more wins and you’re more successful because you have that money to fund the program properly.”
Marty Beall, head women’s soccer coach at the Big South Conference’s High Point (N.C.) University, knows Elliott is right. But unlike Elliott at Texas, Beall’s program is not fully funded to NCAA scholarship limits.
“That’s a major impact on recruiting,” he said. “We literally just lost a kid: The conversation I just had — the parent said the family couldn’t afford it. We can’t offer more because of our budget.”
Those top recruits and coaches can’t be wooed with fully funded scholarships alone, though. They’re also looking for the best facilities, trainers, coaches and equipment, along with other resources.
When Rutgers announced it was eliminating teams, the athletic department had 714 student athletes and $44.8 million in expenses, totals that translated to $62,773 in spending per student athlete. To put that in perspective, Texas, with one of the largest budgets in college athletics, had $100 million in expenses and just 525 student athletes that same year — meaning more than $190,000 being spent per student athlete. By 2012, Rutgers’ spending per student athlete had increased 67 percent, to $104,638, just below the $107,677 average for public universities with FBS football programs thanks to approximately 100 fewer student athletes but nearly $20 million more in its budget.
In deciding to eliminate sports, one concern expressed by Temple was its spending per student athlete in comparison to its conference peers. Although Temple’s budget falls close to the American Athletic Conference average, Temple is second only to Connecticut in the number of student athletes it supports and ranks last in average spending per student athlete (see chart above).
Texas, which posted an NCAA-leading $165.7 million in revenue last year, had just 16 more student athletes than Temple despite bringing in substantially more revenue. Florida, with the fourth-highest revenue mark in the country, had 63 fewer student athletes. In fact, Temple ranks 74th in the FBS for total athletic department revenue but 30th for number of student athletes it supports.
Many other programs that rank in the top 20 among public schools for revenue generation supported fewer student athletes than Temple, including Oklahoma (541 students), LSU (481), Auburn (503), Arkansas (462), Georgia (570), Louisville (568) and Kansas (524).
The end result of attempting to support such a large number of student athletes on a comparatively small budget is twofold: Spending per student athlete is low compared to peers, and spending on each individual sport falls short of other conference members. For example, expenses for Temple baseball in fiscal year 2012 were $733,978, bottom among Temple’s fellow American Athletic Conference schools and far below the $1.3 million average for those schools. Temple’s men’s tennis and soccer teams and its women’s volleyball, soccer, softball and rowing programs also spent the least of any respective conference member. Football was the only sport at Temple where expenses came in above the average.
Temple must now deal with cost increases such as rising rent at Lincoln Financial Field.
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Of course, things aren’t that simple; expenses don’t stay stagnant. Temple, for example, recently revealed the Philadelphia Eagles, who rent out Lincoln Financial Field to the university for its home football games, are seeking to double the rent and are asking for a $12 million upfront payment.
The part of the Rutgers story Temple will need to turn its attention to now is increasing revenue to cover future increases in expenditures, like the ones likely for continuing to lease Lincoln Financial Field or building an on-campus stadium. Rutgers has more than doubled ticket revenue since it cut sports, and contributions have nearly doubled as well. Both of those revenue sources were driven by football, which in 2005 under then-head coach Greg Schiano had its first winning season since 1992. The Scarlet Knights went on to have five consecutive winning seasons and completed the 2006, 2007, 2008, 2009 and 2011 seasons with bowl game wins. The school shared the Big East Conference title in 2012.
If Rutgers is truly the model for restructuring an athletic department stretched too thin, cutting sports alone won’t be enough at Temple — but it’s a start.
Kristi Dosh is a freelance writer who previously was a sports business reporter for ESPN. She is also vice president of public relations for public relations and content marketing firm Reputation Ink.