I’m not going to delve into the reasons why we’re so passionate about college football, but it’s clear that we are. I blog about it; you read and comment about it. We fill stadiums up, not just during the regular season, but for meaningless spring games as well. And contrary to any romantic notions we may hold, you can put a dollar sign on that passion.
As incredible as this may sound given athletics departments’ addiction to TV money, college sports has actually been undervalued. That’s changing due to viewer interest and more competition among media companies. This week, Broadcasting & Cable Magazine reported that CBS’ ad prices for the SEC are up 10 percent from last year.
“The American public votes with their clickers and they vote by buying products that advertisers sell,” said Neal Pilson, a media consultant and former president of CBS Sports. “The result is college football and college basketball are hot properties for a lot of companies.”
We’re the ones who motivate the networks and the conferences to haggle over the fees.
I’ve said before, college football isn’t a monolithic institution, like pro sports leagues are. It’s more a loose confederation of haves and have-nots. That’s been reflected in the TV deals the mid-majors have, the battle over postseason revenues and, of course, the musical chairs game of conference realignment.
What we may be seeing now, with the FSU story, is the start of a serious battle of the haves. And as fans, what we should be concerned about is whether the compromises made in the chase for the dollar turn what we love into something that’s not as attractive. The suits pay lip service to us and our passion, but it’s clear that commitment doesn’t mean what it used to mean.
Now if you’re part of a fan base attached to a school which is attempting to make a perceived step up with a change, that’s all well and good. You can tell yourselves that your institution is undervalued in its current setting…
Florida State’s athletic program has experienced unprecedented success lately finishing in the top 10 of the Directors’ Cup for the last two years. Even the major revenue generating sports – football, men’s basketball and baseball – have done well.
While falling just short of a BCS bowl appearance, the football team has won nine-plus games the last two years, won the state championship and played in two relatively high profile bowl games that both sold out. And within this same two-year span, baseball hosted two NCAA Super Regionals and has been to one College World Series. And Leonard Hamilton’s basketball team followed a Sweet 16 appearance in 2011 with an ACC Championship in 2012.
… while gliding by the unhappy reality that you’re the reason your school is shopping itself to the highest bidder.
… Sagging football attendance is the main reason for Florida State’s budget shortfall. For a program accustomed to competing for national titles, going 26-14 over the past three seasons apparently isn’t cutting it for many fans.
Donations are way off, too. Four years ago, Seminole Boosters reported total revenue of $42.8-million, according to its tax records. In its most recently reported year, it brought in $32.7-million.
And those aren’t the athletic department’s only financial problems. In February, Moody’s Investor Services downgraded the revenue-bond rating of FSU Financial Assistance, a unit of Seminole Boosters, after it had to come up with extra money to prop up the athletics program.
The irony here is that FSU, should it make the move, comes off as glorified cupcake. It gets more money with a switch to the Big 12, but it will face tougher opposition. Going 26-14 against the likes of Wake Forest and Clemson (two schools it’s struggled with) translates into what against Oklahoma, Texas, Oklahoma State, etc.? If the wins don’t flow more readily in the new home, when does a drop in fan enthusiasm, which will pick up with the shiny new conference change, rear its ugly head again?
I don’t mean to pick just on FSU here. It’s very much the same story as we watch the SEC muddle through its scheduling issues resulting from expansion to 14 schools this season. And it’s driving the postseason reset, too.
The thing I keep asking myself as I watch the money chasing not just continue unabated, but actually accelerate, what makes all these folks smart enough to know when to stop? Assuming that there’s a need to stop, as our need for sports is, if not insatiable, pretty damned close to that.
Tell me this doesn’t resonate with you to some extent.
I find this funny, because I think we’re in the middle of a college football bubble.
Look at the past couple of years. We’ve seen a huge upheaval in conference alignments, as folks jettison history in a desire to get the cash a conference football championship brings. And it’s paid off in the short term, as networks have thrown down large chunks of change in advance of a possible NFL lockout. But more schools and bowls are losing money on the postseason. Last fall saw investigation of agent contact at Alabama, Florida, Georgia, South Carolina and of course, North Carolina, and since then Ohio State’s football program has completely melted down and Oregon is fending off charges of paying for recruits. I’m guessing this aspect is going to get much worse before it gets better. Bowls are throwing around bribe money, and Congress is showing signs of investigating. And finally looming on the horizon is the increased findings on concussions, which is beginning to draw some heat in the NFL, and is just one coach’s bad decision away from blowing up in the face of a college football program.
There’s a lot of dumb money flowing into college football right now, and it wouldn’t surprise me if the popularity slips and it goes rushing out, taking a few programs with it…
Now that was written about a year ago, and it doesn’t look like we’ve hit any sort of peak yet. But something he posted a couple of months later sure looks prescient.
The other sure sign of a bubble? In the midst of everyone clamoring to throw money at the tradition and pageantry of college football, the people providing it start saying how meaningless said tradition is. Bob Stoops announces that the 105-game Red River Rivalry can be dropped, if need be. It’s not important. The 86-game Nebraska-OU rivalry has already gone the the way of the dodo after all, and Texas is saying they’ll drop A&M from their schedule. Because I’m sure a thrilling yearly battle with Navy will bring just as many eyeballs. History no longer applies, and the quality of the product we’re selling isn’t important. Both things that are said right before the market for whatever you’re hyping crashes to earth.
Anyway, everything looks one step closer to the consolidation into 16-team conferences, after which they really stop being conferences and just become television cartels. I’m sure fans of teams divorced from everything they’ve known will continue to love their new travels to far-off venues for mediocre games. After all, there will be a new uniform combination debuted! That’s what everyone’s watching for, right?
Sigh. I’m not sure what’s more depressing, to be played for suckers by the suits, or to have the suits proven right by that. It remains to be seen whether that happens, but my other sad reflection here is what happens if the suits overshoot the mark and do damage our affection for the sport. Getting the genie back in the bottle is always a tough task. It’s even tougher when it’s the people who screwed things up who are expected to be the ones to fix the mess they created in the first place. Color me deeply pessimistic.
Get The Picture 
College football used to be like Ma Bell and the airline industry used to be: regulated and stable. The breakup hit Ma Bell and deregulation hit the airlines. The Georgia/Oklahoma lawsuit was the triggering mechanism for college football, but it took a couple of decades for revenues to go wild.
The airlines still can’t make a dime and the phone industry bears no resemblance to 30 years ago. Now everybody’s throwing money at football. 16 team super conferences sound inevitable, but remember nobody’s elite statue or big time status is permanent. The 1940 Rose Bowl was played in Durham. The first Orange Bowl included Bucknell.
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The 1940 Rose Bowl was played in Pasadena. The 1942 game was moved to Durham after the attack on Pearl Harbor just 25 days earlier. Duke had already been invited to play in the ’42 Rose Bowl before the attack. After Pearl Harbor, the govt cancelled all large public gatherings on the West Coast, so Duke asked Oregon St, who they were supposed to play in the Bowl, to come play the game in Durham rather than cancel it. When it came time for the 1943 game, the threat of attack on the West Coast had dimished so the game was played as scheduled in Pasadena. Some team led by Charlie Trippi beat UCLA 9-0.
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I knew that. 😉
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Wow. For some reason I was thinking about the ’40 rose bowl as an example of impermanence of the status quo also.
I think were at a convergence between the bigger stronger faster players and the ability of the equipment to adequately protect them. It may be years away from now, but I do think the head injury issue will precipitate huge changes the the game. Might well be the pin prick that pops the money bubble.
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I have been watching the numbers from the bowl games the last few years. Ticket sales and TV ratings are pretty much down across the board. You know something is coming when the post season isn’t a cash cow anymore. Problem is, the suits are idiots for the most part and sadly there is no telling where all this is headed. But it isn’t going to be good.
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“…but my other sad reflection here is what happens if the suits overshoot the mark and do damage our affection for the sport.” Well, I already let my tickets go in anticipation that the bubble will indeed burst. The only real question in my mind is how much damage will have been done at UGA before that happens. I think schools like Texas and Nebraska may have seriously miscalculated already. Hopefully, at Georgia, we won’t have sold our souls to the devil. I would like to eventually pick the tickets back up in a few years if things get back to normal.
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I wish I didn’t agree with the bubble theory, but I do. I feel like college football is really being over-valued in the market (and I can’t believe I’m saying that) and the TV people and the college AD’s and administrators are holding one big credit default swap in their hands.
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If I were a Florida State grad, I’d be outraged right now. The ACC just got a huge new renegotiation to the TV deal, and these guys can’t make the money work? And the best idea this jackass can come up with is to join a conference where I’ve got no hope of making it to a single road game without jumping on an airplane? Seriously, that sucks. And what further sucks is that it’s just another step in a bad direction for college sports.
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+1
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Would you really be outraged? Who are the traditional rivals you’d be leaving behind to join the Big 12?
I think FSU, for a “have,” is in a unique position of flexibility. It does not have the traditional ties that the majority of the real football haves, pardon the repetition, have. Perhaps I’m wrong here and Texas-T AM illustrates that…but I think mostly not. I can’t see Alabama or Michigan or UCLA leaving their conferences…can you? Now, the second-tier haves–the Kentuckys, the Colorados–they’re different. I guess I’d have to consider T A & M in that group. Wouldn’t have put FSU there, but they are in a conference that was never a real home to start with, IMO.
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I have to agree. FSU can’t sell out what it doesn’t have. Heck they joined the ACC in 1992. That even shows up in a Florida fan’s recorded history of football.
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And other than a rivalry with Florida and with Miami, what tradition would be threatened? I guess they’d have to pick one or the other (unless Miami joined them in moving to the Big 12) as their yearly rival, but aside from that lost game, what else is lost? It’s not like their storied rivalry with North Carolina and Wake Forest, and who can forget the Bowden bowls with Clemson, are anywhere near the tradition filled contests of say Nebraska/Oklahoma, or the rivalries they lost with Auburn and SEC foes when they joined the ACC.
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The part that gets me is that most of these athletic departments share very little of this new revenue with the actual school. It just all goes back into athletics so school A can have a big new facility, then school B can keep up, then of course C needs one too, then A’s got to one up them both again, and so on and so on. No school gains a useful dime; its just a big damn football cold war.
Oh, yeah, if we have a new indoor facility, we’ll get all the recruits. Yeah, and we’ll get one too then we’ll get all the recruits. Yeah, us too; we’re all going to get every recruit and win a championship now!
No, that won’t work, lets move to a different conference where we’ll win! Yeah, us to, we’re going to move conferences and get a championship! Yaaaaaaaay, we don’t need traditions anymore, we’re all going to get a new championship!
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Bunch of damned lemmings, walking right off the cliff into a sea of ESPN sucktitude, where the same 6 or 8 schools will still win 90% of the championships, just now nobody else is allowed to enjoy a non championship season anymore.
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just now nobody else is allowed to enjoy a non championship season anymore.
Yep, 100% right.
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“The part that gets me is that most of these athletic departments share very little of this new revenue with the actual school.”
Doesn’t that revenue find it’s way back to the Univiersity and University towns indirectly? I’ve read where success in football effects enrollment. But to be fair ….I guess Georgia is not hurting for students. I might have held my breath while waiting on my son’s acceptance notification. Athens does gain economically because of UGa sports and the more wins the better …. No?
“Oh, yeah, if we have a new indoor facility, we’ll get all the recruits. Yeah, and we’ll get one too then we’ll get all the recruits. ”
Well, that philosophy is certainly alive and well with respect to student housing/ multifamily development in ACC! Build it and they will come.
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No, I think Football is great for schools. Increased applications because students love it, money in town on game day, great for keeping alumni involved and raising money for all programs, etc.. I’m not one of those kooks who thinks football is just bad. Every school should have football.
I just think the money grab is entirely unnecessary and does nobody any good except ESPN and the rest of the people in charge of it who are collecting more and more money because it makes their jobs more and more complicated and competitive so they can demand to be paid more.
My point is that everyone, and every college town, is basically in the same competitive place they were when everyone had $500,000-$1M staffs, a packed town, and big sold out stadiums on game day as they are now with $7-10M staffs, a sold out stadium (albeit less often), and nicer facilities. Except now they all have ESPN encouraging them to shit all over their own traditions. There is no net gain to any one school in a conference when they’re all getting the same big money to just dump back into their athletic facilities. Its like every school thinks its the one school who’s going to come out on top in every one of these stupid deals.
Wrong. With very very few exceptions, every school is going to be in about the same competitive place they were before this whole thing blew up, except it now cost a lot more to run the whole operation.
But they can’t just stop, because the first person to decide not to show up to the gun fight with a gun gets shot. So they’ll all keep on doing whatever it takes to keep up in the short term. And all the while more and more people will become more and more aware of how much less entertaining the whole thing is, the cost will stay the same, and the “bubble will burst”. All those passive fans who didn’t care before the ESPN hype will move on to something else, and the people who loved it all along will be left with a shell of a sport we used to love, and memories about all those great rivalries we used to have.
First it was people running up the score on each other to get “style points”. Then it was scheduling patsies for the same reason and to buy wins. Now conferences have absolutely no geographical meaning and rivalries are dying left and right.
For what?
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I certainly applaud your passion. GO Dawgs.
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“we have no idea what kinda shit is about to go down.”
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The Carolina March author talks about a bubble but provided no evidence to support the existence of one. Instead he talks about history being jettisoned and agent investigations.
Where he sees a bubble, I see a market value correction as college football programming becomes a commodity. A commidity priced by a market that is still in the process of defining itself. We have a very long way to go before CFB pricing approaches that of tulips in 17th century Holland.
What is happening (and what the author dislikes) is change – fundamental change in the locus of CFB power. Conferences and networks now rule and their decisions are based on money.
Adam Smith would be proud.
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On your point about power, I don’t think it’s a much a change in the locus as it is a consolidation of what already exists.
As for your criticism of T.H.’s analysis, I don’t want to put words in his mouth, but I think he’s arguing the same thing I am – that in chasing the dollars, there’s a risk that college football turns itself into something less attractive to the fans who in the end generate the market value of the sport.
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Agreed. I should preface this by saying I’m a full-on capitalist. I was a consumer of MLB until steroids (a somewhat analogous effort to “take it to the next level”) and some other frustrations with the game finally got to me.
I don’t go to any ball games now – even my beloved Bulldogs – because when you add up all the “costs” (crowd, ticket prices, etc) and then throw the world’s largest and most annoying television set into the mix, bombarding me with advertisements from the field – I find it’s more pleasant to watch at home.
So in their efforts to maximize revenue, I agree – if they keep changing what made me like the product to begin with, I will spend less money on it and become far less invested.
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NASCAR is a cautionary tale.
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I think the main risk is that the powers that be are going to wind up changing college football too much, all in an effort to get more eyes on it for TV. As one example, we need a big playoff with lots of teams and a big championship game because it works for the NFL. But there is no draft in college football, the schools are only loosely affiliated, and there is no consistency in scheduling. So they fiddle with it every two years, make teams move to different conferences to chase the money. Maybe more casual fans will watch, and they’ll make even more money on selling commercials. But the things that attract fans like us will be diminished.
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Well, I guess when it truly gets profitable enough, Goldman Sachs or Citigroup will by college football. Then we can rest easy, because we know if the bubble bursts, the politicians will bail them out and give ’em a bonus for doing it.
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+1000.
Shoehorning a reminder of that bipartisan heist of our money into a conversation always gets a rec from me. The sombitches on both sides are rotten to the core…and we idiotically re-elect both our GA senators who voted for it, sending a clear message that we will accept any behavior provided the perp is wearing the same color jersey as we are.
I voted for Blutarsky, of course.
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…in return for that hefty campaign contribution come election time.
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Isn’t it pretty difficult to have dramatic undervalue and a bubble at the same time?
I think it’s pretty obvious that historically the conference contracts where undervalued, so a correction was in order. The problem, or benefit if you are Mike Slive, is about the time the conferences figured out they could get a lot more cash, their product became a lot more valuable due to factors completely out of their control (rapid rise of live events as the most valuable tv properties). The correction may overshoot, sure, but where are the suits gonna turn to for their precious live content?
But to answer my own question, yeah, I guess there could be a bubble, but I’d think the bursting budget would be athletic depts as a whole, football excluded. The damage will most likely be to the men’s non-revenue sports at big boy football schools and to everything at non-big boy football schools. The UGA’s and FL’s of the world won’t be in too much discomfort football wise I wouldn’t think because if forced, they can always generate revenue with compelling games (even if they are dragged to do so kicking and screaming).
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Eye of the beholder. Inside the bubble, things look undervalued. It’s only after it bursts that everyone realizes the commodity was overpriced.
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Of course, that’s just defining a bubble. But my point is the TV suits have no where else to turn. They’ve been trying for a while to manufacture interest in other sports (see EPL/World Cup coverage) to provide cheaper content, but to no avail. Talk of a bubble is all well and good, but a dramatic deflation in value is highly unlikely for the most popular sport in the country (football). Continued exponential growth? No. But a burst causing a significant drop in price? Not unless people stop liking both football and watching it live.
I see the issue more being schools that are spending based on future projections (Iowa St, etc), instead of present day revenue. They will get caught with their pants down when the contracts begin to stabilize.
The thing I don’t buy into about the bubble is that something would have to make it burst. The only thing that can do that is TV deciding to pay a whole lot less. What could cause that much fan apathy?*
*not sure I want that answered. And I damn sure hope I never find out.
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I think you just squared the circle with me. 😉
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“Not unless people stop liking both football and watching it live. ” Where’s the Senator’s Clarke Howard post about watching it live vs watching the 60″ widescreen at home? You are half way there with that post.
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“TV deciding to pay a whole lot less.”
This could happen if cable and satellite providers decide they are no longer going to agree to ESPN’s continued price per subscriber fee increases. That would be/will be a cataclysmic moment in sports business.
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If Florida State can’t make it work the last three years with decent home schedules (Oklahoma, BYU, South Florida, and alternating UF/Miami), what does that mean for schools who load up their entire home schedules with cupcakes (Buffalo / Fla Atlantic / UT / Vandy / Ole Miss / Georgia Southern / GT)?
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It means people will stay home. The Vandy game is the only game on the home schedule with any heat to it (thanks to last years Grantham/Franklin dust up) and I’m already debating on staying in Atlanta for Music Midtown instead.
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FSU? What did you expect from a school that sold it’s Political Science Dept to the Koch Bros?
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RE: Chasing the dollars and making CFB something lesser
I know it may be hokey but the loss of traditional games really sticks in my craw and is the ultimate sign that the powers that be could care less about the fans. The fact that the Auburn/Georgia game is still on the table to be discontinued due to scheduling constraints drives me crazy. I think the conference realignment sweepstakes has turned off a lot of fans already.
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A great deal of the push comes from football conferences. We were led into expanding, not by our conference head, but by another’s. Delaney began hinting and pushing like they would create a megaconference and push everyone into the dirt. While I tried to sound the alarm (that Delany was trying to get us to get in an unneeded arms race), blogging forces took over and the speculation of how many and who began. We were as happy as clams and bragged about the 13M ESPN was forking over to our important teams in this important conference.
The SEC began to dance with a few and we entered the reasoning fray simply from what teams could bring the most fan viewing. The 4-team module addition finally decreased to two teams since Delany hadn’t gotten ND and the world to commit. I pushed for A&M and Va Tech to be the new entries amid the frenzy of guesswork displayed on gtp. No one stepped back and said, “Wait a minute!” until the teams were offered to join our conference and scheduling became a blunderbus aimed at our heads because we didn’t want to play more SEC games.. As fans blogging on a college football blog, we seemed unaware that the reasoning to expand was to blow out the old contract and get mo’ money because now we were too great to go for a paltry 13 M each. Add the bowl games bitch into the milieu and the BCS became the Grinch.
The sugar plum dance that followed has led the BCS finally to a playoff that most of us wanted (over 80% according to two years of fan polls). Now the reasoning is projected that it all is just for money. And it isn’t even a playoff. The playoff model supplied by Div-II football we saw as an equitable playoff scheme, doesn’t even touch the scales. It is a 4-team selection replacing a 2-team selection.
The bastardization of the process has begun with us as powerless onlookers who shake their fist at the money mongers, who dear Brutus, may be us. But we have had help.
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The gazillion dollar question:
How is it economically preferrable to cancel popular rivalries, schedule cupcake games, etc? If here at GTP we are even somewhat representative of the fan base, how is giving people *less* of what they want a money maker?
Also, one ridiculously obvious suggestion for increasing ratings and money without making any unpopular changes:
STOP SCHEDULING / BROADCASTING SEC GAMES AT THE EXACT SAME TIME. Especially the ones you know have potential to be great match-ups. Why not have a few Thursday night SEC v SEC games?
Why am I occasionally flipping back and forth between three great SEC games at 1pm and then can’t find a good SEC v SEC game at, say, 7pm? Aren’t there (roughly) 11-12 hours of watchable football time on a Saturday for 99% of the fan base? Throw out the non-SEC games on everybody’s schedule and there’s no reason to miss too many head-to-head SEC match-ups if they’d get their act together with the networks / schedulers and force this into the TV contracts.
Shoot, start KY v. Vandy at 11am and you’ll have all the other SEC fans watching it…but when it starts at 1pm, not so much. Maybe odd hours hurts bleacher revenue? Conflicts with TV contracts with other conferences?
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The people making those schedules are of the same mind as the ones demanding the Rose Bowl get special treatment in whatever playoff format is passed, and they’ve already got plenty of cash. Does that answer your question?
Also, don’t forget the Gator, Capital One, and Outback bowls have been at the exact same time for at least the last two years.
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Television-centric organizations tend to overvalue things. Look at what NBC paid for Myspace. You can run down the list of acquisitions that blew up in the buyers’ faces in that industry. It’s the most “in-the-moment” industry I have ever worked with. “Long-term planning” for them usually just means a longer contract.
TH’s basic point seems to be this:
1) TV people pay the premium because the events draw live viewers versus DVR reviewers.
2) People watch live because the events have a tradition or competitive aspect to them that puts a premium on the live viewing experience.
3) CDB administrators seem in a rush to eliminate tradition and dumb down schedules in order to maximize revenue.
Number 3 pays all sorts of attention to Number 1 and takes Number 2 for granted. See the problem there?
You know what? Fine. Let it blow up. If it sends the casual fan packing and forces the sport to get back to basics, I’m cool with that at this point. Unfortunately, we could end up with bubble-driven consequences (bloated conferences and convoluted post-season) in a post-bubble game. That would suck.
Very smart people made money decisions that pushed the tel-coms off a cliff a decade ago. Anyone arguing that this is just the market at work doesn’t understand bubbles. They were markets at work, too. Market-driven decisions have become bonus-driven decisions in most companies, and it’s hard for people to grasp just how much that skews the system. I still remember Bernanke and Greenspan in shock over the decisions being made in investment banks. They had always assumed that individual decisions would defer to institutional and market health. Wrong, wrong, wrong.
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I thought the yellow-journalism/phone-tapping Brit friend (World News,etc.) bought MySpace for 580M and sold it last year for 35M. Do I be wrong about the site?
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Football has jumped the shark. Granted, it will be a very long, slow decline but I think it’s already peaked.
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That is probably true of sports generally. Like the housing market it has to end sometime. It cannot continue to increase forever.
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