College Basketball Nation: Kristi Dosh

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In May 2011, the Big East turned down a TV broadcast rights deal from ESPN reportedly worth $11 million per school -- annually. Rights fees for conferences had been on the rise, and conference leaders were sure waiting for a better offer would pay off in a big way.

That was before the Big East lost Pitt and Syracuse to the ACC. Before TCU announced it was joining the Big 12 instead of officially becoming a Big East member. And before West Virginia left the conference to join TCU in the Big 12.

True, the Big East has since added Central Florida, Houston, Memphis and SMU as full members, along with football-only members Boise State, San Diego State and Navy. But safety isn’t in numbers -- it’s in the revenue provided by the most lucrative TV deal possible.

Today’s announcement that CBS executive vice president Mike Aresco will become the commissioner of the conference confirms the Big East is making television a priority. Aresco has led programming for CBS since 1996, handling such negotiations as the NCAA men’s basketball tournament and the 15-year SEC contract.

(Read full post)

Analysts and Vegas oddsmakers may be giving an edge to Kentucky in its Final Four matchup with Louisville on Saturday, but off the court the Cardinals may walk away as the big winner, regardless of the score.

It’s quite likely Louisville will end up as the more successful program once dollars are counted. It’s happened before: Louisville’s net revenue from men’s basketball was higher than any other program in the country last year. At $27.5 million, it dwarfed Kentucky’s $6.5 million, according to NCAA data.

It would be easy to conclude that Louisville’s inaugural season in the KFC Yum! Center propelled the program to its revenue highs. But in Louisville’s last year at Freedom Hall, it still made $11.6 million more than Kentucky.

[+] EnlargeKFC Yum! Center
Mark Zerof/US PresswireThe KFC Yum! Center in Louisvile, Ky., seats 22,000 people.
What about the fact that Louisville sells alcohol at basketball games? The athletic department receives only 50 percent of concession revenue at KFC Yum! Center, which netted out to $421,000 last season.

The biggest difference between the schools comes in a category the NCAA calls “contributions,” which include donations to the athletic department, the majority of which come from the minimum donations people must make to be eligible for suites and other premium seating.

Louisville received more than $20.2 million in basketball-related contributions last year. Kentucky, which did not allocate by sport, received a total of $14.6 million for all sports combined.

In Freedom Hall, Louisville basketball’s previous home, it made $1.6 million on suite rentals and $10.8 million in ticket-related contributions. In its new arena, those numbers skyrocketed to $5.7 million and $17.2 million, respectively, last year.

How much is Kentucky making in suite rentals and ticket-related contributions? Nothing. Zero. Zilch. Nada. Rupp Arena doesn’t have a single suite for the University of Kentucky to sell.

While not uncommon (it’s the same at Georgia, Florida, Alabama, Mississippi State, Ole Miss and Texas A&M, for example), Kentucky is missing out on big money. Tennessee’s suites, added in 2008, each run $35,000 to $50,000 annually. At South Carolina, suites bring in $42,000 each.

Kentucky might not be missing out for much longer, though. The Arena, Arts and Entertainment District Task Force in Lexington has studied renovating Rupp Arena or building a new facility. One key component of the renovation plans would be suites for Rupp Arena. The demand would seemingly be there. During Rupp Arena’s 34-year tenure, Kentucky has led the nation 22 times in home basketball attendance.

The Wildcats’ contract with Rupp Arena expires in 2018, the same year the current renovations would be completed. But the renovations are not fully funded, and it might be two years before they could begin.

University of Kentucky president Eli Capilouto has not supported either a new arena or the renovation of Rupp, noting the campus has other priorities that may need state funding.
One of the most frequent sources of debate and disdain when it comes to college football’s Bowl Championship Series is the disparity between payouts to automatic-BCS-qualifying conferences and non-automatic qualifiers.

It turns out that gulf is just as big when it comes to NCAA distributions from March Madness.

Last year, the Big East brought home more men’s basketball tournament money -- $24.9 million -- than any other conference. The most a non-automatic-qualifier conference brought home was Conference USA, at $6.95 million.

Not much is likely to change this year, as 14 of the Sweet Sixteen teams hail from automatic-qualifying football conferences. Nine are from the Big East and Big Ten conferences.

Since automatic-qualifying conferences were formed in 1998, no school outside of those has won an NCAA men’s basketball national title, and every champion since 1967 would fit into today’s FBS conference lineup. Just three national championship games since 1998 have featured a team from outside such conferences.

Although March Madness produces revenue of $771.4 million a year, as compared to $162.5 million generated by the BCS’s television contracts, the majority of conferences receive more revenue from the BCS than from the NCAA’s Basketball Fund, as the table shows.

Schools from the six automatic-qualifier football conferences brought home 47.5 percent of all money distributed by the NCAA based on performance in the tournament, while the five non-automatic-qualifier conferences banked 10.5 percent. The rest went to teams whose conferences play football at a lower level. In football, the disparity is even starker: automatic-qualifier conferences took home 85 percent of all BCS money distributed last year.

March Madness is the primary revenue generator for the NCAA, so not all money is distributed based on performance in the tournament. For 2010-11, the NCAA distributed $452 million of the approximately $771.4 million produced by its television contract.

Just $180.5 million was distributed based on performance in the NCAA tournament through what’s called the “Basketball Fund.” An almost identical amount was distributed based on how many sports each school sponsors and how many grants-in-aid each supports. The remainder is distributed for academic programs and financial assistance for student-athletes.

The Basketball Fund portion of the NCAA’s distribution each year is based on how many units each team in the tournament earns. Each team in each game except the championship game receives a unit for playing. This year each unit is worth $242,000.

Money is distributed based on a six-year rolling period by adding up all of the units earned by each school during the preceding six years. Checks are cut to the conference, not the individual school which participated in the tournament, unless the school is independent. Each conference then chooses whether to divide the money equally or based on tournament performance.

The SEC has historically divided the money it receives into 13 equal shares, with the conference keeping one share, after reimbursing participating teams for travel and rewarding them for performance. In addition, schools receive $50,000 for participating in each round up to the Final Four and $100,000 for appearing in the Final Four.

The Big 12 distributed by an entirely different method in 2010-11. Each member institution was awarded an amount equal to the units the school earned in the current fiscal year. Revenue from units earned by members during the previous five years was divided equally among all members. The conference did not supplement travel or other expenses.
College basketball might be in for a bit of conference-tournament realignment. The issue, of course, is money -- and determining where conferences and host cities can make the most of it could force a few tournament-location changes in coming years.

College basketball tournaments are multimillion-dollar moneymakers for conferences and host cities. Some cities, like Las Vegas and New York, experience a windfall every year, but others like Atlanta and Kansas City are fighting to play host to tournaments more often. Other cities are simply trying to hang on to the tournaments that call them home.

The Big East’s tournament is one of the most successful each year and is in its 30th year at Madison Square Garden. And though it’s in the first year of a five-year extension at MSG, the conference appears close to signing a deal keeping it there through 2026.

Last year, the conference saw its most-attended tournament in total attendance and ranked second, behind the ACC, in average per-session attendance.

The ACC tournament, which annually ranks first or second in total attendance and average per-session attendance didn’t sell out this year ahead of tournament play, even though games are being held in the 19,300-seat Phillips Arena in Atlanta instead of the much larger Georgia Dome. The 2001 tournament in the Georgia Dome was the most-attended conference basketball tournament in NCAA history for both total attendance (182,625) and per-session attendance (36,605).

Big 12
Ron Chenoy/US PresswireThe Big 12's tournament has rotated between Kansas City, Oklahoma City and Dallas over the past decade, and its future location is not yet set.
The result? The Atlanta Sports Council estimated a total economic impact that year of more than $31 million. But when the Georgia Dome hosted the tournament again in 2009, the impact dropped to $22.9 million.

Dan Corso, executive director of the Atlanta Sports Council, said this year’s tournament will provide greater economic impact than in 2009.

“The economic impact this year, dependent upon how many visitors attend the event, is estimated at approximately $25 million,” said Corso.

The economic impact isn’t as profound for the Big Ten tournament, although it ranks in the top five in terms of attendance each year. John Dedman, Indiana Sports Corp.’s vice president for communications, said the total for the men’s and women’s tournaments in Indianapolis this week is expected to be $12 million to $15 million. “The majority of that economic impact is on the men’s side,” said Dedman.

By comparison, Dedman said the inaugural Big Ten Football Championship Game, which was held in Indianapolis in 2011, generated $17.7 million in economic impact.

The Big 12’s tournament has rotated between Kansas City, Oklahoma City and Dallas over the past decade. The future site is the source of much debate as Missouri leaves the conference for the SEC. The combined economic impact of both the men’s and women’s basketball tournaments in Kansas City is $14 million.

The men’s tournament is in Kansas City through 2014, but the conference announced in November the women’s tournament would leave for Dallas in 2013 and play in Oklahoma City in 2014.

Another tournament potentially on the move is the Pac-12’s championship. Also a perennial top five in attendance in recent years, it is concluding an 11-year stint in Los Angeles this weekend. Commissioner Larry Scott confirmed this week that moving to Las Vegas or Seattle is possible, though there is also the possibility of staying in Los Angeles.

Las Vegas already hosts three conference tournaments: the Mountain West, Western Athletic and West Coast.

“We have not thought a lot about other leagues,” Scott said. “I think more about TV and what our TV windows would be and how they would match up.”

Mountain West coaches may be hoping the conference’s merger with C-USA will result in a new location for their conference tournament. The games are currently played on UNLV’s campus, which has caused some coaches concern over the possibility of a home-court advantage.

“I think it’s absolutely unfair,” San Diego State coach Steve Fisher said during this week’s coaches’ teleconference. “It’s not done in any other major conference.

The Mountain West played its tournament at the Pepsi Center in Denver from 2004-06, but attendance paled in comparison to Las Vegas. The highest attended tournament in Denver drew a total of 37,300, whereas Las Vegas has averaged nearly 57,000 each of the past five years. Last year, the tournament drew a record high of 69,913.

In a 2009 study prepared for the Las Vegas Convention and Visitors Authority, the economic impact of the Mountain West tournament brought $6.4 million in non-gaming economic impact to Las Vegas.

Colorado State coach Tim Miles implies it’s the money that has really mattered in the choice of the host city.

“As coaches, we’ve asked for this to be changed and it’s been voted down each time,” Miles said. “When those kids get the bracket and the first thing they do is drop their head because they’re on UNLV’s side of the bracket, or they breathe a sigh of relief they’re not on UNLV’s side of the bracket, it really makes a difference.”

“You can’t tell me any of this was done in the best interest of the student-athletes.”

Sports key to New Orleans' resurgence

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With New Orleans hospitals, schools and basic infrastructure in dire need of rebuilding following Hurricane Katrina, many taxpayers wondered aloud why the Federal Emergency Management Agency would allocate $156 million for a renovation of the Superdome.

Sure, the stadium was eligible for FEMA funding because it was state-owned, open to the public, and it sustained damage during Katrina. Yet questions came, anyway.

But for Louisiana, it marked an “If You Build It, They Will Come” idea. Fast-forward six years, and note that the Mercedes-Benz Superdome -- on the heels of a $336 million, multiphase renovation -- is in the midst of playing host to a string of the country’s major sporting events.

[+] EnlargeMercedes-Benz Superdome
Chris Graythen/Getty ImagesThe Mercedes-Benz Superdome before the All-State BCS National Championship Game.
In addition to the annual Sugar and New Orleans bowls, the city that hosted the Allstate BCS National Championship Game Monday night also has Saints playoffs games this winter, the SEC men’s basketball tournament and men’s Final Four this spring, the Super Bowl in February 2013, and the women’s Final Four a few months later.

Landing such events was part of the post-Katrina recovery plan, says Mark Romig, chief executive officer of the New Orleans Tourism Marketing Corp., and a member of committees for the Super Bowl and Sugar Bowl. “We knew for us to come back and to lift ourselves up, we had to go through this process.”

Romig says New Orleans annually ranks at or near the top of the list in hospitality jobs nationally, with between 70,000 and 80,000 positions. He says that number is “very close” to pre-Katrina levels and that there are more restaurants in New Orleans than before the hurricane, and hotel numbers are comparable.

John Williams, interim dean for the University of New Orleans’ College of Business Administration, attributes much of the city’s jump from $4.3 billion in tourism spending in 2009 to $5.5 billion in 2010 to sports. Business travelers are staying an average of 2.2 days longer than their business plans, he says, often to attend sporting events.

Williams says studies also show fans visiting for sporting events are more likely to patronize local restaurants than other tourist segments, like day visitors or business travelers. It’s why he thinks the city has seen a jump in restaurants from 805 pre-Katrina to 1,230 today. “Sports are really key to that,” he says.

Williams says the city saw a 6.6 percent growth in tourism-related jobs in the first quarter of 2011 alone. While numbers have not yet been vetted for the remainder of 2011, he says the city has been experiencing a snowball effect since hosting Saints playoff games in 2009.

Romig says hosting events like the BCS game Monday essentially provides the city with immeasurable free advertising to help boost tourism unrelated to sporting events. ESPN logged more than 36 hours of programming on sets around New Orleans in the week leading up to the game, not counting the game itself, pre- or postgame shows or halftime shows.

Asked to estimate the value of the advertising New Orleans received around the BCS National Championship Game, Malcolm Turner of Wasserman Media Group says, “There’s no question we’re talking in the tens of millions of dollars.”

The projected economic impact from the recent Sugar Bowl and BCS National Championship Game was $400 million. The R&L Carriers New Orleans Bowl played on Dec. 18 and the Saints playoff game last Saturday were expected to contribute another $45 million. But the Super Bowl is the big revenue generator, with estimates at about $900 million.

A&M, Missouri see the nation in SEC move

November, 15, 2011
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Of all the conference realignment possibilities, debates and related goings-on, Missouri’s move to the SEC may have gotten the least attention -- in large part because of the ongoing Penn State scandal.

No doubt that’s fine for Missouri officials now -- and recent SEC addition Texas A&M -- but not being in the national dialogue won’t stand once the teams begin SEC play. Where some fans see both moves as lateral for the teams, university leaders see otherwise: moving to the SEC with play starting in 2012-13 is a chance to grow their brands nationally.

“The top decision factor for A&M going to the SEC was about increasing national visibility and exposure,” said Jason Cook, A&M’s vice president of marketing and communications. It’s no coincidence, he said, that six of the top 10 and nine of the top 25 top-selling brands for IMG College are SEC members.

Cook said looking no further than your TV screen underscores the opportunity: the recent Aggies game against Iowa State was the game selected by Big 12 first-tier rights holder ESPN, which showed the game on ABC regionally. Cook said it wasn’t even shown across the entire Big 12 footprint, much less nationwide. But that week’s game on CBS, the SEC’s first-tier rights holder, appeared in homes from coast to coast.

Referring to the Big 12’s new, second-tier television deal with FOX set to begin next season, Cook said: “While some look at the Big 12’s contract and see it as good from a financial standpoint, from an exposure standpoint, it doesn’t get coast-to-coast coverage.” This would put A&M in the same situation it was in for the Iowa State game, when broadcasts are via regional network and not nationwide.

Increased exposure nationally through athletics can help educate prospective students learn about the university, too, he said. A&M is still thought of by many to be an all-male military institution. One other important advantage: “We can set the marketplace in the state of Texas for the SEC,” Cook said, as the school will be the conference’s lone Texas brand.

From a licensing standpoint, Cook said consultants have projected revenue to increase by up to 60 percent as a result of the move.

Missouri officials have mentioned similar benefits, but Chris Koukola, assistant to the chancellor for university affairs, focused mostly on academic benefits in a recent interview.

Officials from the admissions office will look at extending their out-of-state reach, particularly in Florida, where they have a large number of alumni. Koukola also mentioned the expanded research opportunities available for faculty.

What Koukola said she most looks forward to is the opportunity to participate in a group the SEC has formed of administrators in a similar communications position. She said the Big 8 had such a group, but it was never active once the Big 12 was formed. This cooperative element adds value to their move that often goes without mention, she said.

West Virginia lawsuit one worth watching

November, 1, 2011
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West Virginia University didn’t hand out a Halloween treat to the Big East when it filed a lawsuit against the conference in a Morgantown, W.Va., court.

Full of legal claims like “breach of contract” and “breach of fiduciary duty,” the lawsuit seeks to allow West Virginia to escape to the Big 12 without having to serve a 27-month mandatory waiting period required by the Big East’s bylaws. I’ve explained previously why the Big East might enforce this provision.

Here’s what West Virginia claims:

1. That the bylaws are void because of any one of the following reasons:
  • There has been a “material breach” of contract. WVU alleges that the Big East and its commissioner breached their fiduciary duties to the university by failing to keep the Big East a viable football conference.
  • WVU’s performance under the contract has become “impossible or unreasonably burdensome” because the university contends it has always valued the strength of the Big East as a significant football conference.
  • The principal purpose of WVU entering into an agreement with the Big East has become “substantially frustrated.” This means that although WVU could still perform under the contract, its purpose in entering into the contract has been destroyed.

2. That a new conference agreement was made between WVU and the Big East when the Big East accepted a $2.5 million payout from West Virginia when it told the conference it was leaving.

3. That the 27-month exit provision is an “unreasonable restraint on trade,” meaning WVU believes the provision isn’t necessary to protect the Big East’s interests.

Here are the counter-arguments the Big East could be expected to make:

With regard to the material breach claim, one factor courts will examine is whether WVU is deprived of the benefit it expected to receive from its Big East contract. To this end, WVU states in its lawsuit that the material breach is due to the commissioner’s “failure to maintain a ratio of football-to-non-football universities of eight-to-eight and maintaining and enhancing the level of competition in the Big East football conference.”

However, the Big East can be expected to argue that during the 27 months WVU will remain a member of the conference there will be eight football members, as other defectors Pitt and Syracuse will also be held in the conference through the 2013 season as part of the 27-month requirement. In addition, the BCS has confirmed that the Big East will remain an BCS football conference through the 2013 season.

WVU’s claim that performance under the bylaws has become “impossible or unreasonably burdensome” relies in part on the assertion that the Big East is “no longer a viable and competitive football conference.” Again, the Big East will likely argue that there will be no change during the seasons WVU will continue to compete as a conference member, and the conference will operate the same in 2012 and 2013 as it did in 2010 and 2011. The same argument will likely be used to oppose WVU’s claim that its purpose in entering into an agreement with the Big East has been “substantially frustrated.”

Another argument by WVU is that even if the bylaws are valid, a new agreement was struck with the Big East for immediate withdrawal upon payment of $2.5 million. WVU claims the Big East accepted the new agreement by accepting the payment. However, the Big East requires such a payment be made when a school notifies the conference of its plans to exit, with another $2.5 million to be paid by the time a school exits. Without additional evidence from WVU on the new agreement it claims was reached, it appears the Big East could argue WVU was only remitting payment as required.

West Virginia’s final argument is that the 27-month withdrawal period is an unreasonable restraint of trade, one that is unnecessary in order to protect the Big East’s interests. Here, attorneys likely will point out that the Big East has already waived its right to enforce the 27-month notice period because it allowed TCU out of its commitment; essentially, the conference can’t hold one school to the 27-month period and not another. Big East Associate Commissioner John Paquette said Tuesday afternoon that the Big East had a separate agreement with TCU that stated if it left before competing, it would not be subject to the 27-month provision.

Paquette said Monday evening that he could not reveal whether WVU voted in favor of the 27-month withdrawal period in the bylaws when it was added. But he did point out: “David Hardesty, the former WVU president, helped write the current withdrawal policies.” Expect the Big East to bring this up in its response to the lawsuit.

The case is important, because it will likely decide the Big East fates of Pitt and Syracuse, which are bound to stay through the 2013 season before heading to the ACC. Although each of those schools could file suit in their respective states, Washington, D.C. law (where the WVU suit will be heard) would govern, according to the Big East bylaws. So any decision in WVU’s case would create precedent for any case filed by Pitt or Syracuse.

Additionally, any decision rendered by a court in this case could impact future conference realignment involving any other conference. Although the decision wouldn’t have to be followed by courts in other jurisdictions, it could be persuasive. No doubt WVU is gambling on the Big East settling the case before a decision is rendered which could impact conference realignment for years to come.
This post has been corrected. Updated post:

My colleague, Joe Schad, is reporting that the Big 12 has told West Virginia it will be accepted into the conference pending formal approval, which could happen very soon.

While Texas A&M and TCU, which recently announced conference moves, will join their new conferences for the 2012 season, Schad notes the Big East could try to keep WVU, along with Pitt and Syracuse, in the conference for up to 27 months, per conference guidelines.

Why would the Big East play hardball with its defectors? Because more than $20 million per year is at stake given the Big East's automatic-BCS-qualifying status.

For the 2011-12 school year, BCS conferences will receive $22.3 million for their qualifying team and can earn another $6.1 million if another member receives an at-large berth. A non-automatic-qualifying conference team selected for a BCS game receives $26.4 million but must divide that revenue with the other four non-automatic-qualifying conferences.

If the Big East were to lose Pitt, Syracuse and West Virginia at the end of this school year, it could jeopardize the Big East’s future BCS status. Here’s how it works:

Current BCS conferences were determined based on data from the 2004-07 football seasons. Data from the 2008-11 seasons will be reviewed following this season to determine if a seventh conference makes the cut to be an automatic-qualifier for the 2012 and 2013 BCS bowl seasons. BCS guidelines also provide for the following formulas to be used if the BCS format remains the same or similar following the 2013 season. At that point, results from the 2010-13 seasons would be used to determine which conferences without bowl contracts will be AQs for the 2014-2017 seasons. The Big East is the only of the current BCS conferences without a bowl contract.

This is where the situation could get dicey for the Big East under the next review.

Three sets of data are considered in the review: First, the average ranking of the highest-ranked team in the BCS standings over the four-year period; second, the average rank of all the conference’s teams based on rankings from each of the six BCS computers over the four-year period; and third, something called a conference’s Adjusted Top 25 Performance -- a calculation based on a conference’s number of teams in the Top 25 of BCS standings over the four-year period as a percentage of the top conference in this calculation, which would have been rated 100 percent.

The threshold for qualification requires a conference to be in the top six in the first two sets of data and in the top 50 percent in the third set of data. However, a waiver can be obtained from the BCS’ Presidential Oversight Committee if a conference is in the top six of the first two sets of data and top 33 percent of the third set, or top five of one of the first two sets and top seven in the other, along with top 33 percent of the third set.

When asked how conference realignment might affect these reviews, Maxey Parrish of the BCS said: “Since it's impossible to determine how a team would have played had they been a member of another conference, the rankings count for the conference schools [which] were members of [the conference] at that time. For example, TCU is not factored into the Big 12's status as an AQ until the 2012 season.”

The Big East's 27-month waiting period for members exiting ensures the conference will have suitable time to find a replacement and that current members will be included in automatic-qualifying calculations following the 2013 season, which is when new BCS agreements would have to be put into place following the expiration of current ones.

An Oct. 25 blog post about the Big East and its BCS conference status contained incorrect information provided by the BCS about how conferences achieve and hold BCS status. Current BCS conferences do not have to undergo an annual review to retain status – that applies only to non-BCS conferences that are seeking BCS status. Updated story

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