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Tuesday, February 19, 2013

Is It The End Of The World As We Know It For Collegiate Athletics?

            In almost every “David versus Goliath” college football matchup, Goliath wins. But those types of games may soon be a thing of the past. The Big Ten Conference recently announced that its schools had voted to no longer schedule games with non-Football Bowl Subdivision (FBS) members. Many followers of the Big Ten applauded this move. Not only would it increase the competiveness of Big Ten programs, in terms of their national strength of schedule, but also it would eliminate games with lopsided scores, such as the beatings Savannah State suffered against Oklahoma and Florida State (where the school lost by a combined score of 139-0).
            Yet this impending decision means there are bigger losers off the field than Savannah State was on the field. In a Forbes article entitled “Elimination Of Guarantee Games Increases Likelihood Of NCAA Breakup,” Jason Belzer does an excellent job highlighting how many Football Championship Subdivision (FCS) teams need these “paycheck” games to survive. For example, he points out, “Northern Iowa (UNI) collected almost $1 million in guarantees from playing Iowa and Wisconsin, which accounts for almost 1/3 of the school’s $3.3 million dollar football budget.” More importantly, Belzer notes that the Big Ten’s decision would reverberate throughout the rest of the FBS. He argues that conferences such as the SEC, ACC, Pac-12, Big 12 and Big East will follow the Big Ten’s lead and stop scheduling FCS opponents. In addition, Belzer then suggests that schools in these conferences may limit the amount of games they play against smaller schools in basketball because these programs face similar competitive pressures as their football counterparts. 
            Belzer then argues that FBS schools’ impending decisions to eliminate games with FCS schools leaves these smaller schools in a very perilous competitive situation. Losing this substantial revenue will force these schools to generate revenue in other ways or “essentially be forced to stop competing at the same level as the larger institutions.” But according to Belzer, there is no real way for FCS schools to make up this revenue. The resulting gap between FCS and FBS will ultimately lead to the “eventual breakup of the approximately 340 school’s that compete at the NCAA Division I level.”
            B6A disagrees with virtually every point with Belzer’s analysis in the last paragraph. First, paycheck games are not going to be eliminated. In fact, non-BCS conferences have potentially new lucrative revenue generating opportunity. BCS schools still need to schedule games but have fewer schools to compete against in these games. Therefore, schools in conferences such as the MAC, Mountain West, Sun Belt, and Conference USA are going to have the opportunity to charge more money to play in these paycheck games. This means that at least some NCAA Division I schools not in BCS conferences should actually be in a economically healthier position then they were before this decision.
            Second, FCS schools can take steps to enhance revenue streams outside of the on-field competitions with big schools. For example, very few schools FCS schools have media rights deals. Yet there are an increasing number of regional sports networks (RSNs) and national networks that are looking for programming. In fact, NBC Sports Network signed a media rights deal with the FCS Ivy League to “broadcast football, men's basketball. and lacrosse.” FCS schools can and should continue to pursue these deals to be less dependent on paycheck changes.
            Even outside of traditional revenue streams, FCS schools have opportunities to attract subsidies. One of the reasons that the Bowl Championship Series schools are in such a strong competitive position is that it has spent $670,000 in federal government lobbying since 2003. Because of its lobbying efforts, the BCS has helped defeat legislation ranging from preventing BCS bowls from losing their nonprofit status to reducing federal funding to “colleges participating in a Division IA college football season that lacks a head-to-head playoff.” And it is not just BCS schools that lobby Congress. The Mountain West Conference has spent $250,000 in federal lobbying over the same time period.
While FCS schools have limited resources, many of these institutions rely on public funds to subsidize their athletic programs. Yet many institutions do not lobby at the federal or state level for their athletic programs or rely the schools’ lobbyists for their athletic programs. As schools like UNI receive more state funding, it is unclear how much of that funding will go to its athletic department. Therefore, FCS can and should make larger commitments to lobby on their athletic programs’ behalf, especially if paycheck games are eliminated.
The primary problem with Belzer’s article, however, is his assertion that the elimination of paycheck games will lead to the elimination of NCAA Division I athletics. It is critical to remember that the BCS is not part of the NCAA. Instead the BCS is “a partnership among 11 college football conferences, the University of Notre Dame and four major bowls – Fiesta, Orange, Rose and Sugar.” Therefore, revenue generated by BCS games goes to NCAA schools but not the NCAA. According to the NCAA, “Most NCAA revenue comes from a 14-year, $10.8 billion agreement with Turner Broadcasting and CBS Sports for rights to the Division I Men’s Basketball Championship.”
One may argue that it is madness to have such a seemingly large organization completely dependent on one deal. However, this deal also means the NCAA will do everything in its power to ensure that there are enough Division I basketball programs to continue “March Madness” (also known as the Division I Men’s Basketball Championship). This requires that schools outside of the BCS have basketball programs that compete at the Division I level. In addition, this dynamic may allow smaller schools to actually ask for an increased amount of subsidies from the NCAA – especially given the elimination of paycheck games.
Belzer is correct that the elimination of lucrative football games will cause problems for smaller schools. It is a stretch, however, to say that this means the elimination of the NCAA as we know it. Instead, smaller schools need to examine non-traditional revenue streams and sources of financing to subsidize their athletic programs.    

Note: The current BCS will be replaced by a new post season structure in 2014. This includes a six bowl games and four team playoff to determine the national champion. The current system has five BCS bowl games and a national championship game between teams rated number one and number two in the BCS Standings. 

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