Million dollars, baby: Cost of Big Ten opponents keeps rising
JUN 04, 2014 10:53a ET
David Sayler recalls a decade ago when the thought of commanding $1 million for a nonconference football game contract seemed a preposterous pipe dream. But Sayler, the Miami (Ohio) athletic director, understands how quickly times have changed as the multimillion-dollar industry of college football impacts every facet of the sport.
Sayler, in fact, won't even field calls to schedule a football game at a major conference program these days unless the payout starts at seven figures. Given inflation rates, increased ticket and concession prices and television revenue for big-time college football, athletic directors agree the general direction of guaranteed payouts is rising.
Mid-major programs, in particular, are in position to benefit from conferences such as the Big Ten like never before.
"We go out to 2020, we're getting $1.5 million from somebody," Sayler said. "There's going to be growth built in each year. The numbers keep going up. As you've seen from the public with the revenues coming in from the Big Ten Network and all the seats those schools have, I don't think $1 million is a real staggering number at all when you really put it in context."
This season, Miami (Ohio) will take home $1.1 million to play at Michigan, Florida Atlantic will get $1 million to play at Nebraska and Ball State $900,000 for playing at Iowa. Miami (Ohio) is set to make $1 million in 2015 at Wisconsin, Sayler said, and fellow Mid-American Conference school Ball State will collect a program-record $1.2 million for playing at Texas A&M. Wisconsin also will pay $1.2 million to host Florida Atlantic in 2017.
"As you get four, five, six years out, it's actually higher than that now," Ball State athletic director Bill Scholl said. "There certainly are some teams that are paying more than that. I think every year it'll climb a little bit. . . . But I think we all use that million-dollar mark right now as kind of the benchmark for the discussions, absolutely."
Athletic directors say the fair market value for a guarantee game varies in the Big Ten because schools have different parameters when it comes to payouts based on the opponent, the circumstances and seating capacity, among others. Not every mid-major school, meanwhile, requires a $1 million guarantee for a one-time game just yet.
But where, exactly, do we stand in 2014?
FOXSportsWisconsin.com obtained the contracts for 38 of 39 Big Ten nonconference home football games for the 2014 season via open records requests. (School officials from both Penn State and Temple declined to provide a contract for their game because the documents are not public record under Pennsylvania state law.) Of the 14 Big Ten teams, 10 will pay at least $800,000 for a guaranteed nonconference home game -- Illinois, Iowa, Michigan, Michigan State, Minnesota, Nebraska, Ohio State, Penn State, Rutgers and Wisconsin. Three schools -- Michigan, Michigan State and Nebraska -- will pay at least $1 million for a single game.
In total, Big Ten teams will shell out $22,868,246 for those 38 home games in 2014 -- an average of roughly $601,796 per game. The cost for the type of guarantees against Football Bowl Subdivision mid-major teams that don't require a return visit is significantly higher, with Big Ten teams paying an average of $827,838 on 17 games.
Given the importance of schedule strength because of the College Football Playoff and the dwindling pool of nonconference teams from which to choose, the Big Ten finds itself facing an interesting dichotomy in the future: one of supply and demand in which mid-major programs could soon possess the upper hand on the cost of guarantee games.
"Sometimes you don't have much choice," Wisconsin athletic director Barry Alvarez said. "There are only so many teams available, and it's very hard to find someone that's willing to come on an open date that matches yours. Many times, your back is to the wall and your selection is very small when you're scheduling these games."
Alvarez was the first Big Ten athletic director to speak out about the need to drop opponents from the lower-tier Football Championship Subdivision back in February 2013, calling such games "ridiculous" and "not very appealing." In order for Big Ten teams to compete for a spot in the four-team postseason playoff, conference athletic directors determined scheduling only FBS foes was the best course of action. That scheduling policy begins in 2016.
The consequence of making such a move, however, is the increased difficulty of finding guarantee games. There will be 124 FCS teams playing in 2014, as well as another 114 teams officially in the FBS, excluding the Big Ten. But Big Ten teams aren't likely to schedule a power-five conference opponent for a one-time home game, as those teams search for home games of their own, cutting the number of potential FBS opponents nearly in half.
Of the Big Ten's 39 nonconference home games in 2014, only six feature a team from another power-five conference -- and all six are the result of some type of home-and-home series. Meanwhile, there are 22 games against non-power-five FBS teams and 11 against the FCS. Only four of those 33 contests feature a return game -- Indiana-North Texas, Michigan State-Eastern Michigan, Rutgers-Tulane and Wisconsin-South Florida.
What is left when excluding power-five conference teams and the FCS are 63 opponents from the American Athletic Conference, Conference USA, the Mid-American Conference, the Mountain West Conference, the Sun Belt Conference, six independent teams and three schools playing FBS schedules while transitioning up from the FCS.
"Everybody is running into that," said Alvarez, who is one of 13 members on the College Football Playoff selection committee. "They realize that we're trying to strengthen our schedule. We would prefer to have Division I schools and some BCS schools. Strength of schedule is going to come into play in the ratings system. So everybody is going after the same people. They understand the game also. Those schools are trying to fight to keep their head above water."
The Big Ten, in essence, is facing a self-inflicted double penalty based on its decision not to play FCS teams. Though FCS opponents are plentiful, they also command far less money on the guarantee game market. Big Ten teams will pay an average of about $438,181 for 11 home games against FCS teams in 2014 -- roughly $389,657 less than the cost of a one-time FBS game guarantee. Last year, 10 Big Ten teams paid an average of $494,500 per home game against an FCS opponent, based on contracts obtained by FOXSportsWisconsin.com.
The decision to drop FCS teams leaves Big Ten athletic directors with three remaining options when scheduling games: Create a home-and home series against a power-conference team, play a neutral-site game or schedule a mid-major program for a one-time game guarantee. Talk also has surfaced recently of Big Ten teams scheduling other Big Ten schools in supposed nonconference games to boost schedule strength, though that option remains distant.
Alvarez said there are benefits to a neutral-site game because it creates more exposure and earns teams a payout from a third party. But he noted the payout does not match the amount a team would make for an average home game. Wisconsin, for example, will earn $2 million for playing LSU at NRG Stadium in Houston on Aug. 30. Purdue will take home $1.2 million for playing Notre Dame in the Shamrock Series on Sept. 13 at Lucas Oil Stadium in Indianapolis, according to game contracts.
Money made off ticket sales alone at schools such as Wisconsin and Iowa, however, approaches $3 million, according to Alvarez and Iowa athletic director Gary Barta, and most ADs want to keep games on campus. Schools with larger stadiums generally net between $5 million-$7 million from home games.
The home-and-home series with a power-conference opponent does cost significantly less -- $329,166, on average, for home games scheduled in 2014 -- but it also takes a home game away in another season. So while Ohio State will pay Virginia Tech the relatively low sum of $350,000 for a home game this season, the Buckeyes also must travel to Blacksburg, Va., in 2015. The same goes for Nebraska, which will pay Miami (Fla.) $300,000 for a September home game but will visit the Hurricanes next year.
That leaves the mid-major one-time guarantee route as the best option to consistently fulfill a seven-game home schedule each year without the need for a return game. And with profits from television at an all-time high, those smaller programs recognize many Big Ten schools are in position to pay more.
The Lafayette (Ind.) Journal-Courier reported in April that 12 of 14 schools are projected to receive $44.5 million each through the league's distribution plan when the Big Ten Network's new television contract begins in 2017-18. Recent conference additions Maryland and Rutgers won't receive full shares immediately. In 2013, Big Ten schools reportedly received $25.7 million each, including $7.6 million from the Big Ten Network. The payouts also included an expected $10.9 million in television revenue from the league's deal with ESPN/ABC.
Those are numbers that schools such as Miami (Ohio), with an annual athletic budget of roughly $25 million, Florida Atlantic ($25 million) and Ball State ($21 million) could never touch. But the money pouring into major programs, coupled with the need to find home games, has mid-major schools salivating to earn their biggest piece of the financial pie yet from game guarantees.
"Competition and demand," said first-year Florida Atlantic football coach Charlie Partridge, a former Wisconsin assistant whose team will earn $2 million off its first two games against Nebraska and Alabama this season. "Certainly, it's just Econ 101. Demand goes up, the payday goes up."
Just when the task of scheduling nonconference home games seemed at its most difficult for Big Ten teams, the conference has added a new wrinkle that will further enhance the struggle.
That's because the Big Ten is set to adopt a nine-game conference schedule beginning in 2016 instead of its current eight-game format. The move causes an unbalanced home-road ratio of games, forcing schools to rotate playing four and five home conference games each season. During years in which there are only four league home games, Big Ten programs will be almost obligated to schedule all three of their nonconference games at home.
"That's when you run into a problem," Alvarez said. "Everyone wants seven home games because you base your budget on it. So consequently, that's what you have to shoot for."
The ACC and SEC recently announced decisions to maintain an eight-game league schedule -- which keeps an FCS game in play -- and mandate playing a power-five conference foe each season. But the eight-game schedules leave four nonconference games, which reduces the pool of FBS opponents for Big Ten schools even more than previously anticipated.
All of it adds up to mid-major programs with an even greater ability to be choosy, to maximize profits as teams try to schedule games in the same September window. So if a power-conference program doesn't offer enough money because its stadium is smaller, schools can still look elsewhere, Sayler said.
Michigan, for example, has the largest football stadium in the country (109,901 capacity) and will pay $3.1 million for its three home games in 2014. Ohio State, home to the fourth-largest stadium in the nation, will pay $2,088,246 for three home games. But Northwestern, which has the smallest Big Ten stadium (47,130 capacity), will pay $1.075 million for three home games. The school's highest guaranteed payout this season is $500,000 to Northern Illinois.
"It all comes down to dollars and cents," Sayler said. "Everyone has to run their operation how they see fit. We'd love to play Northwestern because of our alums in Chicago. But they're not paying what Iowa is paying and Wisconsin is paying. So we're more apt to go to Iowa or Wisconsin and play those games and get a little bit of extra cash.
"Those are decisions that everybody has to make. Even in the Big Ten, it's amazing on the range of what Indiana versus a Michigan is paying. But that's the way business is."
Some athletic directors have expressed concern that visiting teams could ultimately net more than the home team for a guarantee game, although that thought seems unlikely in the immediate future. However, securing games for a reasonable rate could become so problematic that a Big Ten team might even resort to scheduling an FCS opponent if in a bind, according to Alvarez.
"When you put a pencil to it, can everybody get FBS schools?" Alvarez said. "Can you find enough of them? Do we have to make some exceptions and have some FCS schools? That's what you have to take a look at. In some cases, they're a tougher opponent than some of the FBS opponents.
"If your choice is to not play a game because you can't find anybody or play an FCS team, you don't have much choice."
For now, the desire of Big Ten teams to schedule quality nonconference home games is holding steady. Mid-major programs, meanwhile, will continue to welcome the opportunity -- and the financial gain.
Where the line is drawn on guaranteed payouts remains to be seen. But this much is certain: as inventory of possible opponents decreases, the cost of games will only increase.
"This is something that everyone has to figure out, and you have to be aggressive scheduling," Alvarez said. "You have to be out there a few years. You have to use all of your contacts as far as making games.
"In the same respect, those other athletic directors are sitting there saying, 'I've got this date open. I know these schools want it.' They're going to try to cut the best deal for them. That's what we're all dealing with, and you have to make it work the best you can."
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Guaranteed payouts of Big Ten schools
|Team||Opponents (payment amount)|
|Illinois||Youngstown State ($560,000), Western Kentucky ($875,000), Texas State ($860,000)|
|Indiana||Indiana State ($450,000), North Texas ($250,000*)|
|Iowa||Northern Iowa ($550,000), Ball State ($900,000), Iowa State ($0*^)|
|Maryland||James Madison ($325,000), West Virginia ($100,000*)|
|Michigan||Appalachian State ($1,000,000), Miami (Ohio) ($1,100,000), Utah ($1,000,000*)|
|Michigan State||Jacksonville State ($620,000), Eastern Michigan ($650,000*), Wyoming ($1,000,000)|
|Minnesota||Eastern Illinois ($400,000), Middle Tennessee State ($775,000), San Jose State ($800,000**)|
|Nebraska||Florida Atlantic ($1,000,000), McNeese State ($415,000), Miami (Fla.) ($300,000*)|
|Northwestern||Cal ($225,000*), Northern Illinois ($500,000), Western Illinois ($350,000)|
|Ohio State||Virginia Tech ($350,000*), Kent State ($850,000), Cincinnati ($888,246**)|
|Penn State||Akron ($850,000), UMass ($850,000), Temple (Not available***)|
|Purdue||Western Michigan ($525,000), Central Michigan ($500,000), Southern Illinois ($350,000)|
|Rutgers||Howard ($350,000), Tulane ($800,000*)|
|Wisconsin||Western Illinois ($450,000), Bowling Green ($800,000), South Florida ($300,000*)|
-- Total payout for 11 home games vs. FCS teams: $4,820,000. Average: $438,181
-- Total payout for 17 home games vs. FBS teams without return visit: $14,073,246. Average: $827,838
-- Total payout for six games vs. power-five FBS teams with return visits: $1,975,000. Average: $329,166
-- Total payout for four games vs. non-power-five FBS teams with return visits: $2,000,000. Average: $500,000
* Return game scheduled at opposing stadium.
** Second of a two-game home contract. Ohio State will pay Cincinnati $375,000 for the second game in 2018. Minnesota paid San Jose State $800,000 for the first game in 2013.
*** School officials from both Penn State and Temple declined to provide the game contract because the documents are not public record under Pennsylvania state law.
^ Iowa-Iowa State features no compensation paid by the home team to the visiting team for the last five games in the intrastate series from 2013 through 2017. From 2008-2012, the home team agreed to pay 20 percent of the gate receipts to the visiting team.