Why TV Riches Aren’t Enough to Keep College Football Alive Anymore
Programs and conferences have sacrificed ticket sales for media money. What happens when that dries up?
The business model of college football, long a financial boon to universities, is breaking down. A weeklong look at the pressures of rising costs, falling revenue and what, if anything, universities can do about it. Read the rest of the series here.
College football is sloshing around in television money. You can see it in inflated coaching salaries and practice facilities that feature spas, juice bars, and movie theaters. Clemson’s football players are getting a mini-golf course and an indoor slide.
One athletic director, in little Las Cruces, N.M., is trying to rebalance the scales. For the next couple of years, Mario Moccia plans to do all he can to keep the New Mexico State University Aggies off TV. Think of it like an NFL broadcast blackout.
“I’m choosing not to do damage to myself,” Moccia said. He suspects more people will come to the games if they can’t watch from home and the school will make up any lost revenue at the gate. Only 5 percent of the Aggies' $29 million annual athletic budget comes from TV, and Moccia figures it’s worth experimenting.
It's hard to overstate how unusual Moccia is. The pursuit of TV money has led programs and conferences to make all kinds of concessions, and while that might make short-term sense— media money is guaranteed, ticket sales are not—it threatens to irritate and alienate the fan base over the long term. In the Pac-12 Conference, for example, broadcasters adjust the kickoff times for schools six to 12 days in advance, often to the frustration of ticket-holders. The Mid-American Conference, a league of schools on par with NMSU, agreed in its deal with ESPN to play football on Tuesdays and Wednesdays, conscious that the games would draw smaller crowds.
The money is persuasive. Eager to hold on to one of the last reliable TV audiences, networks have paid ever-increasing sums for live sports of all kinds. The Big Ten Conference, for example, is about to start a new, six-year TV contract worth $440 million a year, nearly three times what the group was able to negotiate in 2006. Its 14 schools will also share revenue from the Big Ten Network and other smaller media deals. The annual payout to schools such as Michigan and Ohio State, about $32.4 million last year, will increase significantly.
The post-season pot got bigger for everyone in 2014, when ESPN agreed to pay $7.3 billion over 12 years for the rights to the newly established College Football Playoff. Each of the power conferences—Big Ten, Southeastern Conference, Big 12, Pac-12 and the Atlantic Coast Conference—now get $55 million, double their payout from the previous Bowl Championship Series. The average payout for the other conferences went from $3.3 million each to $16.7 million. The independent schools also saw a bump.
When it comes to regular-season media deals, though, smaller conferences may have seen revenue peak. Around the same time the Big Ten was negotiating with Fox and ESPN, Conference USA—now home to UTEP, Marshall and Southern Miss—was shopping its rights. The league earned nearly $10 million from TV in 2015-16; this year, it will receive $2.8 million from four networks, according to the Virginian-Pilot.
In that environment, Moccia decided NMSU would experiment. He cut the number of Aggies home football games on local TV from five to three. Attendance didn’t spike, but a 2-7 record and a cold snap may have discouraged fans. He plans to broadcast six of 17 men’s home basketball games this season, down from 14 last year.
In any event, Moccia says he’ll need to evaluate trends over a few years. He recently met with 100 NMSU alums in Phoenix who’ve followed the team on Fox Sports Arizona, one of the channels Moccia’s trying to limit. There is also the delicate relationship with Learfield Sports, a middleman in the market for media rights, which pays the school $1,000,000 a year. "We have to provide them content," Moccia said. "We can’t really say we don’t want any of our games on TV."
While NMSU is one of the smallest programs in the top-tier of college football—no school at their level pays its coach less—bigger programs and conferences may soon face their own reckoning. Most of the current slate of TV deals expire in the next seven to nine years. When renegotiations begin, how much media money will be available?
Cable companies are not thriving. At the same time, tech behemoths such as Facebook, Twitter, and Amazon are showing interest in live sports programming. Leagues have started experimenting with 3D and virtual reality rights; cell carriers like Verizon may also turn into buyers.
Many administrators and conference commissioners are confident that the pool of money won’t shrink, but others aren’t so sure. "We are cognizant of the tenuous nature of our revenues," Kansas State athletic director John Currie said. "Just as all of us in higher education, particularly state intuitions, will have to make an incredible series of difficult decisions and create victim classes across their campuses in the next five to 10 years, we’ve got to be willing to make those same decisions in our athletic departments."