The bowl boondoggle
Editor’s note: This is the first in a two-part series examining the bowl system. Coming Friday: Fact vs. fallacy when it comes to bowl game benefits.
Last month the Sugar Bowl Classic FedEx’d me a 408-page, full-color, coffee table book commemorating the 75th anniversary of the bowl game. It came in an engraved, pigskin leather carrying case. The book retails for $49.95, the pigskin case, maybe $10.
It’s a heck of a gift considering it came from people I’ve never even met.
CEO Paul Hoolahan wrote that he wanted to express his “sincere thanks for all you do.” It was sent to other media too. I sent it back since reporters shouldn’t accept gifts from bowl games.
The gift did serve as an example of how and why college football’s postseason got so hijacked, confused and corrupted. Bowl games have so much money to burn they ought to wear a ski mask for what they do to college athletics.
Yet schools don’t just allow outside businesses such as the Sugar Bowl to collectively make tens of millions off of them, they fight to the death to maintain the fleecing.
Bowl games, 34 strong this season, are great fun to watch. More football is never a bad thing.
At least as long as you don’t count the money, consider their entrenched resistance to change or realize why they and their outdated, overvalued worth to college football only occasionally gets discussed.
College football participates in one of the worst business arrangements imaginable. It outsources its most profitable and easily sold product – postseason football.
After spending an entire year investing in the teams, the system and the publicity to create a can’t-fail product it turns over its sale to an unnecessary third party who cuts nicely into the profits.
Fifty, 60 years ago – heck, maybe just 25 years ago – the fledgling sport of college football needed bowls as much as bowls needed college football. Vacation destinations drew in tourists by scheduling what were essentially exhibition games – the Associated Press used to vote on a champion before the bowls.
Then ESPN came along in the 1980s and changed everything. The sport is bigger, more popular and more national than ever.
Bowl games, especially BCS games, are relics of the past; a billion-dollar-a-year industry existing for no apparent reason. It’s been years since the NCAA needed to pay someone else to stage games.
Alabama vs. Utah at the Superdome in New Orleans would sell out just as quickly this year without the “Sugar Bowl Classic” name attached. If there’s any value to “tradition” it certainly isn’t the millions college athletics allows bowl committees to waste.
The reason the BCS pays up to $17 million a team (often it’s as little as $4.5 million) is because it can.
It’s not how much money college football gets from the BCS bowls anyway. It’s how much more would it get if it just staged the games itself.
The Sugar Bowl’s total revenue was $12.9 million in 2006 according to tax documents. Its chief expense is paying $6 million into a payout pool for BCS teams. The rest of the money for teams comes from a cut of television and sponsorship revenue.
The Sugar Bowl can do whatever it wants with the other $6.9 million (or however much it can drum up).
Like the other BCS bowls it’s a not-for-profit, so while no individual is walking away with millions, the enterprise appears to be little more than a massive boondoggle. For the politically connected, a BCS game is the Mississippi River of gravy trains.
Scanning recent tax documents, the Sugar Bowl spent:
• $1.3 million in employee salaries in 2006, including $453,399 in total compensation for Hoolahan
• $494,177 in unspecified “entertainment” (in 2005)
• $455,781 on unspecified “special appropriations” (in 2006)
• $348,487 in “Sugar Bowl entertainment” (in 2006)
• $188,305 on “Hall of Fame” (in 2005)
• $176,277 on “media relations” (in 2006)
• $118,004 on “decorations” (in 2006)
• $114,666 on “committee meetings” (in 2006)
• $84,255 on “conference relations” (in 2006)
• $82,884 on “other expenses” (in 2006)
• $60,932 on “gifts and bonuses” (in 2005)
• $58,995 on “liaison” (in 2006)
• $46,017 on “conference meetings” (in 2006)
Overall the Sugar Bowl spent $11.1 million in 2006 alone. The SEC operated its 2007 Championship Game (in effect a bowl game) for just $2.1 million. The ACC managed to pull off its 2006 title game for $1.2 million.
It’s not easy making a single, three-and-a-half-hour football game cost over $11 million; which might explain why the Sugar Bowl has an actual “committee on golf.”
Then there’s the “special committee on ladies’ entertainment” (which may or may not have anything to do with the “conference relations” tab being so high).
Then there’s the cronies-only-need-apply “football committee” which spent $272,231 in 2006. A good portion of that allowed guys to fly around and watch regular-season games. Despite having to wear a garish sport coat, it remains one of the greatest deals on earth.
To say all this scouting couldn’t be done via basic cable overstates the case. BCS games are unapologetically determined not by the quality of the matchup but the potential for revenue – hence 10-2 Ohio State over 12-0 Boise State in this year’s Fiesta Bowl.
As for the Sugar Bowl, its $272,231 committee selected for its January 2007 game LSU vs. Notre Dame.
To understand the earning potential of the local power against the nation’s biggest television draw didn’t require seeing a single play all season. And you certainly don’t need to be the Sugar Bowl to make it work. It isn’t a lot more complicated than renting the Super Dome and counting the money.
It’s not just the Sugar Bowl. The Orange Bowl did over $17.9 million in revenue and the Rose Bowl over $10 million according to 2007 tax records. Both spent almost all of it.
The Arizona Sports Foundation, which played host to two bowls in January 2007 (the Fiesta and the BCS title game), did $19.7 million and came out down a million. It spent almost $21 million to stage two games.
The Sugar Bowl apparently didn’t play enough golf. It actually netted a $1.1 million profit. Not that it had to pay any taxes. Almost none of the bowls do, the entire thing is tax-free.
Smaller bowl games aren’t much better. They can be terrible financial deals for participating schools, which often lose money.
The bowls don’t lose any though. Sam Williams, the head of Chick-fil-A Bowl, made $734,089 in total compensation in 2007.
As for waste, the Music City Bowl once famously spent $7,200 on an office miniature golf tournament.
The Orange County Register reported that despite all of this, seven bowls went to politicians with their hands out and “received $21.6 million in government funding from 2001 to 2005.”
Count the Sugar Bowl among them. Thanks in part to a lobbying firm it employs in Baton Rouge, it took in $1 million from local governments.
That’s almost its exact “profit,” not that the money was sent back. As we all know, post-Katrina there aren’t any pressing needs in Louisiana.
The Sugar Bowl meanwhile ended the year with $28.3 million in reserves.
The bowl people will tell you how they do all sorts of good for the game and the community and so forth. The conference commissioners talk glowingly about their “long-term business partners.”
The two sides sound like Stephon Marbury and the Knicks trying to explain their current situation. It’s just a circle of nonsense. None of it is worth repeating.
No one has an honest explanation why college athletics, which are dealing with dwindling donations and soaring stadium construction debt, continue to allow the bowls to make fools of them. “Tradition” is often cited but who allows themselves to be ripped off each year out of nostalgia for previous ripoffs?
The conference commissioners who run the BCS normally are famous for chasing every spare nickel with vengeance.
They loathe sharing any money with anyone. It’s the basis for the BCS in the first place. They’ve created their own television networks, websites, basketball tournaments and marketing departments.
They’ve even created their own de facto bowls (i.e. conference championship games). The SEC game did $13.7 million in revenue in 2007, allowing the conference to pocket almost $12 million in profit.
The ACC saw that and decided that its own 51-year history was worth selling. In 2004 it forever altered its Tobacco Road roots by expanding from New England to South Florida. A chief motivation was so it could stage its own title game. (It hasn’t worked; the ACC game has been low-rated and poorly attended.)
If the ACC had just joined up with another league and muscled out say two bowls it currently sends teams to – the Chick-fil-A alone had $12.3 million in revenue in fiscal 2007 – one of the motivations for expansion would have been gone.
Instead it cared more about the tradition of a fast food restaurant than its own.
The question is why? Why do normally control-freak, revenue-obsessed commissioners go soft on this?
The simple explanation is that the BCS is a cartel and the bowls are a costly but important way to block the NCAA’s central office from participating. The NCAA has nothing to do with major college football’s postseason; it doesn’t even officially recognize a champion.
Adopting a playoff system would be vastly more profitable, but doing so would likely require the NCAA to run the event.
The conference commissioners would be dealing with a bigger revenue pie and even larger shares for themselves and their conferences. But they’d have to give up the cutting knife.
While some are in favor of progress, some aren’t. Until at least a strong majority agree, everyone is willing to watch these bowl operations party away tens of millions of their money.
In this case power isn’t money. It’s more valuable.
The result is a bowl business so awash in easy cash it has nothing better to do than overnight me an expensive book inside a custom leather case. That gift, in turn, is a small example of how bowl games roadblock any reform.
If you’re Hoolahan, would you want anything to change?
Bowls are adept at buying goodwill and better press. Covering a bowl game is to be offered food, booze and gifts at nearly every turn. The media hotel is often opulent, only with rooms at a cut rate. BCS games throw elaborate media parties on cruise ships or in big nightclubs.
This year the Rose Bowl upped the ante by throwing a media party in Pasadena in September.
I cover just about every major sporting event in the country and there is simply nothing like a BCS bowl game when it comes to trying to buy off the media. And I don’t attend, accept or ask for anything. Imagine what’s available if you do.
My media peers will tell you none of this graft matters, and for some that’s true. They are wonderfully untroubled at the idea of draining a person’s vodka supply by night and ripping them by morning.
Most, however, are absolutely kidding themselves. The bowls wouldn’t offer all this stuff unless it worked.
Then there’s ESPN, which isn’t just in the bag for bowl games because it broadcasts nearly all of them (including starting in 2010 the BCS games). It actually owns and operates six smaller bowl games.
It’s no surprise ESPN’s coverage of the BCS system remains mostly shallow.
Inadvertent or not, the media daze has created an overvaluing of bowl games that even critics of the BCS often don’t realize.
You’ll rarely read or hear about a “BCS solution” that doesn’t believe you “must include the bowls.” Playoff proposals are offered up so certain bowls host the quarterfinals and certain bowls the semifinals and so on.
Doing such a thing would be absurd. No sensible person would ever continue to follow this business model. The media should be leading the charge against these wasteful operations, mocking campus leaders for being so foolish.
The best way to stage a football playoff is how the NCAA does it on all other levels, using the home field of the higher seed before going neutral site for the title game.
Even if college football just wanted to continue the BCS it could cut out the middle men by operating its own games in these same cities, a la the men’s basketball tournament.
The ticket money would stay in house, the TV cash would stay in house, just about everything, in fact, would stay in house.
College football is so strangely corrupt it prefers the outhouse. At least they provide reading material.