Let's Win One For The Coffers

This could only be opening day at Notre Dame Stadium. Across the eight-acre parking lot, Irish flags fill a South Bend (Ind.) sky gray with barbecue smoke. A rock band jams out tunes for dancing students dressed in green and gold. Old-timers relax beneath canopies pitched next to lime-green buses with names like "Gipper II." But all the hoopla doesn't impress Coach Lou Holtz. "We'd play," he says, "whether or not we were on television or whether there was anybody in the stands."

Not to worry. Notre Dame has sold out 95 consecutive home games over the past 25 years. More important, the Sept. 7 home opener marked the school's first game televised under a five-year, $38 million-plus contract with NBC.

PAYBACK. With legions of followers, most attracted by the school's winning tradition and Roman Catholic affiliation, the Fighting Irish command an unparalleled national audience for a college team. And increasingly, the university is trying to cash in on this popularity.

Call it Notre Dame Inc. Since Richard A. Rosenthal became athletic director in 1987, the school, like many other colleges, has started looking at its sports programs with more of an eye for the bottom line. Besides crafting the NBC deal, Rosenthal intends to increase revenue by promoting sports such as baseball and expanding Notre Dame's lucrative athletics merchandising program, which earns the sports program over $560,000 annually by selling shirts and jackets. Rosenthal, a former South Bend banker who set a Notre Dame record for most fouls in the 1952 basketball season, has also looked at lining up a pay-per-view TV contract. ESPN college football analyst Beano Cook bets Notre Dame will ink a pay-per-view deal. Says Cook: "They could gross $100 million" by the year 2010.

Don't think Notre Dame would pour all that loot into athletics. Despite its newfound wealth, the school's $14 million athletic budget just kept pace with inflation this year. And some proceeds from the NBC deal will be used to boost scholarships for needy students.

Lofty purposes, for sure. But Notre Dame has taken a lot of heat for what many consider a low-down deal with NBC. In early 1990, the College Football Assn. inked a five-year, $350 million package with ABC and ESPN. Notre Dame officials worried that ABC, as the exclusive CFA broadcaster, would emphasize regional telecasts. That would limit Notre Dame's exposure outside the Midwest. So it jumped ship to NBC and became the only major university to have its own network-TV contract.

Other colleges were outraged. "It was a shock to everyone," says University of Georgia Athletic Director Vince Dooley. Many felt that Notre Dame, which helped negotiate the ABC and ESPN contract, had betrayed its fellow CFA members. University of Kansas Athletic Director Robert Frederick was so infuriated that he canceled his university's basketball series with Notre Dame in 1992 and 1993. But more than a betrayal of trust was at stake. Without Notre Dame, the CFA was forced to renegotiate its TV package, losing $30 million in the process, the association says.

Even the critics think Notre Dame and NBC have a winner, though. Notre Dame gets every home game broadcast nationally, and its teams have played in four of the five highest-rated regular-season games ever televised, including numero uno, a 1968 battle against the University of Southern California. Last year, Notre Dame was in all five of the highest-rated regular-season games.

'THANK GOD.' What makes the Irish such a draw? Since 1936, the team has won eight national championships, with seven Heisman Trophy winners. Legends, like Coach Knute Rockne, help. His teams lost only 12 games in 13 seasons from 1918 to 1930. Tough schedules help, too. This year, NBC will broadcast games against such top-ranked teams as USC, Michigan State, and Tennessee.

Notre Dame has long known the earning power of the gridiron. Football profits generated during Rockne's tenure, for instance, helped build classrooms and dormitories. Last year, BUSINESS WEEK estimates, football netted Notre Dame at least $11 million. And with the NBC deal, the take can only get bigger.

"Thank God for NBC," says tight end Irv Smith, who dragged several Indiana players 25 yards while heading for a dramatic score on opening day. "My parents in New Jersey wouldn't have seen that play otherwise." That hallelujah is no doubt echoing throughout Notre Dame's hallowed halls.