College Sports TV Rights Bidding War on the Horizon
It seems that it is impossible to separate big-time college sports from business issues. Recent days have brought stories about the huge salaries being paid to men’s college basketball coaches as well as the growing gap between what the most successful women’s Division I college basketball coaches are paid compared to coaches at other Division I schools.
We have also read numerous reports about the pressures on the people running the football Bowl Schools (FBS) Bowl Championship Series. The five games in the BCS series played this past January on ESPN showed a 16% drop in viewership from the year before. This came in a year when non-BCS bowls showed a TV viewership decline of only 9%.
Normally the amount of money paid by TV networks to televise sports events depend on viewer ratings because high ratings allow networks to sell more advertising and to charge more for each advertising minute.
The current contract between the BCS and ESPN expires after the 2013 season. ESPN paid $125 million per year for four games in the current contract (the Rose Bowl has a separate contract with ABC for $37 million). Under the previous contract with Fox Sports, the BCS received $83 million annually.
Is it just a coincidence that the major players in the BCS have begun serious discussions about changing the format to determine who plays for the national championship? Many critics panned the selection of Alabama to face LSU in this year’s BCS Championship Game played in the New Orleans Superdome. Discussions have been centered on the use of a “plus one” model where the two highest rated winners of the 4 BCS games play for the national championship or on the creation of a 4 team playoff to follow all bowl games.
Given the rather steep decline in TV ratings for the 2012 BCS games the addition of some kind of “playoff” following the BCS games would seem to be a made for TV gold mine. Just what schools might need, given that a continued decline in TV ratings for the next two years would normally bring about the specter of less money being available under the next TV contract.
CBS Sports has recently beefed up its commitment to its CBS Sports Network. NBC recently bought the Versus Network and changed its name to NBCSports Network. Fox just announced plans to expand its regional sports channels into an international sports network designed to compete directly with ESPN. All of these media giants are going to be vying for the rights to major sports events. What might the BCS group stand to gain in TV rights revenues if it expands its BCS Bowl Series and adds some form of a playoff?
Anyone who things that big-time college sports is likely to rein in the chase for additional revenues and honor its professed devotion to the ideal of amateur sports where college student-athletes are students first needs to take a reality pill. Colleges and universities have to pay to play at the highest level. That means that these schools must constantly seek expanded sources of revenue. If that means that the major schools follow a business model rather than an educational model so be it.
Fans need to understand the relationship between their beloved university athletic teams and money. If financial realities dictate that universities charge licensing fees for seats and then charge $75.00 to $125.00 per seat then that is what colleges will do. If that means that the average graduate of old State U can no longer afford to bring a family of four to see a game that is just a consequence of progress.
We already have situations where the average fan is prohibited from bringing alcohol into stadiums while the well heeled supporters who can afford access to luxury suites can use wet bars in their suites to drink alcohol at games. Rather than looking at the hypocrisy of this situation schools are instead looking to serve beer in public concession areas in their stadiums. This comes at the same time that many schools are implementing alcohol awareness programs designed to help cut down on binge drinking among students.
All of us might be better served to simply recognize that college sports are big business. “Student-athletes” who are able to graduate with high GPAs are able to do so in spite of the system, not because of it. Fans wanting a nostalgic experience of attending a college game played by normal looking people in an atmosphere not dominated by advertizing and media timeouts can always attend a Division III game.
The train has left the station and it isn’t coming back.