By Mike Huguenin
Special to Debt.org
The end of a highly competitive and parity-filled college basketball season comes Monday with the NCAA tournament’s championship game. The Final Four in Atlanta is notable not only because just one of the four teams still playing was expected to be there but also because half the teams with a chance at a title are representing conferences they are leaving.
The Big East Conference can stage a members-only title game Monday night because Louisville and Syracuse are on opposite sides of the bracket, but the league cannot use this magical moment to keep itself intact. The Big East –for years the pre-eminent basketball conference in the country – is coming apart because the financial opportunities from football are too alluring to ignore.
Syracuse and Louisville are two of four Big East-affiliated schools that signed up to move to the Atlantic Coast Conference. The Orange joins Pittsburgh and Notre Dame (which will remain an independent in football) in making that jump this summer, while Louisville joins next summer. The moves were driven by football money: The revenue that major football conferences now command from television networks and from the sport’s bowl-based championship system far exceed what a non-football league can dole out in TV revenue and what the NCAA hands out for NCAA Tournament success – two historically strong revenue streams for top-level athletic programs.
The moves were among the last dominoes to fall in the Big East. Miami and Virginia Tech left the Big East for the ACC in 2004. Boston College followed suit in 2005. West Virginia left for the Big 12 in the summer of 2012.
Leaving with Louisville in 2014 is Rutgers, which will join the Big Ten. Maryland, from the ACC, will jump to the Big Ten with Rutgers.
Football Money Drives Conference Chaos
The large-scale exodus triggered a decision that was expected: chaos. The seven remaining private schools in the Big East– DePaul, Georgetown, Marquette, Providence, Seton Hall, St. John’s and Villanova – either don’t play football at all or don’t play it at the highest level. That’s a primary reason they are breaking away from the other current league members (Cincinnati, Connecticut and USF) to form a basketball-only conference that will keep the Big East name (and thanks to negotiations, the vast majority of the basketball money).
The trio of schools left behind will be joined by a handful of other schools and be called the American Athletic Conference; that name will go into effect this fall.
All this change comes because of so much football money and because some athletic departments, despite the millions of dollars that change hands, struggle to make ends meet.
The six major conferences (ACC, Big East, Big Ten, Big 12, Pacific-12 and Southeastern) have fattened their wallets with Bowl Championship Series money since 1998. The league champions in each of the six leagues have been guaranteed spots in a BCS bowl since the process began and the money handed out has increased each season.
This past season, the league champions from each of the conferences received about $23.6 million for their BCS spot. The Pac-12 and the SEC each had two teams in the BCS, and the second teams from each league received about $6.2 million.
This fall will mark the final season of the BCS, but to conferences that’s a good thing. A playoff system begins in 2014, and there will be even more money at stake.
Final Four Money Dwarfed by Football Dollars
Still, for major conferences, TV contracts supply an overwhelming share of their revenues. And 85 to 90 percent of that money comes from football.
When Maryland announced its move to the Big Ten, reports surfaced that the school expects to receive at least $7 million more per year in TV revenue in the Big Ten than it was expected to generate in the ACC (the school is projecting $24 million annually). Similarly, Louisville and Syracuse expect the ACC will generate about $13 million more a year than each now is receiving from the Big East (and about $15 million more than the remaining football members will make from a new TV deal).
In fact, the money that college football now generates makes the revenue from the NCAA Tournament seem to be a pittance, which is why, even if the Big East sent two teams to the Final Four every year, it still could not make enough money to keep its football-playing members satisfied.
NCAA Financial Math
Here’s how the financial math works:
The NCAA, which runs the basketball tournament but has nothing to do with a major-college football playoff, doles out money every year to participating conferences, which in turn distributes the money to member schools. The billions in tournament money comes from primary TV partner CBS.
The NCAA has a plan whereby a conference’s tourney results are averaged over a six-year period. Each game (except, interestingly, the national championship game) earns a conference one “unit.” A unit is worth $245,514 this season, and the number typically increases a bit each year.
Remember, though, that the money goes to the conference, not the particular school that played in the game, and it generally is spread evenly among the conference’s members (and the conference office may take a cut, too) via revenue sharing.
This math works out well for many schools that give the NCAA Tournament much of its allure. Fans watch in large numbers when teams such as Florida Gulf Coast, from the Atlantic Sun Conference, knock off blue-blood programs. And while the public enjoys the entertainment value of a No. 15 seed shocking a No. 2 seed, athletic directors in leagues such as the A-Sun also enjoy the unexpected financial boost. FGCU, for instance, earned the A-Sun almost $500,000 for its Sweet 16 run – a windfall for a small conference.
This season, a run to the title game by any school will earn its conference $1,227,560. The Big East, then, could benefit to the tune of $2,455,140 if both Louisville and Syracuse make the final – and that’s not including what the other six conference members who made this season’s field earned.
Reports show that the Big East last year received about $27 million in basketball tournament revenue, more than any other conference. The total then was parceled out to the 16 basketball-playing schools in the league, and the cut for each came to about $1.68 million.
It sounds like lot of money. It’s not. Louisville and Syracuse expect to receive about $17 million per year from the ACC’s new football TV contract.
Even Michigan, Wichita State Impacted
The football-driven game of conference musical chairs actually impacts the entire Final Four. Michigan is from the Big Ten, and the future additions of Maryland and Rutgers is going to affect the Wolverines’ annual financial take from the league.
And even the Missouri Valley Conference, which is the home of Final Four dark-horse Wichita State, is going to take a hit. Creighton is leaving the MVC for the “new” Big East this fall, and though neither Creighton nor Wichita State plays football, the future financial success of both has been affected by the sport.
Mike Huguenin is former college editor at Yahoo! Sports and Rivals.com. He is also a Heisman Trophy voter.
Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].