College Football Playoff Payout May Drop 10-15% With Attendance in Doubt
The College Football Playoff’s annual revenue distribution, typically in the $500 million range, could drop by 10% to 15% this season, according to executive director Bill Hancock.
The final total, which won’t be finalized until March, will depend primarily on how many fans are allowed into college football’s most important bowls. While sponsorship revenue may dip slightly, ticket sales and hospitality will be the main areas impacted if the games are held as scheduled in January.
“It is premature to say for sure, but my best guess would be somewhere 10-15% less than it would have been with no pandemic,” Hancock said.
It’s been a messy college football season, with a number of major conferences nixing fall games before later reversing course. Postseason games start in less than a month and BYU is 8-0, while in-state rival Utah is 0-0. More than 81 games have been cancelled or postponed nationally.
The playoff remains on schedule with the two semifinals—the Rose Bowl and the Sugar Bowl—set for the evening of Jan. 1, an extremely valuable TV window. The championship game is 10 days later in Miami.
To further complicate matters, there are three schools that aren’t playing football at all this fall. New Mexico State is still planning for an abbreviated spring season, while fellow independent UConn isn’t expected to play until next fall. Both will receive a “full” share proportional to the overall drop. So too will Conference USA, which has one member, Old Dominion, sitting out this fall. Conference USA representatives didn’t respond to questions about how they would distribute that share.
The NCAA doesn’t control the postseason for top-tier college football. That’s handled instead by various bowls and the CFP, which distributes revenue through a series of payments. The biggest checks go to the conferences—last season each Power Five league received roughly $66 million, while the five other FBS conferences split a pool worth roughly $90 million. There’s a small amount for the few independents, extra money for specific bowl participation and a cut for FCS conferences. In total, last year’s distribution was around $479 million.
The CFP’s revenue actually fluctuates quite a bit depending on the year, and this year was projected to be a bigger than last. That’s because the semifinals rotate each year between the six major postseason bowls—the Orange Bowl, Rose Bowl, Sugar Bowl, Cotton Bowl, Peach Bowl and Fiesta Bowl—and the CFP has a deeper business relationship with three of the six.
The CFP receives a portion of ticket sales from each year’s championship and semifinals, plus a portion of the gate at the Cotton, Fiesta and Peach Bowls if they’re not a semifinal. Since this season’s semifinals are the Rose and Sugar Bowls, the CFP is scheduled to receive ticket revenue from five bowl games plus the championship. Last season, when the semis were the Peach and Fiesta Bowls, it was three bowl games plus the championship.
Attendance for all those games remains uncertain. If the Rose Bowl were to be played tomorrow, for example, there would be no fans because of California and Los Angeles County guidelines.
The distribution money is important for schools large and small. New Mexico State, for example, is projecting a $3.2 million revenue shortfall because of the pandemic, so its payout could fill in about 10% of that total. Should the Big 12 distribute its payout evenly, Kansas’ share would be more than double what the Jayhawks sell annually in football tickets.
The College Football Playoff makes the bulk of its money from the 12-year, $7.3 billion deal it signed with ESPN in 2015. The partnership encompasses a lot more than just the TV rights; ESPN controls and sells many of the sponsorships to the highest-profile bowls, including the lucrative naming deals with brands like Chick-fil-A and Goodyear. Ticket revenue, which varies depending on the semifinal rotation, is typically between 5% and 10% of the overall CFP revenue.
Major sporting events have varied in their payouts during this pandemic-disrupted year. The NCAA, which expected to distribute around $600 million following this year’s men’s basketball tournament, cut that total to just $225 million after the 2020 event was cancelled. The prize pool for the Masters, which was held last week without fans, was the same $11.5 million as last year; the fan-free U.S. Open tennis tournament reduced its payouts by nearly $4 million.
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