SEC: College Sports Business

Current non-automatic qualifying conferences might receive better access on the playing field under college football’s new playoff system, but it doesn’t sound as if they will have better access to the cash. Although there is expected to be more money to go around -- projected at anywhere from two to four times the current television revenue of $155 million per year -- how revenue would be distributed proportionately under the new system might not be all that different.

Under the current system, non-AQ conferences split approximately 18 percent of BCS revenue if one of their teams is selected for a BCS bowl game, and 9 percent if not. The AQs take home the rest.

“I think it’ll be adjusted modestly, but the five conferences are still going to get the lion’s share, it’s just how big of a lion are we talking about,” said Gary Ransdell, president of Western Kentucky University and a member of the Presidential Oversight Committee, which meets this week to finalize playoff plans.

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The Atlantic Coast Conference’s television contract extension with ESPN, announced Wednesday, is the first of three major conference deals expected to be finalized in the next few months.

The ACC contract was extended after the addition of new members Syracuse University and the University of Pittsburgh last September. The shifting of schools as part of conference realignment also led to changes in the Big 12 and Southeastern Conference that has those existing deals in play, too.

The ACC deal is worth $3.6 billion over the next 15 years, according to The Associated Press. That puts the ACC behind only the Big Ten and Pac-12 in terms of the average revenue per school, per year by one measure (viewing all current contracts divided between conferences’ 2012-13 membership.)

SportsBusiness Daily has reported the Big 12 has verbally agreed to a new contract with ESPN and FOX for its first-tier rights for $2.6 billion over 13 years. That would bring the per-year average for the Big 12 to $200 million and the per-school, per-year average to $20 million. The SEC is expected to reopen its contract talks with ESPN following the addition of the University of Missouri and Texas A&M.

ESPN had no comment on any of the deals, which vary in what slate of rights are included, but a spokesman did say that the network is in regular contact with its business partners.

With all of the shuffling and extensions, it can be hard to keep up. Here’s a listing, according to information from The Associated Press, SportsBusiness Daily, SportsBusiness Journal and Adweek, of where things stand now. The Big 12 extension is not included because it has not been finalized. Also, per-year averages and per-school, per-year averages are straight averages and do not take into account actual variances by year as stipulated in individual contracts.

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Say what you will about how it all ended, but this much is certain about Bobby Petrino’s tenure in Arkansas: He meant victories and money during his four years there.

From former coach Houston Nutt’s final season in 2007 to the 2010 season under Petrino, the Razorbacks saw donations to the football program rise a whopping 359 percent, with a more than 80 percent growth from 2009-10 to 2010-11, to $15.4 million. No other SEC school saw such growth in that time period: Auburn’s donations increased by 15 percent, while Florida saw a 9.7 percent increase. Georgia came in lower at 3.9 percent, and LSU saw donations decrease by more than 13 percent.

The figures come from data each university provides to the NCAA, and while it’s important to note that every athletic department handles donations differently -- some schools only take what they need each year from their fund-raising pots -- there’s no arguing Arkansas has seen a huge influx of cash during Petrino’s tenure.

Football revenue overall rose by 54 percent during Petrino’s first three years, to $61.1 million. Auburn, which won a national title during that time period, saw a 30 percent increase. LSU’s revenue growth came in at 13 percent to $69.1 million.

Petrino, who was in the middle of a seven-year contract under which his salary averaged $3.53 million, put teams on the field that had fan-friendly high-powered offenses.

“Under Petrino, the team averaged 94 percent capacity for home games. It was only 91 percent under [Houston] Nutt,” said Scott Prather, one of the founders of Coaches by the Numbers, a website dedicated to gathering statistical data on football coaches. “If you figure each ticket at an average of $50 per ticket, that’s nearly $600,000 per year.”

Petrino’s last two teams won 81 percent of their games, the best two-year record for any Razorback coach since 1988-89 under Ken Hatfield. In his Tuesday press conference announcing Petrino’s firing, Arkansas athletic director Jeff Long acknowledged he has a tough road ahead as he searches for a new football coach.

“It's a difficult time of year to be searching for a head football coach, no question,” said Long.

Replacing a successful coach is also potentially difficult timing for the athletic department, which broke ground on a new football complex last fall as part of a comprehensive athletic facilities master plan for many sports. The master plan, which aims to be funded solely by private donations, is estimated to cost up to $327 million at full completion.

Heather Collart, a former athletics administrator who now works for the Detroit Pistons, said the loss of an administrator or coach can have a definite impact on donations and capital campaigns.

“While talent reigns supreme within athletics, the personality of leadership has a stronger tie than most people realize to donors, alumni and especially former student-athletes,” said Collart.

The message from the university will be key in the next weeks several weeks, she said.

“Boosters will always question difficult decisions, especially when it results in the loss of a figurehead who had an enduring personality or winning record -- however if you can point to a long-standing process that holds a mission statement as gospel, boosters will come to accept the decision much more quickly and in most cases will remain loyal to a program.”
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.

Cracking down on counterfeit apparel

January, 8, 2012
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The retail market for licensed collegiate apparel is, quite simply, a behemoth of a business that brings in about $4.3 billion annually.

Seemingly everyone wants a piece of it, which is why so many people at so many major events hawk items of all shapes, types and sizes -- whether the items are legitimately made and licensed or counterfeit.

[+] EnlargeCounterfeit Shirts
Kristi Dosh/ESPN.comSome counterfeit shirts look more authentic than others.
Vendors selling counterfeit goods mixed right in with legitimate vendors at the SEC Championship game in December in Atlanta. They did it at the Rose Bowl, too. And they’ll do it again Monday night at the 2012 Allstate BCS National Championship Game.

Last year, more than 60,000 pieces of counterfeit merchandise valued at more than $1 million overall were seized by Collegiate Licensing Company. While CLC represents nearly 200 colleges, universities, bowl games, athletic conferences, the Heisman Trophy and the NCAA, it’s not the only licensing agency around; Learfield Sports, Licensing Resource Group, and Silver Star Merchandising represent collegiate properties in their licensing efforts as well.

At the 2011 SEC championship Game, CLC took possession of 1,012 pieces of unlicensed product with an estimated retail value of more than $15,000. That’s up from 2010, when 541 pieces of unlicensed produced were seized or voluntarily surrendered by vendors. More than twice that many products were seized last January at the Rose Bowl by CLC.

CLC officials said that on average, nearly 5,000 counterfeit items, from T-shirts to hats to bracelets, are seized outside the host stadium of the BCS title game each year.

Some of the items are obvious: In December in Atlanta, a roaming vendor on Mangum Street south of the Georgia Dome peddled T-shirts, gold letters emblazoned on purple reading: “BATON [expletive] ROUGE.” The back of the shirt warned: “IF YOU DON’T BLEED PURPLE AND GOLD TAKE YOUR [double expletive] HOME!”

Most people wouldn’t consider such a shirt an officially licensed product of Louisiana State University because of the vulgar language. But another vendor sold shirts proclaiming a “2011 SEC Championship Showdown” and featured the trademarked logos for LSU and Georgia. Few buyers would be able to determine the shirts were counterfeit.

CLC investigators team with local police at major events and seize such material, give citations to the vendors or arrest them. Companies like CLC conduct such enforcement activities because federal law requires trademark owners to “police” their mark. Trademark law is largely enforced through private lawsuits, although there are also criminal penalties for counterfeiting goods. Failure to police a mark by attempting to prevent infringing uses can result in a loss of protection for a trademark.

[+] EnlargeCounterfeit Apparel Bust
Kristi Dosh/ESPN.comAtlanta police and investigators from Collegiate Licensing Company walk a man accused of selling counterfeit apparel away from the SEC championship game in December.
The most clear-cut violations by vendors are those involving the use of trademarks that are registered at the state or federal level. Trademarks include more than just the university, conference or BCS logo. For example, University of Georgia lists the following trademarks: “Georgia,” “University of Georgia,” “Georgia Bulldogs,” “Bulldogs,” “Dawgs,” “UGA,” “University of Georgia Athletic Association,” “Between The Hedges,” “How Bout Them Dogs,” “Go You Silver Britches,” “Hairy Dawg,” the oval “G” mark and many others.

In addition to registered trademarks at the state or federal level, universities can also claim common law rights to marks or wording typically associated with the university.

In 2008, the Fifth Circuit Court of Appeals upheld a decision by a Louisiana federal district court against Smack Apparel for intentional trademark infringement based on its use of school colors in combination with other designs and words that made it apparent the references were designed to associate with a particular school. For example, one shirt featured the following: “Got Seven?” “We do! 7 Time National Champs.” The shirt included a depiction of the state of Ohio and a marker noting Columbus, Ohio, on the back. The court decided the shirt referred to the seven college football national titles claimed by Ohio State University.

The court ruled that the schools involved in the suit owned trademark rights in their color schemes and that combined with other indicia on the various shirts, such as the reference to Ohio State’s location in Columbus and national titles in the example above, trademark infringement had occurred, even without use of the school name or logo.

So, who are these vendors?

One of them cited in Atlanta was the man selling the shirts with the expletives. He said he planned to keep $8 of the $20 shirt cost, with $12 going to his boss. He expected to make $1,500 to $2,000 that day before he was stopped by CLC investigators and Atlanta police for vending without a permit.

The man said he was based out of Cleveland but traveled nearly every weekend for major sporting events. He said he worked for a company named Street Talk Tees, which is registered as a business in Ohio for “novelty tees and apparel.” The vendor said his company employs about 30 people who travel to events -- two others also worked the SEC game.

Requests for comment from Street Talk were not answered.

[+] EnlargeTag
CLCThese tags and holograms can be found on licensed collegiate apparel and items.
CLC says buyers have a few ways to determine the authenticity of their purchases:

•  Look for an “Officially Licensed Collegiate Products” hologram on the product or hangtag.

•  Consider taste of the product, as distasteful designs are not approved by trademark holders.

•  A torn or missing tag usually is evidence of a second-hand garment.

•  The name of the manufacturer will be on the product somewhere, either in the form of a hangtag, a neck label, or screen-printed directly.

•  All merchandise should have appropriate trademark designations next to a specific name or design.

Why be so conscientious when you buy collegiate merchandise? Each year, universities depend on millions of dollars in royalties to fund athletic programs and other university initiatives. For example, the University of Florida showed more than $6 million in licensing revenue on its audited financial statement for 2010-11, with just $40,000 of that going to CLC in marketing fees.

Ohio State budgeted for $3.5 million in licensing revenue for 2011-12 and projects $1.58 million of that will move from the athletic department to the university, to be used for academic programming and scholarships.

Reid in starting lineup for LSU

November, 25, 2011
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BATON ROUGE, La. -- Safety Eric Reid has been working with the first unit during warm-ups and was announced as a starter for LSU.

Earlier in the week, LSU coach Les Miles was unsure how healthy Reid would be for the Arkansas game after he injured his quadriceps last week against Ole Miss and sat out the final three quarters.
The price to see No. 1 LSU vs. No. 2 Alabama in person is growing alongside the hype for this weekend’s matchup.

The average ticket price of $402 prior to the season is starting to look like a bargain, as fans are now looking at an average of $508 -- a 28% increase.

The cost is even more impressive when compared with ticket prices to the SEC Championship Game, annually college football’s most financially successful conference championship game. A ticket to last year’s game between Auburn and South Carolina went for an average of $460 on StubHub. Games in 2009 and 2008, which pitted Alabama against Florida, went for an average price of $573 and $488.

Glenn Lehrman of StubHub said this week’s matchup has become the highest-demand ticket his company has seen for an Alabama home game. It’s on pace to be the highest-selling college football game of the season and is only trailing the LSU-Oregon season opener. The highest-priced ticket Thursday morning was selling for about $5,000.

The hotel industry in Tuscaloosa is benefitting as well, although surprisingly there were still rooms available as of last week. A search last Thursday on Hotels.com indicated 22 hotels in Tuscaloosa ranging from $40 to $200 for the night of the game, and a search on Travelocity.com showed 20 hotels ranging from $40 to $215. Didn’t buy then? You’re out of luck -- the closest you’ll get now is Birmingham, about 55 miles away.

Media members aren’t faring much better in terms of trying to cover the game. Alabama expects approximately 600 credentialed media members. For an average game, roughly 350 credentials are granted.

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