B1G revenue can't buy BCS titles
The Big Ten's rivalry with the SEC still exists, but it can't be quantified in crystal footballs.
When it comes to college football's grandest prize, the Big Ten, like the rest of college football, has fallen way behind. More than a decade has passed since Ohio State claimed the Big Ten's last national title; the SEC has claimed the past seven.
But when it comes to generating revenue, the Big Ten has no trouble holding its own with the SEC. The Big Ten generated more than $315 million in revenue in its latest reported tax return (fiscal year ending June 30, 2012). The league is expected to distribute $25.7 million to most of its members for fiscal year 2012-13. The SEC was fourth in revenue (approximately $270 million) for fiscal year 2011-12, according to Forbes, trailing the Big Ten, Pac-12 and ACC.
The SEC led the nation in average attendance during the 2012 season with 75,538 fans per game, followed by the Big Ten at 70,040 fans. No other league averaged more than 60,000 per game.
Whether its butts in seats or eyes on TV screens, the Big Ten and SEC are undoubtedly the two biggest and most popular brands in college football, which is what makes the Big Ten's backslide on the field so tough for its fans to digest. They see the revenue generated and the lack of championships.
The dollars, in this case, don't make sense.
But power brokers around the Big Ten say the equation is more complicated.
"It would be really hard to buy a national championship in college football," said Michigan athletic director Dave Brandon, who oversees one of the largest and richest athletic departments in the country. "There are a lot of other things that drive success in football. There's tradition and culture and momentum and luck and skill in recruiting and consistency.
"There's a whole bunch of things that don't necessarily always trace back to money."
Big Ten athletic directors aren't naive to one of the basic tenets of major college sports.
"There's a definite correlation between resources and the likelihood of success," Northwestern athletic director Jim Phillips said. "It certainly doesn't guarantee success, but if you under-resource it, you're setting yourself up to not meet or exceed the goals that you have."
I don't think the Big Ten is in a mode of saying, 'Cut back to the NCAA minimum number of sports and allocate money to the sports that are making money. And yet if you were running a private business, that's probably exactly what you would do.
--Purdue AD Morgan Burke
The Big Ten doesn't appear to be lagging in resources. Six Big Ten schools finished in the top 20 nationally in both athletic revenue and athletic expenses in 2012, according to data compiled by USA Today. All 11 Big Ten programs that reported revenue (Northwestern, as a private institution, doesn't have to) ranked in the top 35.
But NCAA dashboard data obtained by ESPN.com shows that the SEC's reliance on football revenue is greater than that of other major conferences. The 2012 dashboard data shows that the SEC, at the median, generates about 59 percent of its total athletic revenue from football. The Big Ten, Big 12, ACC and Pac-12, meanwhile, generate between 46-52 percent of their revenue from the gridiron.
Purdue athletic director Morgan Burke estimates the SEC's increased reliance on football revenue translates to $10-12 million per year at the median.
Those numbers can be significant when comparing the number of sponsored NCAA sports by league. According to athleticscholarship.net's John Infante, the Big Ten's median number of varsity sports (24) is higher than the ACC's (23), SEC's (20), Pac-12's (19.5) and Big 12's (18). No Big 12 or SEC school sponsors 24 or more sports, while six of the 12 Big Ten squads do.
"I don't think the Big Ten is in a mode of saying, 'Cut back to the NCAA minimum number of sports and allocate money to the sports that are making money,'" Burke said. "And yet if you were running a private business, that's probably exactly what you would do."
Broad-based athletic programs are an important part of the Big Ten's identity, but is the league's philosophy hindering it from winning championships in football? Brandon said it might for some programs, but not at Michigan.
Real estate magnate and Miami Dolphins owner Stephen Ross last month made a $200 million donation to Michigan, a portion of which will go to athletics, mostly to fund facilities for nonrevenue sports like field hockey and softball.
Football isn't getting shorted, Brandon said, as a $10 million upgrade to Schembechler Hall is underway and investments have been made in academic support, athletic training and nutrition.
"You've got to think of football in most of these programs as kind of the golden goose," Brandon said. "You can't ever put yourself in a position where you're allowing your cash-cow program to suffer."
At a time when some nonrevenue sports are being cut at major programs, Michigan added men's and women's lacrosse in 2011. Ohio State also has made larger investments in lacrosse.
"We don't say, 'Because we have all these sports, we can't do this in football or basketball,'" Ohio State athletic director Gene Smith said. "Those are your two marquee revenue-generating sports, so from a business point of view, we make the investments so that all those other sports can survive.
"I would have to defer to my colleagues, but I'd really be surprised if anybody in our league doesn't operate the same way that I operate, and largely because we can."
Big Ten athletic directors like Burke and Phillips, who sponsor fewer sports, don't feel restrained by the league's approach. Every Big Ten program either has made or soon will make upgrades to its football facilities (stadium, offices, weight room, practice fields).
Assistant coach salaries are up around most of the Big Ten, although there are fewer top-earning coordinators than in conferences like the SEC and ACC.
"I would be very reluctant to say the broad-basedness handicaps us in football," league commissioner Jim Delany said. "I think we spend enough to be successful. Our coaches are good. We have 85 scholarships. Spending more money in football doesn't necessarily mean it's better."
Burke has never met Billy Beane, but from afar he has admired the Oakland Athletics general manager and his Moneyball approach in big league baseball. Purdue isn't unlike the A's, boasting the fewest number of varsity sports (18) in the Big Ten and trying to compete with bigger and richer departments both regionally and nationally.
Purdue is one of just seven Division I athletic departments that operated in the black and received no subsidies in 2012. (Big Ten members Nebraska, Ohio State and Penn State also are in the group.) Burke takes pride in that but admits it's hard to be financially responsible in a realm where everyone is trying to get ahead.
"We're afraid somebody's going to come in and say, 'I was at XYZ school and they've got this green thing, or I was at ABC school and they've got this red thing,'" Burke said. "Maybe that's important, maybe it's not, but we all get caught up in that."
Football staffs are swelling around the country, especially at major-conference programs, as positions are piling up, especially ones related to recruiting. Although head coaches are still limited to nine assistants, there are no restrictions for off-field staff, who fall under new-age labels like player personnel and player development.
Alabama's staff size has drawn plenty of attention -- the football program has 24 noncoaching personnel, according to The Tuscaloosa News -- especially after the team's run of three national titles in four years. Although Big Ten staffs are bigger than they were five years ago, few approach the size of Nick Saban's.
Is it fair to attribute Alabama's success to all the bodies in its football office?
"No, I equate that to Nick, his nine assistants, the Alabama brand, the geography," Smith said. "I haven't looked at their roster, but my guess is the majority of the roster is from within a 150-mile radius. If you go back in the Big Ten, back to the glory days, that's what the Big Ten was: Ohio high school football, Michigan football, Pennsylvania football, Illinois football was the cream of the crop. We drove to recruit. The issue of competitiveness is about geography; it's about population. It's the old story. They're getting better players at the end of the day.
"A lot of those guys on Alabama's staff, I bet they're not recruiting; they're watching film."
The questions about whether the Big Ten is undermanned not only on the field but in the office will linger until the league starts challenging the SEC between the lines. Staff size has been debated regionally and nationally, but as Delany noted, "There's a lot of discussion; I don't know if there's always a lot of agreement."
If Purdue's football program has a true need, Burke said he's willing to fund it. But adding staff simply to review video, along with supervisory positions, creates a "bureaucracy."
"The reality is probably nine out of every 10 kids [on video] can't play at this level," Burke said. "But because everybody else is doing it, I better check because I might find a diamond in the rough. Well, if that diamond in the rough costs you five or six positions, and you're sitting there all day looking at video, does that necessarily mean your football team's going to be better? I don't know."
You'll have a hard time convincing Big Ten athletic directors that spending more on football is the answer to catching the SEC. To Ohio State's Smith, the key is another S-word: strategy.
Smith and Buckeyes coach Urban Meyer, who coached in the SEC at Florida from 2005-10, have made strategic tweaks to Ohio State's football spending, mostly in relation to recruiting. Smith boosted the recruiting budget so Meyer and his staff could spend more time in Texas and Georgia, which have produced recent ESPN 300 Buckeyes recruits like Dontre Wilson, Vonn Bell and 2014 prospect Demetrius Knox.
"Ohio State is making as big of an investment in its football program as the SEC is, relative to what we need in our geography," Smith said. "Urban doesn't have an issue. If you need to get a private plane to fly somewhere to see a recruit, not an issue."
Meyer also works closely with an event management staff on how to stage recruiting weekends.
"It's all strategy," Smith said. "How do we want to differentiate ourselves? It's what do we give Urban to help him strategically beat the Alabamas on a recruit, the Michigans on a recruit, Texas, whoever else."
Big Ten coaches discussed recruiting during the offseason, Smith said, and athletic directors have shared ideas on how to drive the Big Ten brand.
Ohio State is making as big of an investment in its football program as the SEC is, relative to what we need in our geography. Urban doesn't have an issue. If you need to get a private plane to fly somewhere to see a recruit, not an issue.
--Ohio State AD Gene Smith
"If you don't like the word branding, come up with a different word, but you better be out there and be visible," said Brandon, who has modernized Michigan through several marketing initiatives since his arrival. "If you're not making the connection, you're probably going to get left behind."
Northwestern's Big Ten revenue share doesn't go straight to athletics but to the university, which appropriates the money as it sees fit. After falling behind in facilities and losing top assistants to other programs, Northwestern last fall announced plans to build a new on-campus football headquarters, estimated at $220 million.
The school also has made a greater commitment to coach Pat Fitzgerald, who received a 10-year contract extension in 2011, and in Fitzgerald's assistants, none of whom has left in three years.
"The investment," Phillips said, "always starts at the top."
Penn State has endured financial problems in the wake of the Jerry Sandusky scandal, including a decline in football attendance. Athletic director Dave Joyner said that as a self-supporting department, football spending hinges on football revenue. Still, in June, the school reworked the contract of Bill O'Brien, the 2012 Big Ten coach of the year.
"Once you get to a certain point and you have access to good facilities and staffs, once you hit that threshold and get to a really adequate place, it's how you implement your programs," Joyner said. "It's how you implement your people.
"It really becomes the qualitative nature of how you use the money rather than the quantitative nature."
Delany steers clear of telling Big Ten athletic directors how to spend their money, but he'll likely keep making it for them. College football never has been more popular, a lucrative playoff is coming, and leagues are signing historic media-rights deals.
The Big Ten, already buoyed by the success of the Big Ten Network, is last in line for a TV deal and figures to get the biggest one. But league leaders are wary that one day, revenues will stop surging.
"It keeps me up every night when I think about those things," Phillips said.
Burke spent 18 years in the steel industry before Purdue and saw a company go from 25,000 employees to seven. He notes that cable could be unbundled if certain lawmakers get their way and that college football ticket prices are approaching a ceiling, a belief supported by a decline in attendance in four of the five major conferences last year.
"It's almost like we have the equivalent of the housing bubble in athletics," Burke said. "We're trying to spend money as soon as we get it in. You could end up with a situation, if people aren't adequately building reserves, that they have to undo some of what they've done. That's painful."
Smith also is concerned about the bubble but thinks it will hit smaller Big Ten schools before ones like Ohio State, which had a strong renewal rate among season-ticket holders despite a 13 percent price hike. Big Ten TV revenue made up only about 18 percent of Michigan's athletic operating budget last year.
Although Delany is optimistic about the future, he acknowledges, "Nothing goes up in a straight line, and I don't think anybody should do a business plan on that basis."
It's also not a good plan to throw money at football without a prudent plan, even as the pressure mounts to catch the SEC and secure the crystal football.
"Generally speaking, the more resources you have, the better off you are, but it's not a one-to-one relationship," Delany said. "Sometimes people waste their money; sometimes they spend it wisely.
"Having resources is a tremendous advantage, but it's not a guarantee."
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