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The Great Divide PDF
The Great Divide PDF
ABSTRACT
The focus of this study is to examine the dispersion of football-generated
revenue amongst Football Bowl Subdivision (FBS) teams. This article seeks
to determine if parity exists in the ability of all college football teams to
generate revenue, and to determine the impact on the competitive
balance of the sport. The results of this study indicate that there is a major
stratification among affiliation status (automatic qualifying versus non-
automatic qualifying) and within conferences. Further, the data indicates a
cycle of inequity in college football. This study quantifies the perception of
inequality and recommends means to correct or control this disparity
moving forward.
INTRODUCTION
The advent of the Bowl Championship Series (BCS) in college football has allowed the sport
to blossom from a national pastime to a multi-billion dollar business. Teams and their
respective conferences are no longer just competing for championships on the field; they are
pit against one another in a race for increased revenue and profitability. Athletic departments
have come to rely more heavily on the funds generated by their football programs. Fulks [1]
reported that in 2004 and 2006, football generated revenue accounted for 43% of the athletic
department’s total revenue; this figure jumped to 45.8% in 2009. Given the expansion of the
BCS, exploding television markets, and the rise of the popularity of the sport, this percentage
can be expected to have risen considerably in the last five years. The revenue generated from
the college football season is often important to fund and maintain traditionally non-revenue
generating sports within the athletic department [2]. Coupled with the need to upgrade and
maintain facilities, the desire to attract and retain the top players in each recruiting cycle, the
recent rise in head coaching and staff salaries, and the fact that athletic departments strive to
response to pressure from the fans, the media, and from college presidents of the non-AQ,
the BCS expanded from four bowl games to five bowl games in 2006, and, in theory, granted
greater access to the non-AQ schools. From the 1998 to the 2004 season, only one non-AQ
team (Utah in the 2004-2005 season) had been invited to participate in the BCS; since the
2005 season four non-AQ teams (Utah (2008), Hawaii (2007), Boise St. (2006, 2009), Texas
Christian (2009, 2010)) have been invited to participate in the BCS, although never for a
BCS Championship [5].
Dumond et al. [6] reported that BCS payout in 2004 had risen to over $14 million dollars
per team. According to Michael Smith of the Sports Business Journal [7], the BCS distributed
$142.5 million dollars from the revenue created by the five major bowl games following the
2010 season. This was thanks in large part to the annual $82.5 million dollar television
contract the BCS signed with Fox and the current four-year $125 million dollar a year contract
with ESPN [7]. The money is distributed based on a formula created in 2004 by the BCS
commissioners. The formula divides the revenue among the AQ, non-AQ, FCS schools, Notre
Dame, Army, and Navy and rewards teams which play in the bowl games with an extra payout
for participating in those games. As such, in 2010 the “Big Six” AQ conferences garnered
81% ($115.2 million) of the $142.5 million dollar pay-out, the non-AQ conferences were
awarded $24 million (nearly 17%) [7]. That percentage, however, was higher than normal as
the non-AQ had two teams (Texas Christian and Boise St.) participate.
The 2011 figures rose as the newly-negotiated television contract with ESPN allowed the
BCS to distribute a record $174 million dollars to its participating schools [8]. Again, the AQ
conferences shared the greatest portion of the revenue ($145 million or 83.4%), while the
non-AQ conferences were awarded $24.72 million (roughly 14%). The lion’s share ($12.75
million) of the revenue was awarded to the Mountain West Conference as they were
represented by Texas Christian in the Rose Bowl [8].
AQ conferences have continued to expand and upgrade their facilities, attract and recruit
better athletes, and coaches; as a result, the stratification between AQ and non-AQ schools
has never been more apparent. While non-AQ schools like North Texas and Florida Atlantic
have recently constructed new stadiums, most of the funding came as a result of bond issues
and not from philanthropic or donor-related funding as has led to many of the facilities
upgrades in the AQ schools [13, 14]. Schools like Alabama, Florida State and Auburn have
secured their coaches with multi-year, multi-million dollar contracts for not only their head
coaches, but some of their top assistants as well [15]. It becomes difficult for a non-AQ
school with limited funding to attract a top assistant coach when they may face a reduction
in pay to leave their current school.
Of greater danger to the balance in on-the-field competition is recruiting. Fulks [16]
reported that in 2001 the average cost for recruiting in Division 1-A across all men’s sports
was $373,000 per school. By fiscal year 2009, Fulks [1] reported that this figure had
increased to $488,000. Given the extreme competition for quality high-school athletes, the
expectation is that this number will continue to rise. To this end, data for the 2010-2011 fiscal
year indicate that the figure had risen to $549,043 [17]. Dumond et al. [6] surmised that
college football recruiting had fallen into a cyclical pattern where success on the field led to
greater success in recruiting, which called for continued success in the future. More
importantly, however, they found evidence to support the notion that recruits prefer to play
for BCS automatic qualifiers and that the added media exposure from the BCS gave these
AQ schools an advantage in recruiting. According to the Rivals recruiting database [18] only
one five-star recruit has signed a national letter of intent to attend a non-AQ school (2009
James Aiono was a junior-college transfer; as of 2011 Utah joined the Pac-12 Conference).
Coupled with the strain of decreased revenue, the lack of updated facilities, and the lack of
being competitive against the AQ conferences, the findings of Dumond et al. [6] tell a story
of the imbalance of competition and recruiting among all 120 members of the FBS.
There should be no denying the impact that recruiting has on winning. It can be
hypothesized that teams who on average recruit better athletes will win a greater majority of
their games. This formula for success poses another issue for the non-AQ schools. Several
studies have concluded that winning leads to increased contributions from alumni and donors
[19-21]. In addition, there is also a relationship between bowl appearances and increased
alumni and donor contributions [22, 23]. Thus, this alternative avenue for revenue could
place the non-AQ schools at a disadvantage if their performance on the field is sub-par or
fails to live up to alumni and donor expectations.
Facilities are an important variable in recruiting and revenue. Athletic departments across
the country have remodeled, and in some instances, expanded aging structures in order to
create a more pleasant experience game-day experience for fans. The University of Texas
spent $27 million on a stadium expansion and addition in 2009 [24]. Not included in that
figure was an $8 million video and scoreboard appropriately nicknamed “Godzillatron” [24].
The University of Alabama expanded their south end zone in 2010, adding 8,500 seats at a
cost of $65.6 million, which was $15 million less than their original budget [25]. Other
schools have recently erected new, on-campus facilities to try to appease fans and maintain
the status-quo in what can be seen as an “arms race.” Florida Atlantic (non-AQ school)
completed a new on-campus stadium with an estimated cost of nearly $70 million dollars
[13,14]. The University of North Texas (non-AQ school) also constructed a new on-campus
facility to the tune of $78 million [13].
Facilities are important not only for recruiting purposes, but also help to drive attendance
for home games; attendance is largely controlled by winning. Fulks [16] reported that 26% of
International Journal of Sports Science & Coaching Volume 7 · Number 2 · 2012 349
the total revenue generated by athletic programs in 2001 was from ticket sales. This number
fell slightly to 24% in 2009 [1]. While winning is important, it is equally important to draw
high caliber opponents to your home field. Leonard [26] reported that the quality of the teams
playing in a football game affected total attendance, and Price and Sen [27] concluded that
conference membership was an important variable in fan support. Finally, Fulks [16] found a
positive relationship between home game attendance and athletic fundraising.
Given the previous work, and the importance of revenue to program operation and
sustainability, this study seeks to expand on the findings of Fulks [1], Maxcy [3] and of
Sutter and Winkler [4] by examining recent trends in revenue for both the AQ and non-AQ
schools of the BCS. Specifically, the study addresses the following questions:
1. Does a difference exist between the AQ and non-AQ conferences in the total football
revenue generated collectively as a conference?
2. Does a difference exist in the amount of football revenue generated among the
respective schools within each conference?
3. Is there a correlation between conference affiliation and conference classification (AQ
vs. non-AQ) and the amount of football revenue generated?
On the surface there may appear to be discrepancies in the amount of revenue generated
across conferences and schools. Many believe that the rich have gotten richer; this study
seeks an answer to that assumption. Moreover, this study seeks to understand the causes of
discrepancies in revenue, and presents recommendations based on the conclusions formed
from the available data to help concentrate the gap between those schools and conferences
that have and those that do not have the advantage of automatically qualifying for the BCS.
METHOD
Football revenue data for schools participating in the eleven FBS conferences were obtained
from the Department of Education’s Office of Postsecondary Education. The data were
available from the Equity in Athletics Disclosure Act website, and 2010 conference
alignment was used. Football revenue from 2003 to 2009 was treated as the dependent
variable, and data were available for all schools except the U.S. Air Force Academy. Data for
Florida Atlantic, Florida International, and Western Kentucky were available for only the
years they participated in FBS football. Data for the University of Maryland was not
available for 2005, 2006, and 2007 reporting years. Independent Notre Dame, Navy, and
Army were not included in this study as they do not participate in a football conference.
Recruiting information was available from the Rivals Football website. Recruiting
information for the schools included in the study from 2004 to 2009. Average recruiting stars
earned in a recruiting cycle, an independent variable, was selected as it captures the overall
average of star ratings for all players added in the recruiting season. The average recruiting
stars earned is a measure of the total stars earned divided by the total number of players in
each respective class. This was selected as it is a reflection of the talent level of the entire
class, not a reflection of the total number of prospects signed.
Home game attendance was selected as an independent variable. This variable was
selected as it represents the total paid attendance for each respective school and takes into
account the varied methods schools take into determining actual attendance figures. Data for
the schools included in the study were captured from the NCAA website for the 2004 to 2010
season. Average attendance for the season was selected as the variable because schools play
a varied number of home games; thus, this measure captures a season perspective. Off-site
350 The Great Divide: Examining Football Revenue among FBS Schools
LIMITATIONS
The year 2003 was selected as a starting point for the study as this was the data available
through Equity in Athletics Disclosure Act (EADA) website. It should be noted that the
EADA website gathers information from respective schools and includes funds provided by
the institution in their calculations. As such, this is a limitation to the study as universities
that participate in FBS football receive various levels of institutional funds; moreover, some
universities receive no institutional funding. A further limitation to the study is that the data
are not adjusted for inflation. Finally, Virginia Tech, Boston College and Miami are
classified as Atlantic Coast Conference schools despite joining at different times since 2003.
In the Big East, Cincinnati, South Florida, and Louisville are also included despite having
joined the conference in 2005. This was done to maintain continuity respective of current
conference alignment. The data indicate, however, that each of these schools benefited from
the increased revenue that their new, respective conferences provided; thus, their revenue
prior to 2005, as it is not controlled for, is noted as a limitation to this study.
RESULTS
REVENUE ACROSS CONFERENCES
The average football revenue per conference from 2003 to 2009 was analyzed to determine
if there was a statistically significant difference among the eleven conferences studied. The
overall average for all conferences during the period of study was $17,189,517; however, the
standard deviation ($15,837,520) indicates that there are large discrepancies among the
eleven conferences. Schools from the SEC (X= $38,239,781), the Big Ten (X= $33,384,359)
and the Big 12 (X= $27,233,826) averaged the largest football revenue from 2003-2009,
while schools from the Sun Belt (X= $3,504,254), the Mid-American (X= $3,951,450), and
the Western Athletic (X= $5,130,376) averaged the lowest amount of revenue. The six AQ
schools all had higher averages than the five non-AQ schools. The Big East averaged the
lowest football revenue of the six AQ schools (X= $15,058,066); however, this was still
significantly different statistically from the highest non-AQ leader, the Mountain West (X=
$8,401,775). The six AQ schools reported a statistically significant different revenue (p <
0.001) for 2003 to 2009 of $26,482,906 from the non-AQ schools ($5,423,096) over the
same period of time; none of the non-AQ schools were above the all-conference average (X=
$17,189,517). Regression analysis was used to determine the Pearson’s product-moment
coefficient and the coefficient of determination for the relationship between AQ/non-AQ and
revenue. The coefficient for the relationship was found to be significant at α = 0.05 (r = .661;
p < 0.001), indicating a positive, strong correlation between revenue and conference
qualification status. The coefficient of determination (r2) for the relationship was 0.44
International Journal of Sports Science & Coaching Volume 7 · Number 2 · 2012 351
indicating that conference qualification status explained 44% of the variance in revenue.
Table 1. Average Football Revenue Across all FBS Conference Schools for
2003-2009
Next, the total football revenue for all 116 schools included in the sample was analyzed
across each individual year from 2003 to 2009. The results indicate that the average football
revenue, across all conferences, has risen 63.7% from 2003 (X= $13,210,672) to 2009 (X=
$21,623,571). There was an increase in each year, with the smallest year to year increase
occurring from 2003 to 2004 (3.3%) and the largest occurring from 2005 to 2006 (13.1%).
While the amount of revenue has continued to increase each year, the double digit percentage
gains experienced in 2005 (10.8%), 2006 (13.1%) and 2007 (12.7%) have decelerated in
2008 (5.3%) and 2009 (6.5%).
North Texas (X= $2,493,955), Louisiana-Monroe (X= $2,488,219), Akron (X= $2,235,950),
and Florida Atlantic (X= $1,990,122). Texas Christian reported the highest average football
revenue for non-AQ schools (X= $13,590,643) followed by Utah (X= $11,355,868), and
BYU (X= $11,328,191). The lowest AQ school average football revenues were reported by
Cincinnati (X= $8,137,604), Baylor (X= $9,584,474), and Duke (X= $9,835,039).
An ANOVA on the average football revenue for the years 2003-2009 was performed for
each of the respective conferences; each of the analysis was found to be significant.
Table 3. ANOVA Summary Table for Revenue by Year Across all FBS
Conferences
The average football revenue for the ACC was $18,653,065. Virginia Tech (X=
$29,313,478), Clemson (X= $28,881,051), and Miami (X= $21,573,570) posted the largest
football revenue; Duke (X= $9,835,039), Wake Forest (X= $9,977,166), and Maryland (X=
$10,938,499) were the lowest (although it should be noted that Maryland did not have a
complete sample size). Georgia Tech (X= $19,276,677) was the only school not to indicate
significant differences using the Games-Howell post-hoc tests following the ANOVA.
Virginia Tech, with the highest average football revenue, was significantly higher than
Boston College, Duke, Florida State, North Carolina State, Maryland, Virginia, and Wake
Forest. Duke, with the lowest average football revenue, was significantly lower than Boston
College, Clemson, Florida State, Miami, North Carolina, Virginia, and Virginia Tech.
Georgia Tech, due to the standard deviation in its average, did not record any significant
post-hoc differences.
Similarly, the Big East average football revenue across all schools was $15,058,006. West
Virginia (X= $23,976,444), Pittsburgh (X= $19,463,539), and Syracuse (X= $17,059,591)
indicated the largest football revenue; Cincinnati (X= $8,137,604), South Florida (X=
$10,499,340), and Connecticut (X= $11,436,162) reported the lowest average football
revenue. Rutgers (X= $14,642,110) was the only school to not indicate any significant
differences using the post-hoc tests. West Virginia, the largest football revenue school, was
significantly higher than Cincinnati, Connecticut, and South Florida; Cincinnati, the lowest
football revenue school, was significantly lower than West Virginia, Pittsburgh, Syracuse,
and Louisville.
The Big Ten had the second highest average football revenue of all of the conferences (X=
$33,384,359), and Ohio State (X= $59,296,706), Michigan (X= $51,313,036), and Penn
State (X= $48,665,843) reported the largest football revenue amongst conference teams.
Minnesota (X= $20,860,326), Northwestern (X= $18,577,953) and Indiana (X=
$17,274,616) reported the lowest football revenues. The disparity amongst schools is
illustrated in the fact that each school had at least one significant difference in the post-hoc
Games-Howell tests. Ohio State was statistically higher from every school in the conference
except for Michigan and Penn State; Indiana was statistically significantly lower than
Michigan State, Ohio State, Penn State, Iowa State, Michigan, and Wisconsin.
The Big 12 recorded a conference average football revenue of $27,233,826 and Texas (X=
$68,559,683), Oklahoma (X= $39,920,882), and Texas A&M (X= $37,836,177) recorded the
highest average football revenue. Iowa State (X= $15,044,705), Kansas (X= $13,206,721),
and Baylor (X= $9,584,474) recorded the lowest. Again, there was at least one significant
difference among the conference schools; the Big 12 also produced the greatest number of
post-hoc differences. Texas was significantly higher than every school except Texas A&M,
Nebraska, and Oklahoma. Baylor was also significantly lower than all of the other schools
except Kansas and Iowa State.
The Pac-10 (X= $22,082,133) leaders in average football revenue were Washington (X=
$32,334,406), Southern California (X= $29,696,142), and Oregon State (X= $25,283,308).
Conversely, Arizona (X= $17,549,162), Stanford (X= $13,397,761), and Washington State
(X= $11,642,094) recorded the lowest average. California (X= $21,955,848) did not record
any significantly different post-hoc measures. Washington was significantly higher than
Stanford, Arizona, Washington State, Oregon, and UCLA. Washington State was
significantly lower than Arizona State, Oregon State, UCLA, Oregon, Southern California,
and Washington.
International Journal of Sports Science & Coaching Volume 7 · Number 2 · 2012 355
The Southeastern Conference (X= $38,239,781) reported the highest average football
revenue among the AQ schools with Georgia (X= $59,184,075), Florida (X= $56,302,699),
and Alabama (X= $53,471,308) recording the largest football revenue. The lowest football
revenues were reported by Mississippi (X= $18,820,148), Vanderbilt (X= $16,604,792), and
Mississippi State (X= $13,649,122). South Carolina (X= $39,094,527) was the only school
to not record any significant post-hoc tests; this may be attributable to the standard deviation.
Georgia was significantly higher than Mississippi State, Mississippi, Vanderbilt, Arkansas
and Kentucky. Mississippi State, on the other hand, was significantly lower than all of the
other schools in the conference except South Carolina, Mississippi, and Vanderbilt.
The Mountain West (X= $8,401,775) touted the highest average football revenue among
the non-AQ schools with Texas Christian (X= $13,590,643), Utah (X= $11,355,868) and
BYU (X= $11,328,191) the three highest teams; New Mexico (X= $6,406,563), Colorado
State (X= $4,808,823), and Nevada-Las Vegas (X= $4,098,611) were the three lowest. San
Diego State (X= $8,226,934) did not produce any significant post-hoc tests. Texas Christian
was significantly higher than Colorado State, Nevada-Las Vegas, and New Mexico; Nevada-
Las Vegas was significantly lower than BYU, Texas Christian, and Utah.
Table 10. Mountain West Conference School Average Football Revenue for
2003-2009
Conference USA (X= $6,690,266) was next among the non-AQ schools with Southern
Methodist (X= $10,092,880), Rice (X= $8,236,394), and Texas-El Paso (X= $7,848,625)
producing the largest football revenue. Alabama-Birmingham (X= $5,590,510), Southern
Mississippi (X= $5,159,109), and Houston (X= $4,599,138) produced the lowest. Southern
Table 11. Conference USA School Average Football Revenue for 2003-2009
Methodist produced the only significant post-hoc test, as it was significantly higher than each
of the other schools in the conference except Rice, Central Florida, Texas-El Paso, Memphis,
and East Carolina.
Fresno State (X= $8,982,528), Boise St. (X= $8,430,042), and Hawaii (X= $7,024,283) led
the Western Athletic Conference (X= $5,130,376); San Jose State (X= $3,252,150), Louisiana
Tech (X= $3,053,973), and Utah State (X= $3,046,419) generated the lowest average football
revenue. Fresno State produced the only significant post-hoc tests, as the school’s revenue was
significantly higher from all of the schools except Boise St. and Hawaii.
The Mid-American Conference (X= $3,951,450) was led in revenue by Temple (X=
$8,645,519), Miami of Ohio (X= $5,059,170), and Central Michigan (X= $4,786,407). The
lowest football revenue-generating schools were Western Michigan (X= $2,820,630),
Buffalo (X= $2,803,576), and Akron (X= $2,235,950). Temple was significantly higher than
all of the other schools in the conference except Central Michigan using the Games-Howell
post-hoc test.
Florida International (X= $6,063,220), Middle Tennessee State (X= $5,181,762), and
Troy (X= $4,051,671) led the Sun Belt Conference (X=$3,504,254) in average football
revenue; North Texas (X= $2,493,955), Louisiana-Monroe (X= $2,488,219), and Florida
Atlantic (X= $1,990,122) generated the least. The Sun Belt had the lowest average
conference revenue of all FBS schools. Western Kentucky (X= $3,690,106), the newest team
to the conference and the FBS, was the only conference school without any significant post-
hoc tests. Florida International was significantly higher than each of the other schools in the
conference except Middle Tennessee State and Western Kentucky; Florida Atlantic was
significantly lower than Florida International, Middle Tennessee State, and Troy.
Table 14. Sun Belt Conference School Average Football Revenue for 2003-
2009
The conferences were then split among AQ status and linear regression was conducted to
examine the relationship between revenue and attendance according to AQ stats. For the AQ
teams the coefficient for the relationship was found to be significant at α = 0.05 (r = .786; p
< 0.001), indicating a positive, strong correlation between revenue and conference
qualification status. The coefficient of determination (r2) for the relationship was 0.618
indicating that for AQ conferences, home game attendance accounted for 62% of the
variance in revenue. However, for the non-AQ conferences the coefficient for the
relationship was found to be significant at α = 0.05 (r = .502; p < 0.001), indicating a
positive, moderate correlation between revenue and conference qualification status. The
coefficient of determination (r2) for the relationship however was 0.252 indicating that across
all conferences, home game attendance accounted for 25% of the variance in revenue.
Table 18. Regression Summary for Attendance and Football Revenue across
non-AQ Conferences from 2003-2009
With respect to recruiting, where recruiting was measured as average stars earned per
recruiting class per year, AQ schools (X= 2.92) held a statistically significant advantage (F
= 757.53; p < 0.001) over the non-AQ schools (X= 2.18). The relationship between revenue
and recruiting was explored using linear regression. The coefficient of the relationship was
found to be significant at α = 0.05 (r = .808; p < 0.001), indicating a positive, strong
correlation between revenue and recruiting. The coefficient of determination (r2) for the
relationship was 0.653 indicating that across all conferences, average football revenue
accounted for 65% of the variance in recruiting.
Table 19. Regression Summary for Average Recruiting Stars and Football
Revenue across all Conferences from 2003-2009
The relationship between AQ status and recruiting was also explored using linear
regression. The coefficient of the relationship was found to be significant at α = 0.05 (r =
.696; p < 0.001), indicating a positive, strong correlation between qualification status and
recruiting. The coefficient of determination (r2) for the relationship was 0.484 indicating that
across all conferences, BCS qualification status accounted for 48% of the variance in
recruiting.
DISCUSSION
The landscape of FBS football has continued to change and evolve since the advent of the
Bowl Championship Series (BCS). While not singularly responsible for the expansion of the
sport’s popularity, the BCS plays an integral part in generating interest and discussion from
even the most casual football observer. The creation of the BCS has also led to greater
television exposure across all conferences, and technology and media advances have allowed
fans greater access than ever before. From 2003 to 2009, average football revenue across all
conferences rose from $13,210,672 to $21,623,571 respectively. The exposure and
International Journal of Sports Science & Coaching Volume 7 · Number 2 · 2012 361
controversy of matching number one versus number two have allowed the sport to grow in
popularity and created a financial windfall through increased notoriety.
Equally important, the rules that govern the BCS often exclude participation of multiple
non-AQ schools (occurred only once in BCS history). Currently only one non-AQ is granted
automatic access to the BCS if they are ranked in the top 12 in the last regular season BCS
poll, or if they are ranked in the top 16 and maintain a ranking that is higher than any one
conference champion from an AQ conference [5]. A second non-AQ school may qualify if
there is a slot available in one of the BCS bowls and the team is ranked in the top 14.
Historically, this has occurred three times; the first year, two-non-AQ schools (Texas
Christian and Boise St.) were undefeated and were invited to play one another in the Fiesta
Bowl. The other two years, however, Boise St. was not invited to play in a BCS game despite
being ranked 10th and 7th respectively in the last BCS poll of the year [5]. Still, the BCS,
through their invitation of non-AQ member schools to participate in actual BCS bowl games,
has helped both the Mountain West and the Western Athletic Conference generate more
football revenue than the other non-AQ conferences.
The data suggest that conference qualifying status defines the inequality among the FBS
schools. The average football revenue of the Sun Belt, the Mid-American, and the Western
Athletic conferences combined (X=12,586,080) is still less than each of the AQ conferences
except for the Big East(X=12,058,006). The BCS system, or playing in a BCS bowl game,
is not solely responsible for the generation of revenue for schools and conferences; however,
schools like Utah, Texas Christian, and Boise St. illustrate that non-AQ schools, which
garner the national exposure from the BCS bowl system, can gain a competitive advantage
over their non-AQ counterparts. To this end, Utah and Texas Christian have both been invited
to join AQ conferences in 2011 and 2012 respectively. Television markets have further aided
the acceptance of non-AQ schools into AQ conferences as conference realignment in 2011
and 2012 has resulted in Boise St., Navy, San Diego State, Houston, Southern Methodist,
Memphis and Central Florida joining the Big East by 2014 (agreements in principle have
been reached, but contracts not finalized for all schools to enter into the conference).
WITHIN-CONFERENCE REVENUE
The results of this study help to support the findings of Dittmore and Crow [11] who reported
that several conferences had begun to experience a discrepancy in the revenue balance within
the respective conference. The results of this study indicate that the stratification of revenue
occurs both at the AQ/non-AQ classification level and at the conference level. Each of the
AQ conferences reported a significant ANOVA with respect to revenue, indicating that at
least one of the schools in the conference had a significantly higher or lower mean revenue
than the other respective schools. Automatic-qualifying schools such as Texas, Georgia,
Florida, Ohio State, and Alabama have created blatant outliers in the revenue data. The
margin between the top tier in each conference and the bottom tier is rather pronounced.
Teams in the top tier are beginning to earn two-to-three times more revenue than those in the
bottom tier of their conference. Conference stratification, especially in the Big Ten, Big 12,
and SEC, also paints a picture of competitive imbalance on the field, where fewer and fewer
teams are competing for conference championships.
The revenue problem within conferences is not unique to the AQ conferences. In all non-
AQ conferences the same stratification pattern has emerged. While not as pronounced as in
the AQ conference, the problem still exists.
Stepping back and examining the entire landscape of college football reveals the same
pattern on a grander scale. Those juggernaut programs (Texas, Georgia, LSU, Ohio State,
Alabama, and Florida) that generate the greatest revenue and produce the largest profit
margins are those that are consistently competing on a national level, and hold a competitive
International Journal of Sports Science & Coaching Volume 7 · Number 2 · 2012 363
Florida Atlantic relied on loans, bonds, or student fees to secure the funding for their new
stadiums [13, 14, 25, 26]. Non-AQ schools must also rely on “pay for play” games to
generate additional revenue. Most AQ schools schedule seven home games a season. This is
usually not the case for most non-AQ programs. Driven by money, many non-AQ programs
will schedule away games where the home school provides a lucrative payout for coming to
play at their school (for a complete review of the “pay for play” system see Faure and Cranor
[2]). While the payout may vary by game and school, these games allow non-AQ teams to
earn more money by travelling to an AQ school than they would generate in a home game.
The revenue earned from these games help non-AQ schools fill holes in their total athletic
budgets. While the chances of winning these games are slim [2], they provide the program
with greater national exposure, especially if they are able to win the game.
Generating more revenue from attendance is reliant upon the conference and competition
[9]. The results indicate that attendance explains a greater percentage of the variance in AQ-
schools, meaning that either attendance is significantly lower for the non-AQ schools, or they
are not able to generate revenue from their home game ticket sales through increased ticket
prices or seat license agreements. Many of the non-AQ conference schools could benefit
from signing a home and home agreement versus a top tier AQ conference school. Still,
convincing the AQ school to forfeit a home game, and willingly lose that revenue, may be
difficult. However, non-AQ schools located in fertile recruiting grounds may use their
location as a negotiating tactic when constructing their non-conference schedule. As a means
of building relationships with AQ schools, some non-AQ teams may even consider two–for-
one arrangements that allow for two games on the AQ campus and one at the home of the
non-AQ school. These agreements would allow for the non-AQ school to have a marquee
home game to help bolster ticket sales for home games. In another effort to generate revenue
and visibility, some non-AQ schools have taken to playing “road home games” where the
non-AQ school acts as the home team at a neutral facility near the AQ school’s campus. In
these agreements, the non-AQ school receives both a payout for playing in the game and a
percentage of the game’s ticket sales.
projections based on the potential a recruit has to be an impact player at the collegiate level.
Still, signing a greater number of these higher-rated athletes does increase the likelihood that
success will follow, which in the long term, can create a competitive unbalance. This cycle
continues to place all lower revenue-generating schools at a disadvantage. There are
significant costs associated with recruiting on a regional and national level. An inability to
generate revenue can leave these schools with a reduced recruiting budget, thus placing these
schools at a competitive disadvantage. Schools are forced to become regional recruiters and
seek out players that are geographically accessible. Without the draw of big television and
lucrative bowl games, these schools often do not attract players to their programs or their
campuses. To this end, only one five-star recruit has chosen to attend a non-AQ school since
2003. Without the ability to attract and develop top-rated talent, non-AQ schools may
continue to fall behind in competition on the field.
Given these discrepancies in revenue and recruiting, and in an effort to reverse some of
the current trends in the sport, college football may benefit from a reduction in scholarships
across all programs. The current scholarship structure allows for programs to have 85
scholarship athletes on their roster. By limiting the number of scholarships, talented recruits
would become more dispersed across all of college football thereby increasing the
competitive balance across the sport. Theoretically, as the talent level across all teams
stabilizes, more teams would become competitive, creating greater opportunity for balance
among the sport. As fan interest in the non-AQ schools increased through stabilized balance,
these schools would benefit from increased home attendance, greater media exposure, and
more lucrative marketing opportunities. The propensity of non-AQ schools to gain national
exposure in the BCS would increase, as would their ability to play in the national
championship game. While it occurred before the advent of the BCS, there is a historical
precedent for a reduction in scholarships leading to increased competition. When limits were
first set in the 1970’s, parity in college football began to return.
As noted by Sutter and Winkler [4], however, there are some limitations to the perceived
parity that scholarship reductions bring. While their research concluded that the relationship
between scholarship reductions and parity was not conclusive, they hypothesized that this
was because: the limitations were not strictly enforced, the effects of scholarship limitations
were equal on all teams, and the scholarship limit at 85 was, perhaps, still too high. Reducing
the scholarship limit could help to disperse the pool of talent; however, there are costs
associated with a lower number of scholarship athletes. A reduction in scholarships could
limit the quality depth at each position across all schools thus impacting the overall quality
of the sport. Further, these reductions in depth could potentially compromise the health and
safety of the student athlete. It should be noted that this system would not prevent an athlete
from attending their desired school as a walk-on. As such, it could potentially open the door
for NCAA violations such as boosters paying for a walk-on’s tuition or giving the walk-on
athletes extra benefits.
Any reduction in scholarships cannot be fully implemented without thorough research on
the part of the NCAA and the institution. First, the impact to player health and safety must
be considered to ensure that the athlete’s well-being is not compromised. Of equal
importance, the potential impact on women’s sports and on scholarships for female athletes
(through Title IX compliance) cannot be ignored. Finally, a reduction in scholarships could
lead to greater competition in recruiting thereby leading to increased spending on recruiting.
Leveling the playing field with recruiting may not be the only solution to the revenue
discrepancy. Many programs should conduct an internal audit and decide if Division One
football, namely playing FBS football, is financially feasible. If schools have self-reported
366 The Great Divide: Examining Football Revenue among FBS Schools
their revenue and expense figures correctly to the Department of Education, there are many
programs that are operating under a continued loss. In the long run, these programs must ask
if a drop in classification is in the best interest of their athletic departments. The NCAA may
benefit from instituting minimum revenue margins to remain classified as an FBS school
(there are currently attendance minimums and sanctions imposed for graduation rates).
Contracting programs may help raise the competitive balance of the sport and create smaller,
more economical conferences. Teams like Eastern Michigan, who are not on the same
competitive level as the University of Michigan, would no longer compete in the same bowl
division. With minimum revenue qualifications, the FCS conference would receive new
teams to add to its division, which could lead to a gain in attendance, popularity, and revenue.
CONCLUSION
College football has exploded in fan support and popularity since the advent of the BCS in
1998. The results indicate that each of the BCS conferences has experienced an increase in
revenue over the period of the study. The results of this study confirm a landscape of
imbalance and inequity in college football. Over the course of the study, the variance in
revenue between non-AQ and AQ conferences has continued to rise and shows no sign of
reaching an apex in the near future. With respect to research question number one, the results
of this study conclude that there is a stark difference in revenue between the AQ and the non-
AQ conferences. Further, the results of this study point to a likelihood for this pattern to
continue. Given the vast differences among the conferences, AQ schools have gained a
competitive advantage on the field and off the field in their ability to generate revenue
through success on the field.
The results of this study also indicate that conference membership has bolstered the
revenue-generating ability of some of the lower-tiered AQ schools. Duke, Indiana, and
Mississippi State have benefited from their AQ-conference affiliation. However, they are not
on par with many of the other schools in their conference. With respect to research question
two, the results of this study confirm that there is a significant difference in the revenue
generated among the respective schools in each conference. This study not only illustrates
the chasm between the AQ and the non-AQ conferences, it also clearly indicates problems
among schools in the same conferences. Many fans and members of the media are quick to
blame the BCS for the differences seen in college football today. However, the rate of
separation cannot be solely and fully explained by the advent of the BCS. Programs that
made the investment in coaches, facilities, and other aspects of their infrastructure are now
beginning to benefit from successful programs through increased media attention, increased
endorsement opportunities, and increased alumni and booster donations. These programs
cannot be blamed nor held accountable for the risk that they assumed in making investments
in their program.
Finally, with respect to research question three, the results of this study indicate that there
is a strong, positive correlation between conference classification (AQ versus non-AQ) and
revenue. Thus, schools in AQ conferences have a stronger ability to raise revenue with
continued success.
The culmination of this research points to the creation of a competitive imbalance on the
field. Simply, non-AQ schools, with less revenue and exposure, find it increasingly more
difficult to compete with the AQ schools at the FBS classification. With respect to finances,
the same schools continuously rank among the leaders in revenue and profit, and, the same
schools are competing for BCS bowl games and national championships. The results of this
study quantify the public perception of stratification in college football. At a macro and
International Journal of Sports Science & Coaching Volume 7 · Number 2 · 2012 367
micro-level, the disparity among teams and conferences cannot be ignored. Teams in a cycle
of losing may experience “flash in the pan” success, but unless they have the revenue to
support the infrastructure required for long-term success, they will eventually fall back into
relative obscurity. For every Boise St., Utah, and Texas Christian, there are teams like Tulane
and Marshall who have finished undefeated but have been unable to maintain their success
over a long period of time. Further, there are teams in conferences that are fighting for
respectability, let alone a conference title. Winning is more than the product on the field.
Schools must make an investment in their recruiting budgets, upgrade facilities, and finance
big-name coaches to earn a competitive advantage over the other members of their
conference. All of these respective actions require a significant monetary investment. Given
the differential in revenue amongst the FBS schools, one cannot ignore the impact that it can
have on the longevity and sustainability of a football program.
The implications to athletic directors, to coaches, and to administrators are endless. The
current system allows a very few number of teams to recruit players and honestly say, “Come
to State, where we promise you will compete for national championships every year.” The
current system almost ensures that the competition for the more lucrative bowls and greater
national exposure is down to six conferences. Now more than ever, there are more and more
teams that recruit players who know before they ever start their freshman year that they will
never compete for a championship and may spend their time on campus as a sacrificial lamb
in order to help their programs stay afloat. As athletic directors and college presidents look
at the spirit of the sport, and the spirit of the governing body whose rules they play under,
they must ask themselves, honestly, if the game has been lost and now the sport is just a
business. The results of this study indicate that while the current system has created the
opportunity for financial gain, it has not come without sacrificing competitive balance and
competitive spirit.
The growing gap between those at the top and those at the bottom will take years to self-
correct; therefore it is recommended that the NCAA consider reducing the number of
scholarship players across the FBS from the current cap of 85 players per team. Just as it did
in the 70’s when teams were signing upwards of 130 players to scholarships, an NCAA-
imposed cap would lead to a greater distribution of talent across all teams in the FBS and
allow for increased competition and competitive balance. While this may reduce the
opportunities for some high-school athletes due to a reduction in overall slots, the sport
would benefit from greater conference and out-of-conference competition through increased
parity. Still, the cost to the school must be further researched as this reduction in scholarships
may lead to an increase in recruiting expenditures as the competition for top-rated recruits
intensifies.
Further, it is recommended that the NCAA investigate the possibility of imposing revenue
minimums as part of their classification process. Namely, this effort would require programs
with revenues below a predetermined benchmark to move to a lower classification of
competition where they may be more competitive (both fiscally and on the field). The current
fiscal model of the sport cannot sustain and support the 120 schools claiming FBS status –
with or without the BCS. The reduction in FBS teams could also help to increase
competitive balance among the remaining teams and potentially lead to increased revenue
across all teams in college football.
The current study concludes that the long-term sustainability of many programs is in
serious jeopardy unless they can find alternative avenues to generate funds. College football
should not be a liability to schools and to athletic programs that are constantly playing catch-
up and trying to compete on an uneven playing field. Further research is necessary to explore
368 The Great Divide: Examining Football Revenue among FBS Schools
an economic model that can provide competitive balance and consistent profitability for all
programs. Further research should seek to find an economic model that provides alternative
revenue streams for sustainability. Efficiency models should be explored to help athletic
departments find more effective and efficient methods of operating. Specifically, the impact
of stadium size and game day expenditures should be explored. Athletic departments,
specifically those who do not sell out their stadiums, may benefit from reducing capacity by
using branded tarps to cover seats. While this leads to reduced capacity, the additional
advertising revenue may offset the lost ticket sales. These self-studies may help to uncover
lost or untapped revenue streams for ailing departments.
Future studies should investigate television contracts and new forms of media as
alternative avenues for teams to help increase funding and revenue. Finally, the impact of
reduced scholarships on teams and the student athlete should be explored, as a greater
understanding of the impact on the depth of teams, the quality of competition, and the well-
being of the student athlete is necessary before these recommendations can move forward.
The financial and competitive strain that revenue-stratification can pose on all
conferences is clearly illustrated in this study. The growth of the sport should be an
opportunity for all schools in all conferences to re-position themselves for success and
prosperity. For this to occur, however, athletic administrators must prioritize sustainability
and competition. Further, they must seek ways to maximize both through additional,
alternative streams of revenue. Administrators must ask themselves if the current system is
fair and just. The challenge for administrators and coaches, then, is to build a competitive
and marketable team that can grow within the system, or implement policy to help alleviate
the ills of stratification and restore balance to the sport.
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