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December 23, 2010 - Cost of going to bowl games is greater than payouts

Bloomberg News reported on the cost to schools in the highest competitive division in the NCAA  for their football teams playing in bowl games.   According to the article, at least 13 schools spent more to play in a football bowl game than their athletic conferences received in compensation. According to figures from public universities where open-records laws apply, those losses totaled more than $3.8 million.  The financial losses are a concern as taxpayer subsidies for athletic departments are on the rise and athletic programs are falling deeper in debt.

“Bowls have become network-owned, commercial enterprises, in some cases, pitting average teams in money-losing bowls for the benefit of a few,” said Charles E. Young, 79, president emeritus at the University of Florida and a member of the Knight Commission on Intercollegiate Athletics. “I think the losses are higher than anyone knows.”

“I buy television, and I buy bowl access,” Sun Belt Commissioner Wright Waters said in an interview. “I do it for the exposure for our schools and the enhancement of recruitment, and all the things that go with additional TV and bowl opportunities.”

According to the NCAA, the Big East conference received $400,000 for the participation of Rutgers University in the St. Petersburg Bowl last season.  It cost the Scarlet Knights $1.14 million to attend, according to Rutgers financial records. The Big East conference pools money from all of its bowl appearances, pays expenses to the teams that played in them, then divides the rest among all schools.  The difference in what Rutgers earned for the league by appearing in the bowl and what it spent to go came out of that pool, reducing the amount that each school received when the money is split up.  According to Rutgers’s financial records, the Big East conference gave the New Brunswick, New Jersey, school a $1.33 million revenue-sharing check -- based on the BCS distribution, bowl payouts and conference television revenue.  The Big East also incurred losses from the University of South Florida’s appearance in the International Bowl ($428,000) and the University of Connecticut’s appearance in the Papajohns.com Bowl ($430,000), university records said.

Other examples of bowls where participants spent more to attend than they earned for their conferences in the payout include the New Mexico Bowl, where Fresno State University spent $390,000 more than the Western Athletic Conference received; the Texas Bowl, where the University of Missouri spent $467,000 more than the Big 12 Conference received; and the New Orleans Bowl, where Middle Tennessee State University’s appearance cost the Sun Belt Conference at least $50,000.

The Mid American Conference has an agreement with the Little Caesars Pizza Bowl in Detroit for a school’s payout to be based solely on how many tickets it could sell. Ohio University received 10,000 tickets last year  valued at $450,000. It sold 2,181 tickets, generating $98,150, for a game in Detroit. Since its expenses were $164,464, the school lost $66,314 playing in the game, according to university records.

“There was a cost, but this is our business,” Ohio University Associate Athletic Director Dan Hauser said. “We’re about getting kids to the postseason in every sport, men’s and women’s. And they all cost money.”

Bloomberg reported on the cost of Rutgers University playing in a bowl game in relation to its current athletics budget situtation. Rutgers' athletic department received almost half its $58.5 million in revenue in 2008-09 from state subsidies and student fees, with $17.9 million coming from the university and $7.8 million in student fees. The school cut six sports teams to reduce expenses in 2007. None of its programs were profitable in the fiscal year ended 2009, according to the school.

Rutgers Athletic Director Tim Pernetti said attending bowl games helps him build his football program and neither he nor the conference wants to give them up. Instead, they’ll look more closely at expenses.

“The best-case scenario is the payouts going up,” Pernetti said in an interview. “But we also have to focus on keeping our budget tight and constantly look for ways to trim costs.”

Athletic directors say one of the biggest advantages in playing a bowl game is the extra two weeks of practice coaches get to work with underclassmen. The NCAA limits the number of practices a team can have each season, but gives bowl teams an additional two weeks.

Former Stanford Athletic Director Ted Leland, now vice president for external relations at the University of the Pacific in Stockton, California, says the system isn’t likely to change.

“It’s too late to put any kind of controls on the conferences anymore,” Leland said in an interview. “Everyone’s economic interests from the coaches to the commissioners are aligned now and they all benefit from playing in a bowl game.  If you are a conference commissioner and vote not to go to a bowl game, you’d lose your job. The athletic director would be viewed as disloyal to the football program and to the coaches who want their bonuses.”