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The Business of Sports

College Football: Kickoff or Kick in the Butt?

College football players are used to getting hit. But for players and fans alike, 2011 has so far been the mother of all pile drivers.

College football programs and their loyal fans have suffered mightily this year, from a devastating tornado in Tuscaloosa, Ala., to damage and delays from Hurricane Irene and on to no-less-devastating scandals (Ohio State and Miami) and criminal mischief (the sad fate of Auburn’s “Toomer’s Corner” oak trees, poisoned by a psychotic ‘Bama fan).

Displacement has also been a common theme. Thanks to multiple conference realignments in the off-season, fans will need GPS systems to track down such teams as Colorado and Utah, which just joined the Pac-12; Nebraska, which left the Big 12 for the Big Ten; Boise State, now taking its blue act to the Mountain West; and BYU, still in Provo but now an independent.

In the latest realignment kerfuffle, Texas A&M University on Wednesday announced that it has formally notified the Big 12 that it will submit an application to join another athletic conference. If the application is accepted, A&M will end its membership in the Big 12, effective June 30, 2012. But hang on to your ten-gallon hat: According to multiple sources, the SEC, A&M’s likely target, said that it had not received an application from Texas A&M to join the league and would have no further comment.

Booming Ticket Prices and TV Deals

Despite such tackles for a loss, college football is fitter and hotter than ever. TV-rights deals such as the Pac-12’s landmark $2.7 billion broadcast agreement and the University of Texas’s joint venture with ESPN (called the Longhorn Network if you’re from Texas or ESPN Moo if you hail from say, Arkansas or Oklahoma), represent millions of dollars annually in newfound revenue.

Single-game ticket prices for college football’s hottest matchups have surged 30 percent in three years, to an average of $65, according to the Portland Oregonian. The “brisk rise, far outpacing inflation, illustrates the high demand for games despite the lingering effects of the recession,” the paper reports. The “highest-priced ticket still is Oklahoma at Oklahoma State, at $125, while a ticket to any South Florida or Louisville game can be had for 10 bucks.”

Notre Dame, among other schools, is adopting a pro sports variable-pricing tactic for marquee games. The Fighting Irish are now asking “$70 for the South Floridas of its schedule and $80 for the USCs.” reports the newspaper. And Stanford, behind Heisman Trophy favorite Andrew Luck, has similarly raised its big game prices (yes, even for Big Game) from $45 to $75 since 2008. New swaths of premium seating in college football stadiums are also creating fresh revenue streams for schools.

Between TV and tickets, collegiate athletic budgets on the whole have continued to climb. Of 52 schools that recently provided annual budget information to SportsBusiness Journal, 30 have increased spending by 10 percent or more in the last three years—and 17 have increased their athletic budgets by 15 percent or more.

College Football TV Ad Slots Selling Out

As the 2011 college football season kicks off this week, student athletes have reached yet another milestone when benchmarked against the pros.

College football broadcasters, according to Broadcasting & Cable, have been “confidently watching the advertising dollars mount on the scoreboard.” Nielsen data reveal that regular-season ad spending on college football was $508 million in 2010, up 6 percent from $477 million in 2009, and “this year could be even bigger.”

When the NFL season was in doubt during advertising’s spring upfront selling season, college football was a hot commodity. SEC broadcasts by CBS (CBS) sold out “almost immediately,” as did coverage by NBC of Notre Dame. ESPN, home of college football’s popular “Game Day,” is also reportedly outpacing last year, and the college football expansion by Fox Sports (NWS) to FX created new ad inventory for that cable network. The planned 14 FX games, according to a Fox executive, are “just about sold out in the third quarter and nearly 90 percent sold out in the fourth quarter, with some units held back until ratings start coming in.”

IMG Delivers for UPS

In a deal brokered by IMG College, just a week after that agency and Leadfield did a sponsorship deal with MillerCoors for 23 schools, UPS (UPS) has reached an agreement with nearly 70 schools and multiple conferences that gives it “promotional rights from coast to coast,” according to a story broken by SportsBusiness Journal. The new deal, valued by sources at from $20 million to $25 million annually, comprises many of the country’s top college football programs repped by IMG College, including Florida, Georgia, Michigan, Ohio State, Texas, and UCLA, and it showcases the growing role of college sports as a viable national platform.

Nationwide through the college football season, UPS will have access to TV and radio advertising in venue signage, game programs, Web advertising, tickets, and hospitality. The program also allows UPS to effectively become the official package-delivery, logistics, and retail-business-services provider in all forms of sponsor recognition.

The sponsorship “represents one of the first major wins for IMG College’s new national sales group, which has been touting the college space as a viable alternative to other national properties.” Says IMG College President Ben Sutton: “It’s hard to understate how important this is for IMG. This agreement—and similar ones to follow—really validates the merger because it enabled IMG College to create a national marketing sale outside network TV.”

IMG Sports & Entertainment President George Pyne emphasized that he thinks virtually all colleges are undervalued from a monetary perspective and added that the IMG program enables “blue chip brands like UPS to reach the largest and most affluent fan base in sports.

“It’s a big deal because we have made a significant investment in college sports, and the idea behind this was to go to corporations and offer them a product in 49 of the top 50 markets in the Americas with one buy. That’s what’s unique, that’s what’s different and, frankly, transformational … for the colleges, it’s great. For the advertisers, it’s a very efficient, one-time buy at a value that can’t be matched anywhere in sports.”

To cap a successful fortnight, IMG College followed its announcement about the UPS deal by revealing that its innovative Ticket Solutions program is now in use at the University of Tennessee. Since July 1, the school has realized more than $1 million in season ticket sales; the milestone reached this week is the equivalent of more than 2,000 season tickets to Vols college football. Via Ticket Solutions, the UT ticket department has also sold more than 5,000 group football tickets, as well as men’s and women’s basketball season tickets.

Merchandising and High School Corporate Sponsorships

Last week, Collegiate Licensing announced its annual list of top-selling collegiate merchandise and manufacturers, and the University of Texas tops the list for the sixth consecutive year. Florida and Alabama came in No. 2 and No. 3, respectively. Auburn University moved from No. 15 to No. 4 this year, in part because it won the BCS National Championship in January; merchandise royalties surged to $5.3 million last season, from $2.5 million the previous year. The University of Michigan rounded out the Top 5.

The rankings represent royalties reported July 1, 2010 through June 30 on all collegiate merchandise sold on behalf of CLC-represented institutions. The Longhorns generated slightly more than $10.6 million in royalties from merchandise sold over the 2010-2011 fiscal year, according to the Austin American-Statesman.

Just as the college football business increasingly looks like that of the NFL, the line between college sports and high school continues to blur as well. Researchers at Ball State University found that of 360 high schools surveyed, 57 percent are pursuing corporate sponsors to fund athletics. Of those, 3.7 percent have offered logos on uniforms as a benefit to potential sponsors. Program ads and stadium signage were the most common benefits reported.

The recent economic downturns have put public school systems in a bind when it comes to funding athletics. High schools have teamed up with local companies for years, but the economy has caused them to be more creative. Consider these high school naming-rights examples:

The Tyler, Tex., school district in 2004 renamed its 56-year-old Rose Stadium “Trinity Mother Frances Rose” after a local health-care company gave them $1.92 million to do so. In 2005, the Sumner, Wash., school district changed the name of Sumner Stadium to Sunset Chevy Stadium in a $500,000, 14-year deal with a local car dealer.

At the end of the day, however, the golden spud stops here: The Idaho Potato Commission will spend nearly $2.5 million over six years to title-sponsor the annual college bowl game in Boise. The Commission becomes the bowl’s fifth naming-rights partner in the last decade, following uDrove, Roady’s Truck Stops, MPC Computers, and

Just call it football’s staple food.

Rick Horrow is a leading expert in the business of sports. As chief executive officer of Horrow Sports Ventures, he has been the architect of 103 deals worth more than $13 billion in sports and urban infrastructure projects. He is also the sports business analyst for CNN, Fox Sports, and the Fox Business Channel. Karla Swatek is vice-president of Horrow Sports Ventures and co-author of Beyond the Box Score: An Insider's Guide to the $750 Billion Business of Sports (2010). Horrow is also the host of Sportfolio, a new program on Bloomberg TV that airs Wednesday nights at 9 pm ET.

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