The Business of Sports

College Football’s Bowling for Dollars


One week after this Saturday’s Heisman Trophy Award ceremony, college football’s bowl season begins—spanning 24 days, 35 games, 70 teams, 16 states, more than $281 million in payouts to participating schools and conferences, and, across the U.S., regional economic impact adding up to more than $1.7 billion.

Long gone are the eras of the regional Peach Bowl, the Liberty, the quaint Bluebonnet. In 2011, every single one of the 35 bowl games has a title or presenting sponsor attached—with 11 games claiming only the name of their sponsor company as the event title. From the ridiculous (Taxslayer.com Gator Bowl, Belk Bowl, Beef O’Brady’s St. Petersburg Bowl) to the sublime (Bridgepoint Education Holiday Bowl, Insight Bowl, Kraft Fight Hunger Bowl), the bowl games and the corporate representation behind them represent the New Era Pinstripe Bowl of the college football juggernaut—and of the oft-debated Bowl Championship Series (BCS).

Or, as University of Oregon Head Football Coach Chip Kelly put it after winning the Pac-12 football championship last weekend, “We’re just so excited to represent this university in the Rose Bowl. Now we’re going to drink some Dr. Pepper and mail our Christmas presents with UPS.”

After a scandal-ridden season, led by contemptible allegations at the University of Miami, Penn State, and Syracuse (albeit in that school’s basketball program), it will be good to sit back and take in traditions old and new—and be sure to enjoy them now, because this year’s near-constant conference realignments are gonna mess with tradition in a big way come 2012.

This year’s bowl season, however, is not without controversy. Here’s a blow-by-blow analysis.

Too many bowls?

Maybe. Cynics argue that the “niche bowls” serve little purpose, and that bowl participation is a cash drain on all the schools involved. They ignore the big picture in four ways:

First, the 35 bowls give 70 schools an opportunity to participate in the postseason at a significant level. Overall, nearly half the Division I teams have the privilege of participating in postseason bowl games, a far greater percentage than the roughly 20 percent selected in the NCAA championships in other sports (22 percent in baseball; 20 percent in men’s and women’s basketball; and 24 percent in men’s soccer).

Second, where TV is concerned, adult bowl-game viewers largely comprise that most coveted demographic: college-educated viewers ages 18 to 49. Given this, get set for more than 1,400 hours of bowl coverage this year.

Third, Corporate America loves the exposure, and bowl titles potentially offer an efficient, effective buy. The last time the national championship was played in Arizona, naming right holder Tostitos—which is made by PepsiCo (PEP) subsidiary Frito-Lay—enjoyed nearly $76.6 million worth of exposure. “What’s really neat about the college space is that you don’t have to be a big multinational brand to get in. … Our affiliation around the sport, starting with the Chik-fil-A bowl, helps build on-campus and beyond relationships,” remarked Steve Robinson, Chik-fil-A‘s senior vice-president and chief marketing officer, at this week’s IMG Intercollegiate Athletics Forum in New York.

Finally, the economic impact for the host region is significant—such as the regional economic impact that adds up to more than $1.7 billion cited earlier.

How did we get to where we are?

This year’s Louisiana State-Alabama BCS selection resulted in the slimmest mathematical difference in the history of the eight years that the current formula has been employed—86 thousandths of a point (including numbers from two polls and six computer rankings). We think we have controversy now: The national championship vote has been split between coaches and writers 11 times since they began voting in 1954.

What is the “mediocrity index” of this year’s bowl games?

The 35 bowls and 70 teams inspire mediocrity of the highest level. This year’s 70 teams have 273 total losses between them (compared with 257 last year). This includes 12 teams that were 6-6 this year. In fact, while 70 teams will play in bowls, only 45 Division One teams were not bowl eligible. UCLA will play in the Kraft Foods Fight Hunger Bowl in San Francisco on New Year’s Eve with a 6-7 record. Previously, three teams have gone to bowls with losing records: 5-6 Troy State in 2001; 5-6 William & Mary in 1970; and 4-6 SMU in 1963.

What about corporate involvement?

Meineke Car Care Centers transferred its sponsorship from the game in Charlotte to the Texas Bowl. Department store owner Belk took over Meineke’s title sponsorship in Charlotte. The Idaho Potato Commission took over uDrove’s sponsorship of the Humanitarian Bowl in Boise and renamed the game the Famous Idaho Potato Bowl.

In New Mexico, Montreal clothing manufacturer Gildan (GIL), bought the title sponsorship to the New Mexico Bowl. The Gator Bowl in Jacksonville last year added Progressive Insurance (PGR) as title sponsor in the weeks leading up to the game. This year the Gator Bowl has TaxSlayer.com as its naming partner.

Breakdown of Naming Rights by Industry:
Consumer Goods: 9
Financial Services: 8
Restaurants: 4
Auto: 3
Aerospace/Defense: 2

How do the bowls help regional tourism?

Overall, 16 states (including the District of Columbia) are directly involved financially in supporting their bowls, understanding that more than $1.75 billion in economic impact is generated in the respective regions. Florida and Texas lead the way with six each; California and Louisiana have four; Alabama, Arizona, and Tennessee have two; New Mexico, Idaho, Nevada, New York, North Carolina, Michigan, Hawaii, District of Columbia, and Georgia have one each.

Regional bowl committees have refined the art of promoting and marketing the national championship game with their overall weekends. In New Orleans, the bowl season actually kicks off with the R+L Carriers New Orleans Bowl on Dec. 17, allowing 24 days of events, hospitality, and promotion between that game and the Jan. 9 National Championship.

Clearly, the impact has increased as the “plus one” system has been installed.

How do the conferences and schools fare this year?

Very well. Overall, the 35 bowls pay a total of over $281 million to conferences (who distribute the revenues based on their own individual formulas). This compares to approximately $261.7 million last year. As for the BCS game, their payouts approximate $181 million, up significantly from the $142 million last year.

The 2011 Heisman Trophy—One Honey of a Race

The Heisman Trophy will be awarded Saturday night for the 77th time. The two frontrunners for the coveted trophy are Stanford quarterback Andrew Luck and Baylor quarterback Robert Griffin III, favored by speculative sportswriters (ahead of fellow finalists Trent Richardson, Montee Ball, and Tyrann Mathieu, LSU’s defensive “Honey Badger”).

Luck is the only repeat finalist in this year’s field, and he is hoping to become Stanford’s second Heisman winner, joining quarterback Jim Plunkett, a winner in 1970. The Honey Badger, a cornerback, is the second defensive player to ascend to Heisman finalist in the past three years—Nebraska defensive tackle Ndamukong Suh finished fourth in 2009, before stomping his way into the NFL.

Stiffarmtrophy.com, which compiles ballots from Heisman voters who make their choices public and has predicted the past nine winners, has Griffin winning by a comfortable margin over Luck, with Richardson third.

Heismanpundit.com, which has successfully predicted the past four Heisman winners via a straw poll of 13 voters, had Griffin as its top pick on Monday. Luck was second, Richardson third.

Ballots from the 926 voters, including former winners and the media, were due Monday evening.

Whoever wins the award joins college football’s most exclusive fraternity—with the Heisman comes a lifetime of marketability and endorsement opportunities, which is good for some winners who have fizzled in the NFL.

One notable example is former Oklahoma QB Jason White, who owns and operates A Store Divided, an OU/OSU memorabilia store with several locations across the state. As for Heisman winners that have gone on to the NFL, seven of the last 10 were first-round draft picks. Former USC QB Carson Palmer has the biggest contract of any former Heisman winner, a nine-year, $119 million deal he signed with Cincinnati in 2005.

Here’s a look at the NFL fortunes (or lack thereof) of the last five Heisman Trophy winners:

Year: 2010
Player: Cam Newton
School: Auburn, QB
Drafted By: Carolina
Position: #1
Deal: 4 yr, $22m guaranteed

Year: 2009
Player: Mark Ingram Jr.
School: Alabama, RB
Drafted By: New Orleans
Position: #28
Deal: 4 yr (3 guar), $7.41m, $3.89m bonus

Year: 2008
Player: Sam Bradford
School: Oklahoma, QB
Drafted By: St. Louis
Position: #1
Deal: 6 yr, $78m, $50m guaranteed

Year: 2007
Player: Tim Tebow
School: Florida, QB
Drafted By: Denver
Position: #25
Deal: 5 yr, $11.25m, $8.7m guaranteed

Year: 2006
Player: Troy Smith
School: Ohio State, QB
Drafted By: Baltimore
Position: 5th round
Deal: 3 yr, then 1 yr, $1.101m*
*Smith was released by the Ravens in 2010, signed with the 49ers for 1 season, and now plays in the UFL

Left in the cold outside New York’s Downtown Athletic Club this year were a handful of other outstanding players, most notably USC quarterback Matt Barkley, Houston record-breaker Case Keenum, and Boise State play caller Kellen Moore. The three are now focused on their own decisions surrounding the NFL draft—and still look to make out like bandits.

Or honey badgers.

Rick_horrow
Rick Horrow is a leading expert in the business of sports. As chief executive officer of Horrow Sports Ventures, he has been the architect of 103 deals worth more than $13 billion in sports and urban infrastructure projects. He is also the sports business analyst for CNN, Fox Sports, and the Fox Business Channel. Karla Swatek is vice-president of Horrow Sports Ventures and co-author of Beyond the Box Score: An Insider's Guide to the $750 Billion Business of Sports (2010). Horrow is also the host of Sportfolio, a new program on Bloomberg TV that airs Wednesday nights at 9 pm ET.

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