B1G numbers: The price of home games

May, 20, 2014
May 20
9:00
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After taking a look at the most recent database of revenues and expenses in college sports, we're putting the Big Ten under the microscope. Our four-part series continues today with a look at the money Big Ten teams have paid to opponents over the years.

[+] EnlargeOhio Stadium
Kirk Irwin/Getty Images Ohio State is the league's largest athletic program with 36 varsity sports and a massive, often sold-out football stadium.
Michigan State athletic director Mark Hollis was scheduled to meet with reporters during the lunch break of Wednesday's Big Ten administrators' meetings, but he showed up earlier than expected.

He jokingly offered a possible reason for his escape.

"It seems like every vote we take," Hollis said, "costs us $100,000."

Expenses are rising for major-conference schools, especially with the welfare of college athletes in the national spotlight. One area that continues to get more expensive is the cost of home games, and the prices will continue to rise.

While Big Ten schools make millions from football games in their campus stadiums, they also are paying large guarantees for opponents to show up and play. According to recent analysis from "Outside the Lines," Big Ten teams paid nearly $42 million to visiting teams in all sports during the 2012-13 season (this includes Rutgers and Maryland, but not Northwestern, a private institution that doesn't report figures). The Big Ten, with its big football stadiums and broad-based athletic programs, paid more to opponents than any other conference. It's not a surprise considering many Big Ten teams make more than $3 million per football home game.

In 2012-13, Ohio State led the nation in money paid to opponents ($7,999,881), followed by Minnesota ($4,799,383) and Wisconsin ($3,987,864). Two other Big Ten teams -- Michigan State ($3,650,864) and Indiana ($3,375,562) -- finished in the top 10, and 10 schools finished in the top 25.

Ohio State has spent more on visiting teams in each of the past six years, averaging $7.4 million per year. Its total spent since 2007-08 ($44,418,002) is more than double that of the next Big Ten school, Indiana ($21,576,798). The simple explanation for the disparity: Ohio State is the league's largest athletic program with 36 varsity sports, and with a massive, often sold-out football stadium, it spends because it can.

"We’ll net north of about $7 million off of each [home football] game," Ohio State athletic director Gene Smith told ESPN.com. "That's why we can afford to pay that guarantee. If you're over 100,000 seats -- you look at Michigan, us, Penn State, Tennessee -- you have to look at their average ticket price, which is typically north of $75. Then, you're probably looking at $5-7 million that those stadiums are netting individually.

"So when you take out a $1-million, $1.2-million, $1.3-million guarantee, you can handle it."

According to the Associated Press, Ohio State will pay more than $2 million in guarantee money to its three home nonconference opponents this season (Virginia Tech, Cincinnati and Kent State). The Buckeyes also will receive an $850,000 guarantee for playing Navy in Baltimore.

These fees aren't new to college football. Many major-conference schools with big stadiums have been spending $800,000 or more on guarantees since the latter part of the last decade. In 2008, both Ohio State and Michigan State paid more than $5.5 million to road teams, finishing first and second nationally, respectively.

"We're in the market, we're part of that market because we’re a large stadium," Smith said. "It's just what you have to do today to get the mix."

The problem going forward is inventory, a word used by several Big Ten athletic directors at last week's meetings. Although the Big Ten moves to a nine-game league schedule in 2016, which reduces the number of nonconference games to schedule, the demand for nonleague home games remains high, if not higher. Big Ten teams will have five conference road games every other year, so to get the seven home games most need to meet budgets, all three nonleague games must be at home.

The Big Ten also has placed a moratorium on scheduling FCS opponents, a route many Big Ten teams have taken because FCS schools don't require return games and have relatively lower guarantee fees. So Big Ten teams in many cases must find FBS teams willing to play on the road without requiring a return.

"The issue with nine is inventory," Wisconsin athletic director Barry Alvarez said. "You're trying to schedule all [FBS] schools. The inventory becomes questionable. People don't want to go home-and-home. You try to stay at seven games at home, it's very difficult to do that in the year that you have four Big Ten games at home. So there are some issues."

One of them is cost.

"As the supply shrinks," Hollis said, "those that are in the window of who you want to play have the ability to ask for more."

Like many college football observers, Smith had hoped both the SEC and ACC would join the Pac-12, Big 12 and, soon, the Big Ten in adopting nine-game league schedules. But he didn't see it as a competitive balance issue.

The problem: inventory.

"If they'd gone to nine, obviously there's a lot more inventory out there because they would only schedule three [nonleague games]," Smith said. "Everyone is trying to schedule the same types of nonconference games in the same window of time, September. It's challenging."

Big Ten commissioner Jim Delany, while reiterating the need to avoid scheduling FCS opponents, says he will assist member schools with the scheduling dilemma. Some schools are exploring neutral-site games, which are lucrative and have gained greater popularity in recent years. Penn State AD Dave Joyner, who will watch the Nittany Lions open the 2014 season in Ireland, said, "It's almost like having a home game."

But Big Ten ADs also have been resistant to move games -- and the money they generate -- away from local markets.

"I don't know about the neutral-site thing," Minnesota AD Norwood Teague said. "We just built a stadium on campus, a beautiful new 50,000-seat facility. That was built for a purpose, and $150 million of that stadium was paid for by taxpayer dollars."

Hollis also has stiff-armed the neutral-site trend, but he acknowledged last week that MSU and longtime rival Notre Dame are discussing a neutral-site contest, possibly in Chicago.

"Some of us aren't traditional thinkers," he said. "You can come up with some creative ways that make sense for student-athletes, fans and … that you can meet your financial challenges."

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