College Bowl Payouts Don’t Add Up

The Pittsburgh Tribune-Review recently published an article which investigated the myth that college athletic departments reap significant profits when their football teams are invited to high-profile bowl games, particularly Bowl Championship Series games.  The paper notes that most BCS-affiliated conferences (Atlantic Coast, Big East, Big Ten, Big Twelve, Pacific 10, Southeastern)  pool the payouts among its members by staggering the allotment to cover expenses for bowl-bound schools while splitting the remainder of the revenue evenly to every member.

The paper presented an example from the Big East, in which both the University of Cincinnati (UC) and the University of Pittsburgh competed last week for the conference championship and the right to play in the BCS-affiliated Sugar Bowl, with UC winning the game, 45-44. UC will receive only $2.2 million of its $18 million payout for appearing in the Sugar Bowl. The University of Pittsburgh will receive $1.09 million to participate in the Meinecke Car Care Bowl. Each team will also receive an eight-way cut of the conference share.

“In no conference is there any game where the winner makes $18 million and the loser makes $1 million. That’s a bad business model,” Big East associate commissioner Nick Carparelli said. “The bowl payout to conferences is really funny money. When you go to bowl games, you’re going to more expensive destinations with a bigger travel party. The net result isn’t a million dollars. It might even be zero.”

While college athletic departments may not expect to profit from bowl games, administrators do considered the potential of losing revenue. “None of us view the expense money for going to a bowl game as profit, but we do figure it in our budget,” University of Pittsburgh athletic director Steve Pederson said. “The finances of all these games are tight, so there’s no great windfall going to any one school. The way we’re allocated expense money, you hope you cover your expenses.”

According to West Virginia University senior associate athletic director Russ Sharp, his institution lost over $1 million when agreeing to participate in the 2008 Fiesta Bowl. Sharp said that the Big East’s payout to West Virginia for its trip to the 2008 Fiesta Bowl was $2,425,600, but the school’s expenses totaled $3,495,000 – for losses of $1,069,400. Taking the 400-member band alone cost West Virginia nearly $700,000, and the school had to swallow some of its 17,500 ticket obligation. “We lost money on that trip,” Sharp said. “It was an expensive deal.”

“It’s a constant, educational reminder to our fan base that, ‘here are the financial realities,'” Pennsylvania State University athletic director Tim Curley said. “You’ve got to manage it because you don’t want to lose money on these trips. We try to be respectful of what it realistically costs to go on these bowl trips.”

For the complete story and a list of Big Ten and Big East bowl payouts and school allotments, link here.