Pac-12 revenue deficit (relative to SEC, Big Ten) is real, and it’s spectacular

Submitted by Kewaga. on

Interesting article regarding the comparitive financial health of the conferneces. 

 

2016 (actual)

SEC: $40.5 million
Big Ten: $34.8 million
Pac-12: $28.7 million
Big 12: $28.45 million
(The ACC has not reported FY16.)

 

2017 (projected)

SEC: $44 million
... (see article)

 

2018 (projected)

SEC: $45+ million
... (see article)

 

Conclusion:

Seven years of a $12+ million per year deficit for Pac-12 schools equates to an $84 million per school disparity, through the current Tier 1 deal, relative to schools in the SEC and Big Ten.

And $84 million per school for a 12-team conference is a $1 billion deficit.

 

 

http://www.mercurynews.com/2017/05/18/college-hotline-the-pac-12-revenu…

PopeLando

May 18th, 2017 at 11:51 PM ^

I don't know, man. This reads like lazy financial journalism: "check out this billion dollar gap in revenue! But don't look too hard at our methodology..." Interesting, but hardly a full picture of the total revenue received by PAC-12 schools' athletic departments. Also, on a separate note, this kind of revenue chasing incentivizes some seriously suboptimal behavior. Like locking in multi-year massive and restrictive TV deals, or chasing a large market at the expense of conference quality. Looking at things in this light is exactly what allows people to think that Delany is one of the top conference commissioners in the country.

CTG

May 19th, 2017 at 8:54 AM ^

But like it or not, non-revenue generating sports (and the athletes) are not going anywhere.  Maybe football players should be compensated somewhat, but other athletes/costs have to be taken into consideration (costs, not just revenues).  I'm in favor of letting college athletes profit off their image/likeness, but that opens up a whole can of worms to allow boosters around rules and under table dealings (I know, which already occur but not as voluminous as it would)

CarrIsMyHomeboy

May 19th, 2017 at 10:28 AM ^

In a version of Earth where the NCAA permits each student to freely chase his or her true market value (whether by appearing in advertisements, signing memorabilia, accepting $100 handshakes, whatever) the *only* incentive for "under table dealings" is tax evasion. 

In that world, there's no reason to expect the Bagman State would survive -- not in the secretive way, at least. Because bagmen want to give these gifts, whatever $50 or $50,000 handout that bagman wants to give contributes to that player's market value and is therefore allowed by the rules. As well as perfectly morally neutral.

The players would be expected to comprehensively account for all of these earnings and should expect to be policed exactly as much/little as the rest of us during tax season.

Carpetbagger

May 19th, 2017 at 12:50 PM ^

That's the perfect Libertarian viewpoint, and being one myself, I identify with it. However, to me, it's best to look at the limits the NCAA puts on player compensation as the college version of Pro salary caps.

The NCAA may cloak their rules in idealistic tenents such as student athletes and amateurism, but these rules mostly exist as a means of reducing competition between teams on the cost side as best they can, and keep a competitive on field product.

I'm highly in favor of that concept. And at least athletes, of whatever sport, have the opportunity to get an education. Anyone who has paid for their own, or is paying student loans should be able to identify with how much that education is worth, no matter where you got it.

maquih

May 19th, 2017 at 12:20 AM ^

I mean, who cares? Like, is the pac-12 going to go bankrupt or something? So what's the difference if they generate 28M or 40M per year? Especially since Michigan is not in the pac-12, I just don't understand why anyone on this board would care?

Vengeful Barbarian

May 19th, 2017 at 1:20 AM ^

exactly, when mt cable bill keeps going up, I don't give a Gucci (that was auto correct) about how much money the conferences are making. this just means I have to spend more and more money to make sure I have all the damn sports channels I need to watch the same Michigan football that used to be on TV for free. None of us are making any money off the tv contracts, and neither are the players, so why brag about how much money the BIG is making relative to other conferences?

M-Dog

May 19th, 2017 at 6:14 AM ^

Because it lets us afford things like former Super Bowl coaches and Performance Centers.

As a cold-weather school that is not dedicated to cheating as a way of life, it's the one advantage we do have. 

I have no problem at all with us taking full advantage of it.  And we are finally starting to do it.

I cherish the day when we beat USC in the Rose Bowl because they could not afford that one extra pair of eyes on the staff that noticed a snap count tell on a 4th and 1 alignment.

 

 

doggdetroit

May 19th, 2017 at 8:42 AM ^

I agree. No one can force the notoriously cheap Barry Alvarez to spend money at Wisconsin but at least he has the ability to do so. I think you're starting to see that in the lower tier schools as well with Minnesota hiring Fleck and Purdue hiring Brohm. I thought both those guys could get better jobs but it's pretty hard to turn down $20MM over 6 years if you're Brohm or $18.5MM over 5 years in the case of Fleck.

MGoStrength

May 19th, 2017 at 6:20 AM ^

I find it hard to believe that USC is not making money.  Am I reading that wrong?  If those schools are in the red why are their coaching salaries continuing to rise?

Qmatic

May 19th, 2017 at 8:32 AM ^

There are over 400,000 NCAA student-athletes, and just about all of them are going pro in something other than sports.

If these conferences pooled their money together and paid every student athlete, it would equate to a whopping $331.12 per athlete.

superstringer

May 19th, 2017 at 8:58 AM ^

I have been a huge proponent of bringing capitalist market economics  to the last bastion of communism in America -- the NCAA.  Where else do the owners of the service providers tell employees what they are worth and deny any bargaining whatsoever, and won't let them organize etc. because it's not in the alleged public interest.

BUT... we should bring capitalism to the sport, NOT socialism.

Some D-III gymnast shouldn't get the same paycheck as the starting SDE of the Crimson Tide.  No one is (or should be) saying that.  It's about leverage and market power.  Players on Bama and OSU have a lot more bargaining power than some D-III athlete who isn't even on scholarship.  That D-III athlete isn't making any revenue for his or her school.  So in no way should or will that D-III athlete get the same cut as the Alabama starting DL.

So I totally don't get why you do that math.  That would be like saying, if every employer pooled their revenues and divided it equally among all employees throughout the entire country, everyone would make $X.  But that means Jim Harbaugh makes the same money as the fry cook at Mickey D's.  Wrong country. 

CarrIsMyHomeboy

May 19th, 2017 at 11:09 AM ^

It's not discrimination on the basis of gender if the rule change broadly welcomes all NCAA athletes to chase their own market value. That's an equal opportunity available to every student already and suddenly all athletes, as well.

Obviously the revenue athletes (who happen to be young men) would earn far greater revenue because they have a far greater market value. Which is our world's economic order. Asking or expecting everyone to earn the same revenue isn't about Title IX; it's about overturning capitalism.

CarrIsMyHomeboy

May 19th, 2017 at 2:04 PM ^

Yes but none of these revenue sources (from advertisements, signatures, handshakes) would come from the schools. There's zero reason for you to assume that "letting the players get paid" necessitates that the A.D.'s pay them. And as you admit, if the universities aren't making the payments, Title IX does not apply. And I'm merely making that possibility explicit.

superstringer

May 19th, 2017 at 2:39 PM ^

I think the lawsuit of the US Woman's national soccer team is a prime example.  They are claiming they get less money than their male counterparts, despite doing exactly the same thing and under exactly the same rules (and looking way, way better in tight shorts).

In fact, though, the MARKETS are not the same.  Its not like two factory workers standing side by side pressing the same buttons.  Here, the market for male football is way different than the market for women's volleyball.  The DC Divas don't have a lawsuit that the Redskins players make more money.  (Yeah you'll have to look that up.)

How Title IX interact with this, I'm not sure -- no one has paid athletes at schools professionally, at least not without a bagman and a Southern or Ohioan accent.

MaizeAndBlueWahoo

May 20th, 2017 at 7:57 AM ^

Well, simply put, the DC Divas and Washington Redskins are two distinct organizations.  The mens' football team and the womens' tennis team at a particular school are not.  We already somewhat know how Title IX will interact with schools that pay players: it completely refuses to take into account that male athletes help pay for females.