With Missouri losing to Vandy, and Texas A&M almost losing to a program that has not won a conference game in 16 tries, I thought it would be a good time to revisit an excerpt of a piece I wrote about the Southeastern Conference (SEC) and its revenue sources back in April. This is the section about the addition of Missouri and Texas A&M and its affect on the SEC's main revenue producer, football. If you would like to see my complete breakdown of the SEC revenue and how it stacks up with other conferences (in Word or PowerPoint format) email me at johngibson2121@yahoo.com or message me on twitter @Jflashuby.
As of the fall 2012 sporting season, the SEC expanded to 14 schools with the addition of Missouri and Texas A&M, both formerly of the Big 12. Texas A&M brings a passionate fan base about football, a generally competitive team, and an exciting new coach to the field. Kyle Field is a historic football stadium currently the 13th biggest in the NCAA. They bring the Texas television market, more specifically the Houston market, ranked 10th biggest in the nation. This ties in with long-term profitability because instead of having at the most 10 Bowl Spots for 12 teams, the SEC has at the most 10 Bowl Spots for 14 teams. Therefore, in the future, as of right now, the SEC can only make the maximum amount of money of 10 Bowl spots; while splitting the revenue with more teams, which would inevitably put it at a loss. The SEC and its current bowl tie-in contracts are currently enforceable until after the 2013 season. They are marginal at best at every other sport the SEC competes in except Baseball, which is generally not a revenue producer in the SEC.
Even though Missouri has been a fairly competitive football program lately, their best asset to the SEC will be its passionate basketball fan base. Their basketball fans don't rival Kentucky's but it will start the SEC basketball season as the 2nd biggest by far. St. Louis and Kansas City has hosted numerous Big 12 championship games, including the last one, because Missouri's basketball fans come out in groves. This could be an asset to the SEC.
However, one of the biggest reason Missouri was added because of its television market as well. The St. Louis market is the 31st biggest in the nation. (1) However, bringing an extra team for a seasonal market at best could be a stretch in the long scheme of things. Additionally, Missouri, or more specifically St. Louis, is arguably a professional market. Missouri has 5 professional teams that have been entrenched long in the state's sporting history. The only other state that comes close to that in the south is Florida. One author's take while covering sports in Missouri was this: "Walking around the St. Louis Zoo, the grocery store, dropping my nephew off at school, watching people in the airport, I observed only a handful of "Mizzou" shirts. The sports media there barely covers conference realignment rumors. There is zero "buzz" about the SEC. The greatest attribute the SEC possesses is the passion of its fans."(2) The SEC maybe able to initiate the market early with big home games coming to Columbia in the fall, but in the long-run, will Missouri fans will travel miles away from home for any other sport other than basketball? That remains to be seen. (To update this section with real evidence, St. Louis is still proving to be a Professional television market earlier this football season. The St. Louis Rams 2nd game of the year, against the Lions, drew higher ratings than the Missouri/Georgia game; The highest watched game for Missouri in St. Louis in 5 years. I have not even mentioned the biggest stronghold of the state...the Cardinals.)
(7)
Lastly, I think what the SEC is missing is that it maybe harming its product. SEC is in demand right now because they have the most superior sports programs within its 12 institutions and its belief in revenue sharing which allows schools to compete on a more equal footing from facilities to coaches. However, 14 members in a major conference competing year-round are unchartered waters. The SEC already has the highest expenditures in athletics; with two additional teams, there will automatically be less money for the conference to split. (3) Additionally, there is talk that we can be losing some of our rivalries in football by staying at eight conference games. Missouri, in the Eastern Division, is at a huge geographical disadvantage compared to any other team in the conference. However, the product would be at a huge disadvantage by scheduling nine games. With the SEC's recent championships and bowl win-loss record, its biggest threat to win championships and make more money is itself. By scheduling nine games, teams in the SEC will automatically schedule lighter, losing out on money by competing with other conference's teams such as Penn St., Michigan Texas etc. Therefore, the SEC's decision on realignment of its teams has the potential to backfire long-term if it does not do its homework on how to handle the fourteen institutions after this inaugural year.
2. Bowl-Tie-ins
Another way the SEC makes revenue is through Bowl games. In the last 5 years, the SEC has been getting an average of 9 of its 12 schools into bowls, higher than any other conference. With Bowl games, the two teams participating split the payout from participating. However, the SEC has its own rules on how to handle those payouts:
*For bowl games with receipts <$1.5M, the participating school retains $925k plus travel expenses; the remainder is remitted to the SEC.
*For bowl games with receipts of $1.5M or more, but <$4M, the participating school retains $1.125M plus travel expenses; the remainder is remitted to the SEC.
*For bowl games with receipts of $4M or more, <$6M, the participating school retains $1.325M plus travel expenses; the remainder is remitted to the SEC.
*For bowl games with receipts of >$6M, the participating school retains $1.825M ($1.925M if it's the MNC); the remainder is remitted to the SEC.
All of the money that is remitted to the SEC above is pooled; the SEC and each member school get 1/13 of the pool.
(4)
(From the SEC Constitution) (Pg. 42)
The SEC has nine bowl tie-ins not counting the national championship game. The Bowl tie-ins are the Sugar, Capital, Outback, Cotton, Chick-Fil-A, Gator, Music-City, Liberty and Compass. These bowl games alone are worth $78.16 Million dollars or $8.7 Million dollars per bowl game. (5) To put this in even more perspective, the rest of the teams left participating in bowls across the various conferences are left only $202 million once the SEC takes its share. The SEC would only forfeit these games if they had multiple teams in the BCS, and other teams not being the minimum of the now 6-6 mandate.
This ties in with long-term profitability because instead of having at the most 10 Bowl Spots for 12 teams, the SEC has at the most 10 Bowl Spots for 14 teams. Therefore, in the future, as of right now, the SEC can only make the maximum amount of money of 10 Bowl spots; while splitting the revenue with more teams, which would inevitably put it at a loss. The SEC and its current bowl tie-in contracts are currently enforceable until after the 2013 season. (6)
Additionally, there has been talk of making a tougher bowl game criteria which no doubt, would affect the SEC's bottom line in the long run. The proposal is that teams must have an overall record of at least 7-5 to participate in the bowls. This would help the case for a playoff, but harm the SEC's revenue yearly, especially since it expanded the league to 14. If this proposal was in effect last year, the SEC would have had three less bowl teams but more importantly, would have lost $4.2 million dollars in bowl payouts. Which would lead me to ask; just what exactly do Missouri and Texas A&M bring to the table again?
*Updated Notes as of October 6th, 2012:
- There will be a playoff format in Division I football as of 2014 (HA! Thank God.)
- Traditional Rivalries have already been affected with these two teams alone: In the "two money making" sports, Missouri is not scheduled to play Kansas, Nebraska, Oklahoma or Iowa St. in ANYTHING. The Arch Rivalry in Basketball with Illinois is on schedule this year. Texas A&M has ceased playing Texas, its biggest rival. They get to renew their rivalries with LSU, but will step out of the local rivalries with Baylor, Texas Tech and TCU. They are on schedule to play the inferior programs of Rice and SMU in football and Houston in basketball.
- The SEC and the Big 12 (how fitting), has added the Champions Bowl, but it is unclear to me whether or not this will be an additional bowl or re-naming/taking the place of another bowl (like the Cotton) because of the SEC's history with the BCS. It does start in 2015; after the first year of the playoff in college football.
- As of Oct. 6th, the SEC has 7 teams with 1-loss or less, and 10 teams that are .500 or better; making the hypothetical of fighting for the 10th bowl spot a real possibility…
(1)
http://www.al.com/sports/index.ssf/2012/04/new_sec_members_missouri_texas.html
(2)
http://dev.chuckoliver.net/2011/08/missouri-doesnt-show-me-it-belongs-in-sec/
(3)
http://www.bizjournals.com/memphis/news/2012/02/16/collegiate-athletic-conferences-generate.html
(4)
http://sec.xosdigitallabs.com/Portals/3/SEC%20Website/football/Constitution.pdf
(6)
http://www.mrsec.com/2012/04/slive-talks-new-bowl-possibilities-for-his-league/
(7) http://www.stltoday.com/entertainment/television/dan-caesar/rams-tv-ratings-rise-but-fall-short-of-last-years/article_4769cd9e-77ff-59f6-8fe9-4d7fbb37e052.html
