The Business of Sports

College Football's Higher Prices; U.S. Open's Shorter Skirts


1. College Football Kickoff 2010

Something Old, Something New, Something Borrowed, Something Blue: The old wedding saw could well describe the landscape of college football as the 2010 season kicks off this Thursday. While many aspects of the game could be categorized under the "old" and "new" headers, the "borrowed" aspect definitely points to college football's ever-growing mimicry of the National Football League. From scheduling to enormous digital scoreboards and mega-sponsorship deals to Personal Seat Licenses, the business of college football is looking a lot more like the pros every game day.

And the blue? All you have to do is look north, to the azure turf, BCS Championship Game prospects, and the new conference of that upstart darling/spoiler, Boise State.

A newly released NCAA report shows that just 14 of the 120 Football Bowl Subdivision (FBS) schools made money from campus athletics in the 2009 fiscal year, down from 25 the year before. That's certainly not college football's fault, as the gridiron typically generates more revenue for athletic departments than any other sport. Sixty-eight FBS schools reported turning a profit on football, with a median value of $8.8 million, while the 52 FBS schools that lost money on football reported median losses of just $2.7 million.

A growing revenue stream for many top 25 college football programs is a tried-and-true business model for the NFL: more games in NFL stadiums, starting with the handful of Labor Day weekend kickoff games at neutral NFL sites. From the Sept. 4 North Carolina-Louisiana State Chick-fil-A Kickoff game at the Georgia Dome in Atlanta, home of the Atlanta Falcons, to the marquee Oregon State-Texas Christian University matchup at Cowboys Stadium in Arlington on the same day, to the Sept. 6 showdown between Virginia Tech and Boise State at FedEx Field in Landover, Md. (home of the Washington Redskins), Labor Day weekend games have in recent years become literal big-ticket items. Virginia Tech, ranked 10th in the Associated Press preseason poll, will be guaranteed a $2.35 million payout by FedExField operators and broadcast rights holders; Boise State, ranked third, will take home at least $1.25 million. The NFL stadium operators are able to provide their suite and season ticket holders with yet another topflight event and look forward to the 60,000+ college football fans ready to pay top dollar for tickets and buy lots of beer—a commodity prohibited at almost all college stadiums.

Ticket Prices Soar

In general, prices for college football games are up dramatically since 2009, according to ticket search engine FanSnap.com. Third-ranked Ohio State University again takes the top ticket-price spot, at an average of $523.67 for home games, up from $319 last season. National Champion Alabama has the second-highest ticket, at $504, up from $204.70 last year. Spots five through nine are held by the SEC, topped by Georgia (fifth, at $369.40) and Florida (sixth, at $338.50).

Just when we thought the game of conference musical chairs was at a rest for at least the rest of 2010, here comes Brigham Young University and their announcement on Tuesday that they would vacate the Mountain West Conference and pursue their own destiny, à la Notre Dame. Apparently they don't like MWC newcomer Boise State any better than Oklahoma Sooner fans after the Mustang's trickery in the 2007 Fiesta Bowl … or the legions of college football fans who are affronted that, if they pull off a win against Virginia Tech, the small conference no-name might have a clear path to the BCS title.

Between Boise State and a resurgent TCU, the BCS Championship Game may well have a new contender, and in a few years it will also have a new sponsor. Last week, Discover Financial Services announced that it had signed a four-year, five-game deal with ESPN and the Orange Bowl Committee to sponsor the BCS Orange Bowl Game and the 2013 BCS National Championship Game in South Florida.

Under the partnership, Discover (DFS) will be the official card of the Orange Bowl and the Bowl Championship Series. Title sponsorship of the Orange Bowl and sponsorship of the BCS is further demonstration of Discover's commitment to college football: The credit-card company also has partnerships with Notre Dame Football on NBC and the Big Ten Network.

The Discover Orange Bowl is one of five BCS Bowl games, which take place annually in four locations: South Florida, Pasadena, Calif., Glendale, Ariz., and New Orleans. While all five games will be televised on ESPN as part of a new agreement, only one other BCS match has a title sponsor to date: Allstate has renewed as title sponsor of the 2011-14 Sugar Bowls and the 2012 National Championship Game.

2. This Season, It's (Almost) "GameDay" Every Day

Apparently, it's not enough that we now have college football broadcasts on almost every day or night of the week. Starting this weekend, we'll have to put the coffee on a wee bit earlier.

ESPN's venerable college football pregame show College GameDay is coming on the air at 9:00 a.m. ET this season, an hour earlier than in previous years. The opening hour will be hosted by Erin Andrews on ESPNU and populated with other ESPN personalities, top athletes, and coaches. GameDay begins its 24th season Sept. 4 in Atlanta, the site of the North Carolina-LSU Chick-fil-A Kickoff game. The expansion is not limited to football: ESPN announced last week it plans to expand the college basketball edition of Game Day by an hour as well, beginning with the season debut on Jan. 15.

The Big Ten Conference broke the college sports broadcast mold in 2007 when it formed its own cable network. The Big Ten Network venture has so far been a success, helping the Big Ten distribute nearly $20 million in shared revenue to each of its 11 schools in 2009. The ever-expanding network plans to introduce new production elements of interest this season, such as more music and graphics, and a new show, Big Ten Film Vault, hosted by Monday Night Football alum and Michigan All-American Dan Dierdorf. TV rights to the Big Ten's new football championship game, which will make its debut in 2011, could fetch $15 million to $20 million a year. The title game is not part of the conference's current TV rights deal with ABC/ESPN and will be treated as a separate property.

To the south, the Big 12 Conference is fast getting serious about a cable TV network of its own. The ADs of seven of the Big 12 schools met informally in Dallas on Aug. 20 to discuss their long-term broadcast options at a breakfast organized by Learfield Sports, which handles their multimedia rights negotiations. Existing broadcast deals with ABC/ESPN and Fox Sports resulted in conference revenue distributions of roughly $10 million each, on average, to member schools last year—about half what Big Ten schools are getting. The University of Texas did not participate and has been vocal about exploring a cable network of its own.

3. 2010 U.S. Open: This Year, the Buzz is All About the Gadgets and the Gals

It seems the U.S. Open organizers' strategy this year, in a New York fortnight without top-ranked women's player Serena Williams and without last year's men's champ, Juan Martin del Potro, is to provide as many high-tech gimmicks and short skirts to distract tennis fans as possible. Both inside the USTA Billie Jean King National Tennis Center and for those of us watching elsewhere, the plan appears to be working.

For the second consecutive year, ESPN2 is serving as the lead cable broadcaster for the Open, providing around 100 hours of TV coverage and more than 260 hours of coverage on its popular broadband network ESPN3.com. After USOpen.org introduced extensive live streaming of the event last year, the event's official website is now airing all matches shown on ESPN2, CBS (CBS), and Tennis Channel. Fans can stream up to five matches simultaneously. The streams also integrate live stat updates, picture-in-picture capabilities, and fan comments. CBS is streaming its tournament coverage on cbssports.com, including the men's and women's finals. All in all, the broad online availability is a godsend to tennis fans stuck in front of a computer and not a big-screen TV.

USOpen.org, working with sponsor IBM (IBM), is also expanding last year's popular U.S. Open iPhone application to provide Apple's (AAPL) iPhone users on-site an "augmented reality," in which they can take virtual tours of the U.S. Open grounds to check out what's happening on all the courts and quickly find rest rooms, food vendors, and first-aid facilities—reporting heavy use in this year's record heat. American Express is the exclusive sponsor of the U.S. Open iPhone application.

As usual, fashion plays a big part in the tennis being played in Manhattan, the sartorial capital of the U.S. Top women and men alike sport different ensembles for day and night matches (a tradition furthered by Maria Sharapova), with the night match clothing often looking like it could go straight off the court to a late dinner or dance club. No player this year looks more ready to party than does Venus Williams, who is apparently trying her hardest to make fans forget that a) her game currently has a few glitches, and b) little sister Serena is nowhere to be found, off nursing her injured foot. Williams' black night match dress, which she designed as part of her EleVen clothing line, is a more urban take on the Moulin Rouge getup she sported in Paris and her Wimbledon white fringe. The tight fitting black dress with thin straps and a faux leather ruffle, she told NBC's Today show, "is very New York … more 'in your face,' a little louder."

After Serena's verbal meltdown in the Finals last year, that's about as "in your face" as we're likely to see a Williams this time around.

Rick Horrow is a leading expert in the business of sports. As CEO 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 (February 2010).

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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