Tuesday, December 11, 2012
Big earnings for power conferences
By Brett McMurphy ESPN
NEW YORK -- The financial gap between college football's haves and have-nots is about to grow even larger.
During the 12-year contract for college football's new playoff format, the nation's five power conferences (SEC, Big Ten, Big 12, Pac-12 and ACC) will earn an average of nearly $75 million more per year than the smaller leagues known as the "group of five."
From 2014 to 2025, the SEC, Big Ten, Big 12, Pac-12 and ACC will earn an average of at least $91 million annually, sources told ESPN Tuesday. By comparison, the average for the group of five -- Big East, Mountain West, Mid-American, Conference USA and Sun Belt -- during that 12-year period will be about $17.25 million annually.
The BCS recently signed a 12-year contract with ESPN. The deal averages $470 million annually, sources said. Of that amount, about $125 million is expected to go toward expenses, including an academic reward component, game participation, team expenses, allotment to Football Championship Subdivision conferences and other items.
It leaves an average of $345 million annually, which the commissioners have decided to split in two ways: 75 percent ($258.75 million) divided equally among the SEC, Big Ten, Big 12, Pac-12 and ACC, and the remaining 25 percent ($86.25 million) divided among the Big East, MWC, MAC, C-USA and Sun Belt.
That alone gives the SEC, Big Ten, Big 12, Pac-12 and ACC an average of $51.75 million annually. The SEC, Big 12, Pac-12 and Big Ten also each will receive an additional $40 million annually for their contract bowl deals with ESPN: Allstate Sugar (SEC, Big 12) and Rose Bowl Game presented by Vizio (Pac-12, Big 12).
The ACC also will earn at least an additional $27.5 million annually for its ESPN contract bowl deal with the Orange. The ACC's opponent will be either Notre Dame or a team from the SEC and Big Ten. If the SEC or Big Ten places a team in the Orange Bowl, that league would earn another $27.5 million, increasing the SEC or Big Ten's playoff revenue share to $118 million.
Notre Dame's exact compensation for playing in the Orange Bowl during the ESPN deal is not known, but sources told ESPN it would be "substantially less" than the $27.5 million payout to an ACC, SEC or Big Ten team.
In the new playoff format, Notre Dame is expected to receive an average of about $4 million during the 12-year contract, sources said. If the Irish play in the national semifinals or one of the six major bowls, Notre Dame would receive a great deal more than the $4 million.
Only three of those six major, or host, bowls that will hold the semifinals have been determined: Rose, Sugar and Orange. The other three are expected to be Fiesta, Cotton and Chick-fil-A, sources told ESPN.
The SEC, at least in 2014, will be rewarded financially for its past on-field success, having won six consecutive BCS titles. Sources said the SEC should receive more playoff revenue in 2014 than any other league.
In the current BCS system, the SEC, Big 12, Big Ten, Pac-12, ACC and Big East each received an automatic BCS bowl berth, earning each league $23.6 million. If a league received a second BCS bowl berth, it earned an additional $6.2 million.
So while the SEC, Big 12, Big Ten, Pac-12 and ACC will increase from $23.6 million to an average of $91 million during the 12-year period, the Big East will see a decline in revenues in the new format. That's because automatic-qualifying designations will end in 2014. The Presidential Oversight Committee and the commissioners determined the Big East was no longer a power conference because of the number of teams that have left the league.
So the Big East will be included in the "group of five." Those conferences must determine how to distribute their $86.25 million amongst themselves.
In the past, those leagues, formally known as the non-automatic qualifying conferences, gave each league the same base amount and then rewarded the conferences based on their cumulative BCS ranking as a conference. Exactly how that will be done in the new system is still being negotiated among the conferences, sources said.
Although the Big East's average annual revenue from the new playoff will be reduced by about $5 million annually, the remaining smaller conferences -- C-USA, Sun Belt, MWC and MAC -- will see an increase of at least five times what they received in the BCS system.
Also included in the new $470 million of annual revenue is $37.5 million for schools that meet the NCAA's minimum academic requirement, or Academic Progress Rate scores. Each conference will receive $300,000 per school to be distributed to each league member that meets the NCAA's minimum APR.
Nebraska president Harvey Perlman said last month in Denver that only the schools in each league that meet the APR requirements will receive that money.
Using Perlman's example, the Big Ten (with 14 members) will have $4.2 million to distribute to its member schools that meet the APR numbers. If all 14 meet the APR standard, they each would receive $300,000 each. However, if only 12 of 14 met the standard, those dozen schools would receive $350,000 and the two schools that didn't meet the standard would not receive any of the academic money.
All of the financial figures are annual average projections, based on gross value, and could fluctuate each year depending on the annual revenue.