GoldRing: "If there is a TV post season Bowl game that is being sponsored by big money Business. And the multiply million dollar paid off to the college football teams who are match up, is greater, and greater each year. Why then are we getting reports that some bowl teams are losing a lot of money for there schools playing in some of the self same postseason Bowl's. "Because of a lack of tickets sales." Something is not adding up. Lets try and follow the Bowl money. Then let's see where the money trail leads us. Are we running into a slight of hand much like what goes on in Washington DC?"
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http://www.ledger-enquirer.
Alabama football: Where does bowl money come from and go?
College football’s postseason isn’t about only the scoreBy Michael Casagrande — Special to the Ledger-Enquirer
TUSCALOOSA, Ala. -- There’s no denying what fuels the college football bowl season.
It’s green and piles high for those invited.
Simply playing in the postseason means a healthy payout, but it isn’t as simple as cashing the check.
Bowl season is full of asterisks, fine print in an interesting study in how the numbers add up, who benefits and who is left out.
The most-referenced number is the payout received by each team playing in a bowl game. For Alabama, playing in the Jan. 1 Capital One Bowl against Michigan State means a pay day of $4.6 million -- at least that’s how it comes in to start. The payout from last season’s Bowl Championship Series national title game was $18 million.
Outside factors, though, play into how much is actually received.
First the bowlsells each school 12,500 tickets to the game. Any seats left unsold is a loss for the school, but Alabama easily sold its share, with a few thousand extra ticket requests to spare.
Matt Repchak, the associate director of communications for the Capital One Bowl, said the tickets that don’t sell are donated to underprivileged children in the Orlando area.
Travel expenses also come out of the payout -- a number that wasn’t known before the team arrived in Orlando but one that won’t be low considering it’s a resort area in a holiday season. The standard rate for a room at the team hotel next week is $199 per night.
After expenses, the team payouts from all the SEC bowl teams are added together and distributed to the conference’s 12 members. Last season, the 12 teams shared $22 million from the BCS alone, according to the Sports Business Journal, with Alabama and Florida playing in the premier games. Including the other bowl games with teams from the SEC, and $26.5 million ultimately was distributed.
Revenue from various sources.
The source of the payout cash comes from a few different places.
According to tax documents posted on guidestar.org from bowl host Florida Citrus Sports Association, the 2009 Capital One Bowl generated $6.1 million from media rights, $4.4 million from tickets and nearly $64,000 from corporate tents. Total revenue, including merchandising, was more than $11.9 million.
Not all the money made goes back into the pockets of the participating universities.
The Capital One Bowl is hosted by the Florida Citrus Sports Foundation, a not-for-profit organization that benefits children in the Central Florida region.
According to tax filings, the foundation paid $209,717 in scholarships for the 2008 tax year when revenues totaled $532,347. Another $275,226 went to expenses for children’s camps.
“We tend to focus on programs that give opportunities to youth in Central Florida that otherwise wouldn’t have those opportunities,” Repchak said. “We have a summer camp program that emphasizes academics and character building that is free to families that qualify.”
Players also benefit
The players also come away from the bowl experience with more goodies with than they had when they arrived.
NCAA rules allow for players to receive gifts totaling $500 at each bowl game. At the Capital One Bowl this season, that means a $420 shopping spree at a local Best Buy and an $80 watch for each Alabama and Michigan State player. The bowl host pays for the gifts that totaled $164,626 in 2009.
It’s just one of the many perks of the postseason that Alabama players said they were more than excited to receive. For center William Vlachos, spending money on technology won’t be so easy.
“I’m not big on electronics; my dad has to hook up my DVD player,” he said. “I’m not good with electronics. I don’t have many. I’ll have to get in there and find something, maybe a bunch of movies. I don’t know.”
Electronics are fine, but don’t try to bring any form of gambling to a bowl game associated with the NCAA. Alcohol is another frowned upon venture with the bowls.
A 47-page postseason football guide published by the NCAA spells out a host of rules pertaining to who can advertise, host or sell products at bowl games and surrounding events.
For example, title sponsors may not be any form of a lottery (page 24) and no bowl-sponsored activity can take place in a casino (page 22).
When it comes to a major money-maker in booze, the handbook is less restrictive.
“Although the NCAA encourages sponsoring agencies to prohibit the sale of alcoholic beverages,” the book states, “it is the prerogative of the bowl to determine if these products shall be sold or otherwise made available for public consumption.”
Repchak said alcohol will be for sale at the game.
Advertisements from tobacco companies, organizations promoting gambling and beverages exceeding 6 percent alcohol by volume are prohibited.
At the end of the day, two teams will play a 60-minute football game on a 100-yard field.
Those numbers tell just part of the story behind the inner-workings of a major college football bowl game.
It’s that green-colored fuel, though, that powers the machine every December and January.
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http://usatoday30.usatoday.
$17M BCS payouts sound great, but ...It’s green and piles high for those invited.
Simply playing in the postseason means a healthy payout, but it isn’t as simple as cashing the check.
Bowl season is full of asterisks, fine print in an interesting study in how the numbers add up, who benefits and who is left out.
The most-referenced number is the payout received by each team playing in a bowl game. For Alabama, playing in the Jan. 1 Capital One Bowl against Michigan State means a pay day of $4.6 million -- at least that’s how it comes in to start. The payout from last season’s Bowl Championship Series national title game was $18 million.
Outside factors, though, play into how much is actually received.
First the bowlsells each school 12,500 tickets to the game. Any seats left unsold is a loss for the school, but Alabama easily sold its share, with a few thousand extra ticket requests to spare.
Matt Repchak, the associate director of communications for the Capital One Bowl, said the tickets that don’t sell are donated to underprivileged children in the Orlando area.
Travel expenses also come out of the payout -- a number that wasn’t known before the team arrived in Orlando but one that won’t be low considering it’s a resort area in a holiday season. The standard rate for a room at the team hotel next week is $199 per night.
After expenses, the team payouts from all the SEC bowl teams are added together and distributed to the conference’s 12 members. Last season, the 12 teams shared $22 million from the BCS alone, according to the Sports Business Journal, with Alabama and Florida playing in the premier games. Including the other bowl games with teams from the SEC, and $26.5 million ultimately was distributed.
Revenue from various sources.
The source of the payout cash comes from a few different places.
According to tax documents posted on guidestar.org from bowl host Florida Citrus Sports Association, the 2009 Capital One Bowl generated $6.1 million from media rights, $4.4 million from tickets and nearly $64,000 from corporate tents. Total revenue, including merchandising, was more than $11.9 million.
Not all the money made goes back into the pockets of the participating universities.
The Capital One Bowl is hosted by the Florida Citrus Sports Foundation, a not-for-profit organization that benefits children in the Central Florida region.
According to tax filings, the foundation paid $209,717 in scholarships for the 2008 tax year when revenues totaled $532,347. Another $275,226 went to expenses for children’s camps.
“We tend to focus on programs that give opportunities to youth in Central Florida that otherwise wouldn’t have those opportunities,” Repchak said. “We have a summer camp program that emphasizes academics and character building that is free to families that qualify.”
Players also benefit
The players also come away from the bowl experience with more goodies with than they had when they arrived.
NCAA rules allow for players to receive gifts totaling $500 at each bowl game. At the Capital One Bowl this season, that means a $420 shopping spree at a local Best Buy and an $80 watch for each Alabama and Michigan State player. The bowl host pays for the gifts that totaled $164,626 in 2009.
It’s just one of the many perks of the postseason that Alabama players said they were more than excited to receive. For center William Vlachos, spending money on technology won’t be so easy.
“I’m not big on electronics; my dad has to hook up my DVD player,” he said. “I’m not good with electronics. I don’t have many. I’ll have to get in there and find something, maybe a bunch of movies. I don’t know.”
Electronics are fine, but don’t try to bring any form of gambling to a bowl game associated with the NCAA. Alcohol is another frowned upon venture with the bowls.
A 47-page postseason football guide published by the NCAA spells out a host of rules pertaining to who can advertise, host or sell products at bowl games and surrounding events.
For example, title sponsors may not be any form of a lottery (page 24) and no bowl-sponsored activity can take place in a casino (page 22).
When it comes to a major money-maker in booze, the handbook is less restrictive.
“Although the NCAA encourages sponsoring agencies to prohibit the sale of alcoholic beverages,” the book states, “it is the prerogative of the bowl to determine if these products shall be sold or otherwise made available for public consumption.”
Repchak said alcohol will be for sale at the game.
Advertisements from tobacco companies, organizations promoting gambling and beverages exceeding 6 percent alcohol by volume are prohibited.
At the end of the day, two teams will play a 60-minute football game on a 100-yard field.
Those numbers tell just part of the story behind the inner-workings of a major college football bowl game.
It’s that green-colored fuel, though, that powers the machine every December and January.
-----------------------
http://usatoday30.usatoday.
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By Thomas O'Toole, USA TODAY
Like most aspects of college football's bowl
system, determining a game's per-team payout is more complicated than
ever. What you see usually isn't what a school gets.
Changes in Bowl Championship Series revenue
distribution and the elimination by the NCAA in the last three years of a
minimum payout have helped make it possible for teams playing in the
same game to receive different amounts. Champions from the six major conferences will generate $17 million apiece for their leagues in BCS games. Boise State and Notre Dame, also in the BCS, will make vastly different amounts: $9 million by Boise for five other I-A leagues to share and $4.5 million for independent Notre Dame to keep.
Meanwhile, the Texas Bowl is paying Kansas State $750,000, according to Bob Burda of the Big 12. Its opponent, Rutgers, is getting $500,000, according to Nick Carparelli of the Big East. In the past, bowls had to guarantee at least $750,000. Now they negotiate with conferences.
"To list bowl payouts is deceiving," said Carparelli, Big East associate commissioner. "What you get from each bowl is almost irrelevant."
Dennis Poppe, NCAA managing director for football and baseball, said eliminating a minimum "basically was a change in philosophy. The required payout was somewhat artificial. It was a false payout situation that sometimes required (schools) to purchase a significant amount of tickets."
The Hawaii Bowl, for example, is paying $398,000 to the Pacific-10 for Arizona State's appearance. But the bowl is requiring teams to guarantee only 1,200 tickets, according to Pac-10 spokesman Jim Muldoon, instead of thousands more as in the past.
Many conferences split revenue equally, meaning Duke, which went winless, will receive the same cut from the Atlantic Coast as Wake Forest, which is in the FedEx Orange Bowl. Of course, the exposure and merchandise sales and other revenue streams tied to a BCS game are significant.
Inside some of the bowl payouts:
•The Big Ten will divide $34.4 million and, after all expenses are taken out, each of the 11 schools will receive about $2 million. It will cost the conference about $10.95 million for the seven Big Ten teams to travel to their bowl destinations.
•Other conferences, including the Atlantic Coast, Pacific-10 and Western Athletic, also divide money evenly after expenses. The Pac-10, said spokesman Jim Muldoon, gives "teams a set expense budget plus actual charter costs. It depends on what bowl you go to." Muldoon said the league will pay $300,000 for Arizona State to help cover expenses to the Sheraton Hawaii Bowl, calling that game a special case.
•The Big East pays schools that make a bowl game on a tiered basis, with a BCS game worth $2.4 million, the second bowl $1.6 million, the third $1.3 million and the fourth and fifth $1.1 million. "We just take all our bowl money, put it together, and we distribute it fairly," said associate commissioner Nick Carparelli, adding that the league wants to make sure schools can cover their expenses.
•At least two bowls, the Chick-fil-A and Texas, pay different amounts to conferences based on the place of those teams in the standings.
Boise State fattens take for second tier
While the six conferences with guaranteed spots in the Bowl Championship Series each receive at least $17 million, the five other I-A leagues will receive a total of approximately $18 million. That's double what they would normally make because of Western Athletic Conference champ Boise State's spot in the Tostitos Fiesta Bowl.
The non-guaranteed leagues (Conference USA, WAC, Mountain West, Sun Belt, Mid-American) receive 9% of the projected BCS net revenue, or about $9 million on an annual basis, according to the BCS. That increases by another 9% when a team from one of those leagues is in a BCS game.
The leagues then negotiate a split, with the biggest share going to the participating conference. Of the WAC's money, more than half will go to Boise State. Athletics director Gene Bleymaier projects that at $3 million to $3.5 million.
***
Contributing: Andy Gardiner, Kelly Whiteside and Tom Lambert
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http://www.nj.com/news/index.
Bowl or bust? Rutgers facing thousands of dollars in unsold postseason tickets
By
Star-Ledger Staff
By Ted Sherman and Jarrett Renshaw/The Star-Ledger
Rutgers takes the field against Virginia Tech next Friday at the Russell Athletic Bowl in Orlando — a prestigious game for the Scarlet Knights with a bigger audience, more TV revenue and prime-time exposure for the school.
But in a strictly financial sense, both teams will likely be losers.
Required to purchase thousands of tickets to the game, no matter how many they actually sell, the two schools are expected to eat thousands of dollars in unsold or free seats, adding to the cost of an already expensive post-season showcase experts say is rarely profitable for teams.
"The ticket piece is complicated," Rutgers Athletic Director Tim Pernetti said. "Once you accept (a bowl bid), you are on the hook for the cost."
Reports filed with the National Collegiate Athletic Association show that nationwide last year, schools were saddled with $12.8 million in bowl tickets that went unsold or were given away — up more than $1 million from the previous year.
At the same time, athletics officials say, ticket sales on the secondary markets are competing with teams and bowl organizers for the same fan base like never before.
For example, Rutgers must sell its allotted Russell Athletic Bowl tickets for $72 a seat. Yesterday on StubHub.com, a fan could pay less than $5 for the cheapest seat in the stadium — and just $14 on the lower Rutgers sideline near mid-field.
• Rutgers players say they're not insulted being an underdog to 6-6 Virginia Tech
• Rutgers coach Kyle Flood says team is eager for 'second season' in Russell Athletic Bowl
• Rutgers Football stories and columns
• Rutgers Football photos
• Rutgers Football videos
Under its bowl contract, Rutgers must buy 12,500 seats. So far, it has sold 5,550.
The other side is not doing much better. Virginia Tech Athletic Director Jim Weaver told a radio show last week that the school had sold fewer than 3,000 tickets.
"The postseason is important, but the risk is transferred instantaneously to the institutions" Pernetti said.
Steve Hogan, chief executive officer of Florida Citrus Sports, which runs the Russell Athletic Bowl, acknowledged that ticketing has been a mounting question for institutions.
Sales on the secondary markets affects both bowl organizers and the schools, based on the demand for tickets, he said.
"It puts downward pressure on tickets," he said. "It’s a concern and something we all have to deal with. It’s definitely something we all want to fix."
Postseason has long been an expensive game. See and read more...http://www.nj.com/news/
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The File Blog
Following the big bowls' big money
January, 3, 2012
By
Shaun Assael
AP Photo/Dave MartinThe Sugar Bowl committee directs the BCS National
Championship Game this year after doing the same for Tuesday's Sugar Bowl.
A quick look at the Sugar Bowl's IRS disclosure form suggests it's very charitable. The filing reports that the organization, which this year directs the Sugar Bowl on Jan. 3 and Monday's title game, gave away $6.21 million in grants in the fiscal year ending June 2010, a princely sum by any standards. But look a little closer, and you'll find that figure is not what it seems.
Except that's not really how it works. The money that the bowls send to the BCS is actually used to subsidize the high-priced tickets they force universities to buy.
Consider last year's Sugar Bowl. Arkansas and Ohio State signed game contracts requiring them to buy blocks of 17,500 tickets. At the end of the day, the Razorbacks came up $342,980 short on their unsold tickets while the Buckeyes ended up eating $149,330. Add in expenses, and even though they received $3.9 million in combined payouts from the BCS (via their conferences), Arkansas reported a measly $5,525 profit, while Ohio State made $288,876.
The Sugar Bowl maintains that it needs that ticket money to host its game and related activities. "You name the sport, we're involved in [financing] it," Sugar Bowl spokesman John Sudsbury says.
But go back to that grant figure. Minus its $6 million payment to the BCS, the Sugar Bowl donated just $210,056 to charities in the fiscal year ending June 2010. Its grant recipients included the Southern Yacht Club ($16,500) and the Friends of
New Orleans Lacrosse ($12,536).
ESPN owns seven non-BCS bowl games and holds the BCS broadcast rights through 2014.
What's even more interesting is how much the Sugar Bowl spends on itself. According to this document that the Sugar Bowl filed with the state of Louisiana two years ago, it's projected operating budget for 2009-10 was $5.6 million, roughly the same amount it sent to the BCS.
The figure that stands out most is $1.1 million. That's the amount that went to pay the salary of its chief executive, Paul Hoolahan ($593,718), and two top aides.
AP Photo/Paul ConnorsFormer Fiesta Bowl CEO John Junker, right, and Boise State coach Chris Petersen in 2009. How good is Hoolahan at what he does? In addition to pocketing more than the top three executives of the Rose Bowl, he persuaded the state of Louisiana to give his bowl $1.4 million for its 2010 game. While he had to promise that the money wouldn't be used for staff salaries, the Sugar Bowl used it to help cover its BCS disbursement, which, as we've seen, at least partially went to paying for the tickets that finance his salary.
Hoolahan isn't the only one making out like a bandit. In Miami, Orange Bowl CEO Eric Poms banked $507,000 in the fiscal year ending June 2010, and that doesn't include perks like having an off-duty Florida Highway Patrol officer shuttle him around.
How did these guys get so rich and powerful without anyone knowing their names? Like good party hosts, they fly under the radar while making sure everyone had a drink in their hand. The Orange Bowl holds cruises for athletic directors and conference execs. The Sugar Bowl holds parties.
But in Phoenix, the Fiesta Bowl's former CEO John Junker may have gotten a little greedy. He is accused of reimbursing employees for donations they made to political candidates who could keep the gravy train rolling. A series of articles by Craig Harris of The Arizona Republic exposed that and more: lavish parties, bloated salaries and, inevitably, strip club bills.
The feds are looking into the deposed Junker's reign, his former chief operating officer is under indictment, and a lobbying group known as Playoff PAC is asking the IRS to look at all of the bowls, alleging a pattern of frivolous spending, undisclosed lobbying payments and bloated salaries.
Where is this heading? Maybe to the worst four-letter word a bowl chief can hear: UBIT.
It stands for "unrelated business income tax." Here's why it matters: Nonprofits get a free pass on income related to their charitable missions, but anything outside that mission is subject to being taxed. The Orange, Sugar and Rose bowls claimed exactly zero in UBIT revenue in their fiscal year 2010 filings. The Fiesta Bowl reported $3,054.
Marcus Owens, a former high-ranking IRS official who ran its Exempt Organizations Division, says unrelated business income "has always been a playground for tax lawyers." It appears to him that the bowls have gone too far in writing off advertising and sponsorship revenues. He is advising Playoff PAC, which plans to file a complaint with the IRS later this month alleging the BCS bowls serially under report taxable income.
Granted, it's hard to get worked up about corporate business taxes, but this is one investigation that the bowl chiefs really don't want. According to Owens, the NCAA litigated the issue in the 1990s and came away with a federal court ruling that the organization didn't have to pay taxes on income such as advertising in once-a-year game programs. But the business of college sports is much bigger now, and Owens says the IRS may be tempted to take another look.
Enjoy the game. To the people running it, it might as well be called the UBIT Bowl.
http://www.usatoday.com/story/
The Windfall Bowl: Pay for bowl directors keeps rising
Brent Schrotenboer, USA TODAY SportsCompensation for bowl directors continue to rise, even as some question whether non-profits bowls that rely on universities for revenue should pay their executives so well
Story Highlights
- The average pay of a bowl director hit $438,000 last year, more than doubling since 2002.
His name is Jim McVay, the game's president and chief executive officer.
According to tax forms, the bowl paid McVay $753,946 in fiscal year 2010, $693,212 in 2009 and $808,032 in 2008. His pay has nearly doubled since 2002, when he earned $404,253. This year, his game matches Michigan (8-4) and South Carolina (10-2) on Jan. 1.
"He's done a fabulous job," says Mike Schulze, a spokesman for the game. "It's about being fairly compensated based on what the market dictates."
It's a payday market that's gotten especially hot the past 10 years. A bowl boss' average compensation last year was $438,000, more than double since 2002 and 32% more than 2006, according to tax forms for 15 of the oldest nonprofit bowl organizations.
Even second-tier games such as the Gator Bowl and Kraft Fight Hunger Bowl pay their executives at least $375,000.
The bowls say their salaries are set according to the job and the market. But critics and others have continued to raise concerns about such pay being excessive for a number of reasons, including where the bowls get their revenue and how their salaries are determined.
Most bowl games are tax-exempt charitable organizations that in most cases stage one game per year. They're also heavily subsidized by participating teams and conferences that combined to pay the bowl games $20.9 million last season for unsold tickets, according to documents obtained by USA TODAY Sports.
With the first of 35 bowls kicking off Saturday Dec. 15, USA TODAY Sports examined dozens of the bowls' tax filings over the past 10 years to compile a list and explore how these tax-exempt bowls set their pay packages. The filings show that many bowl games have used a survey of each other's pay to help adjust their own pay scale — a practice that can create a self-perpetuating cycle of bigger and bigger paychecks.
Bowl boss salaries are "skewed," says Richard Southall, director of the College Sport Research Institute at North Carolina.
For comparison:
- Five bowl bosses made more than the CEO of the American National Red Cross, who last year made $561,000 while overseeing revenues of $3.5 billion. The Outback Bowl takes in revenues of $10 million, and most bowls take in $1 million to $25 million in revenues.
- Bowl boss pay increased 32% from 2006-10, exceeding the rate of increase for corporate executives, a group that's been pilloried by politicians because of their large pay packages. Yet from 2007-11, corporate executive pay rose less — 23% according to executive data firm Equilar.
- The median salary for the 15 bosses at the non-profit bowls reviewed by USA TODAY Sports is about three times higher than the $132,739 median for a nonprofit chief executive, according to a study of 3,786 mid-to-large charities in 2010 by Charity Navigator, a charity watchdog.
- Several state governments recently have capped or proposed capping salaries of some nonprofit CEOs to under $200,000. Such laws likely won't affect the bowls because they generally apply only to nonprofits that receive considerable revenue from the state.
- Besides these 15 older bowl organizations, some bowls have taken a more conservative approach. A spokesman for the New Orleans Bowl said compensation for its employees is not disclosed because nobody makes more than $100,000. The executive director of one of the newest bowl games, the Military Bowl, made $156,471 in fiscal 2010.
The big question many critics have is, "What do these bowl bosses do the other 11 months of the year?"
Negotiations with TV and conference partners are part of it, though those contracts are multi-year deals. Even the team selection process is largely automated by contract. Each game usually gets a certain slot in the pecking orders of certain leagues, unlike decades ago when bowls negotiated to land certain teams.
"We have an event almost every month associated with our two bowl games, and you spend the entire year selling sponsorships," says Bruce Binkowski of the Holiday and Poinsettia Bowls. "Sometimes I'm busier from January through May than from September through December with all the different things we do."
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Setting pay
Nonprofit bowls are governed by volunteer boards of directors, which typically include local business people and community leaders. Several bowl tax forms say their boards determine executive pay after reviewing a survey of what other bowls pay their executives.
But even the head of the bowl industry's own trade group acknowledges the survey can be "self-fulfilling." The survey includes the range of compensation for bowl employees, including the median and the mean. So if a bowl boss gets a raise, the survey will show higher average pay, creating pressure on other bowls to pay more.
"It's self-fulfilling if you are only looking at your own industry," says Wright Waters, the director of the Football Bowl Association, a nonprofit that is funded by the bowls to promote them.
Waters, previously the commissioner of the Sun Belt Conference, says pay "ought to be work-related."
The FBA previously had spent more than $12,000 per year to have Ernst & Young conduct the survey. After Waters took over this year, he told USA TODAY Sports the survey would be discontinued, largely because the FBA can't afford.
Some bowl officials minimized the survey's impact in determining salaries.
"I wouldn't want to be quoted sliming another bowl, but we wouldn't take a cue from other bowls on what they pay their executives," says John Wertz, president of the San Diego Bowl Association, which operates the Poinsettia Bowl and Bridgepoint Education Holiday Bowl. "We try to do it based on what's fair and reasonable in San Diego."
The San Diego Bowl Association is one of four organizations that conducts two bowl games per year, but it paid Binkowski $283,095 last year, ranking near the bottom of the scale.
The Kraft Fight Hunger Bowl's executive director, Gary Cavalli, had his pay ($375,176) determined after his board reviewed data on pay, "specifically the annual salary surveys of the Football Bowl Association," according to the bowl's tax form.
The CEO of the Alamo Bowl, Derrick Fox, made $461,248 last year.
"We do find the survey to be very helpful," says Randy Cain, the volunteer chairman of the Alamo Bowl's board. "We make sure we're within bounds of that."
It's a free-market approach to setting salaries. But critics say that's a problem when the businesses they operate are nonprofits that require subsidies from nonprofit universities and conferences.
"Under the guise of free-market economics, many people in the college-sport enterprise are compensated very handsomely," Southall says. "This, in and of itself, is not bad, but the (bowl) system is a false free-market economy," in large part because schools often subsidize the bowls by paying for unsold tickets.
The Fiesta Bowl scandal
In 2010, the Internal Revenue Service received a complaint about the bowl business from Playoff PAC, a group that advocates for a college football playoff. The complaint cited the Fiesta Bowl's contributions to political candidates and the "inflated" pay for bowl executives, including then-Fiesta Bowl bowl executive John Junker, who made around $600,000 in 2009.
"Because these pay arrangements lack any defensible rationale, they are a legally troublesome use of charitable funds," the complaint said.
Junker pleaded guilty to a felony related to the campaign contribution scheme.
But nobody was convicted of being paid too much. The Arizona Attorney General's office, which prosecuted the Fiesta Bowl case, said its investigation focused on campaign contributions, not salaries.
Of the 35 bowl games, 26 are operated by nonprofits, and nine are for-profit, including seven owned by ESPN Regional Television. IRS rules prohibit charities from being used for private enrichment. Instead, the rules call for nonprofit CEOs to receive "reasonable compensation" — a standard that's difficult to define.
The bowl pay list compiled by USA TODAY Sports does not include the nine for-profit bowls whose salary information is private. It includes 15 nonprofit tax-exempt bowl organizations whose salaries are publicly accessible and that have existed for at least 10 years.
Waters says that comparing bowl salaries is flawed because no two jobs are the same. Some bowl executives receive part of their pay from related nonprofit organizations that support the bowl and surrounding events. Many also receive pay in the form of performance bonuses, including McVay, who made $256,000 in bonuses in 2010-11.
Pay to play?
Bowl executives put on their big events around the holidays, with most of their $413 million in combined revenues last season coming from ticket sales, television rights and sponsorships, according to an audit by NCAA.
About 70% of their revenues flows to the conferences in payouts: $290 million last season, with every conference collecting more from the bowls in payouts than they spent to participate in them. But that league "profit" doesn't always trickle down to the participating schools because of the costs of unsold tickets and revenue-sharing with other league members, including those that fail to earn bowl berths.
To play in a bowl game, teams and their conferences agree to buy a pre-arranged allotment of tickets for the game. In last season's Outback Bowl, Michigan State and Georgia each were required to buy about 12,000 tickets. Michigan State and the Big Ten only resold 4,736 and had to take a loss of $528,000 on the rest. Georgia did better, selling 9,156 of those tickets, but the Bulldogs still had to eat the rest at a loss of $274,000, according to documents obtained by USA TODAY Sports.
Many participating schools lose money on bowl trips because of this, such as when UConn reported losing $1.7 million on its Fiesta Bowl trip in 2011. NCAA documents show that the 70 bowl teams in 2010-11, the most recent year available, exceeded their expense allowances by an average of $169,226, largely due to unsold ticket costs.
Waters says this problem is the fault of the conferences' revenue-sharing formulas, not the bowls.
The bowls also stress that they serve their regions in more ways than hosting a game. They attract tens of millions of dollars with fans coming in to fill hotel rooms, eat at local restaurants and spend money.
Given the logistics involved in staging the game, plus the other events many bowl organizations host throughout the year, Waters chuckles when he hears people say bowl bosses only work one week out of 52.
"I've heard that a few times since I got here," he says. "I know they do work because with 35 of them, there's at least three or four issues I've got to deal with every day. So they are working all year."
| The compensation packages for college football bowl game executives for fiscal year 2010, filed last year or this year and compiled by USA TODAY Sports. All are non-profit tax-exempt organizations. | ||
| Bowl | CEO | Compensation |
| Outback Bowl | Jim McVay | $753,946 |
| Sugar | Paul Hoolahan | $634,586 |
| Chick-fil-A | Gary Stokan | $627,909 |
| Fiesta, Insight | John Junker* | $587,216 |
| Rose | Scott McKibben | $562,149 |
| Cotton | Rick Baker | $502,674 |
| Orange | Eric Poms | $492,535 |
| Alamo | Derrick Fox | $461,248 |
| Gator | Richard Catlett | $398,382 |
| Kraft Fight Hunger | Gary Cavalli | $375,176 |
| Music City | Scott Ramsey | $310,715 |
| Capital One, Champ Sports | Steve Hogan | $295,298 |
| Holiday, Poinsettia | Bruce Binkowski | $283,095 |
| Belk | Will Webb** | $198,622 |
| Sun | Bernie Olivas | $170,423 |
| Military | Stephen Beck | $156,471 |
| Independence | Missy Setters | $116,362 |
| Junker was fired last year and since has pleaded guilty to a felony related to illegal campaign contributions; Webb receives half of his pay for also operating the Atlantic Coast Conference championship game. |
||
| Note: Compensation includes bonuses and other benefits reported on the organization's tax forms. Some executives receive part of their compensation from organizations related the bowl games and surrounding events. For example, the Atlanta Metro Chamber of Commerce provides management for the Chick-fil-A Bowl. | ||
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USA Today NCAA FOOTBALL
Trips to BCS bowl games can cost some schools big money
By Craig Harris, The Arizona Republic
By Jonathan Brownfield, US Presswire
Virginia Tech, which receives millions of dollars in public funding like many other college sports programs, would have lost even more money had the Atlantic Coast Conference not spent nearly $1.2 million to help. The team, required to buy a block of tickets as a condition of being in the bowl, was unable to resell all of them before game time; the school's conference bought out 9,500 remaining seats.
Going in the red has become more common for universities participating in the Bowl Championship Series, college football's five biggest postseason games: the Fiesta, Orange, Rose and Sugar bowls, plus the national title game that the four bowls rotate annually.
The Republic obtained records from the NCAA that disclosed aggregate spending figures for the past three years of all public and private schools that played in BCS bowls. The records did not reveal individual universities' expenses, but averaged those expenses and the allowances that the universities received from their conferences.
Those averages, calculated by the NCAA, showed that in all three years, average expenses exceeded average allowances, meaning schools often lost money.
The Republic separately obtained records from individual public universities that played in BCS bowls for the past six years to determine, on an individual basis, how many schools lost money. Records dating beyond six years were incomplete. The Republic's analysis showed that 41 percent of public universities playing in BCS games reported losses. The figure would have jumped to 50 percent had conferences not absorbed some of their universities' bowl expenses.
Long term, any school playing in a BCS bowl is likely to at least break even. Its conference shares the proceeds from a bowl with all conference schools, so even if a school loses money playing in a bowl, it will get payout money in subsequent years even if it does not go to a bowl.
The five bowl games generate millions of dollars from ticket sales, sponsorships and television contracts. Much of that money - nearly 80 percent last year - is handed over to six major conferences that created the championship system: the Atlantic Coast, Big East, Big Ten, Big 12, Pac-12 and Southeastern.
Those conferences give each bowl-bound school a travel allotment of about $2 million, then distribute much of the remainder among all of their member schools.
Theoretically, a school that spends more than its travel allotment is likely to make up the loss with bowl money it receives in later years. Read more...http://usatoday30.
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Along with a 40-12 drubbing from Stanford, Virginia Tech's athletic department reported a $421,046 loss. The cost to play in the Orange Bowl, largely based on terms set by the Bowl Championship Series, outstripped the amount of bowl money the team received.Virginia Tech, which receives millions of dollars in public funding like many other college sports programs, would have lost even more money had the Atlantic Coast Conference not spent nearly $1.2 million to help. The team, required to buy a block of tickets as a condition of being in the bowl, was unable to resell all of them before game time; the school's conference bought out 9,500 remaining seats.
Going in the red has become more common for universities participating in the Bowl Championship Series, college football's five biggest postseason games: the Fiesta, Orange, Rose and Sugar bowls, plus the national title game that the four bowls rotate annually.
The Republic obtained records from the NCAA that disclosed aggregate spending figures for the past three years of all public and private schools that played in BCS bowls. The records did not reveal individual universities' expenses, but averaged those expenses and the allowances that the universities received from their conferences.
Those averages, calculated by the NCAA, showed that in all three years, average expenses exceeded average allowances, meaning schools often lost money.
The Republic separately obtained records from individual public universities that played in BCS bowls for the past six years to determine, on an individual basis, how many schools lost money. Records dating beyond six years were incomplete. The Republic's analysis showed that 41 percent of public universities playing in BCS games reported losses. The figure would have jumped to 50 percent had conferences not absorbed some of their universities' bowl expenses.
Long term, any school playing in a BCS bowl is likely to at least break even. Its conference shares the proceeds from a bowl with all conference schools, so even if a school loses money playing in a bowl, it will get payout money in subsequent years even if it does not go to a bowl.
The five bowl games generate millions of dollars from ticket sales, sponsorships and television contracts. Much of that money - nearly 80 percent last year - is handed over to six major conferences that created the championship system: the Atlantic Coast, Big East, Big Ten, Big 12, Pac-12 and Southeastern.
Those conferences give each bowl-bound school a travel allotment of about $2 million, then distribute much of the remainder among all of their member schools.
Theoretically, a school that spends more than its travel allotment is likely to make up the loss with bowl money it receives in later years. Read more...http://usatoday30.
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How much money does each college bowl game give to the two schools?
How much money does each college bowl game give to the two schools?
View Slide Show
Answer:
It varies depending on the bowl game.
Between 2007-2010, the five BCS bowl games (Fiesta, Orange, Sugar, Rose,
and National Championship) are each scheduled to have payouts of $17
million. The Cotton Bowl has a payout of $3 million, Gator Bowl $2.5
million, and Capital One $4.25 million. The smaller bowl games have
smaller payouts, like the GMAC Bowl at $750,000, Emerald Nuts Bowl at
$850,000, and Papa John's Bowl at $300,000.
http://www.
The BCS' Big Split
The Bowl Championship Series will distribute
$142.5 million of revenue from its five bowl games, with 81 percent of
it — $115.2 million — going to the big six conferences.
The majority of the rest — $24 million — goes to the coalition conferences: Mountain West, Western Athletic, Conference USA, Mid-American and Sun Belt. Notre Dame, as an independent member of the BCS, takes $1.3 million.
Sound a little uneven? Not really, says BCS Executive Director Bill Hancock. Schools from those big six conferences accounted for eight of the 10 teams in the BCS bowls, so those conferences should take roughly 80 percent of the total payout.
“It’s a fair and appropriate distribution of the revenue,” Hancock said.
The distribution is based on a formula created in 2004 by the BCS commissioners and approved by the BCS Presidential Oversight Committee. The revenue distribution has varied little over the four years of the most recent media contract with Fox, which pays an average of $82.5 million annually. The media deal accounts for most of the revenue, while the rest comes from revenue generated by the Sugar, Rose, Fiesta and Orange bowls, and the national championship game.
Starting next year, the payouts will be even more, thanks to a new four-year rights-fee deal with ESPN that will average $125 million a year, all of which is distributed to the schools.
The money is paid annually by an escrow agent, Heartland Bank of Leawood, Kan., and each year’s distribution completely empties the account, Hancock said, meaning all of the revenue is distributed.
But wherever the BCS
goes, controversy is sure to follow and it’s no different when it comes to distributing the revenue. Not everyone agrees with the BCS’ method of dispersing funds, mostly those from the coalition conferences.
It’s really a question of value, says WAC Commissioner Karl Benson. When a Utah shocks an Alabama or a Boise State stuns an Oklahoma, doesn’t that demonstrate the value of those teams and conferences to the BCS? Shouldn’t the payout to the conferences like the WAC and the Mountain West that send teams to the BCS look like the payout to the big six conferences?
No, responds Harvey Perlman, chancellor at the University of Nebraska and chairman of the BCS Presidential Oversight Committee. He says there’s a difference between playing well in a game and demonstrating the kind of value that drives long-term media contracts.
“Those teams have certainly performed well, but you’re talking about adding value,” Perlman said. “The real question is whether including those conferences when you negotiate a TV contract adds to the willingness of the network to increase the bid. I don’t think we’ve seen evidence that that’s true.”
The BCS’ tie-ins with its bowls and the traditional strength of the
big six conferences are what drive the value of the property, Perlman
said, “not an individual team or performance.”
This year’s Fiesta Bowl pitting coalition conference members TCU and Boise State on Fox drew an 8.2 rating, which is less than the 10.4 Ohio State and Texas got in the Fiesta Bowl the previous year. Both games were played on a Monday night. TCU-Boise State generated the second-highest rating of the three BCS bowls on Fox this year, just behind the Sugar (8.5) and well ahead of the Orange (6.8), both of which featured teams from the big six conferences.
The Fiesta’s attendance of 73,227 was higher than the previous two Fiesta Bowls, which again featured teams from the big six conferences.
“When given the opportunity, we’ve shown that these teams deliver,” the WAC’s Benson said. “We believe that teams like Boise State and TCU have become an important piece to the BCS.”
In breaking down the revenue distributed by the BCS, the Big Ten and the Southeastern Conference are the big winners. Each league put two teams — Ohio State and Iowa from the Big Ten; Alabama and Florida from the SEC — into BCS bowls, meaning those two football-mad leagues will each receive $22.2 million.
The other leagues that qualify automatically into the BCS — the ACC, Big 12, Big East and Pac-10 — each receive $17.7 million, accounting for $115.2 million to be distributed among the big six conferences’ 65 schools. Conferences typically share their BCS and other bowl revenue evenly, although the Big 12 is an exception and pays more to the bowl teams.
A bonus of $4.5 million is paid for each additional team that makes a BCS bowl, which is why the SEC and Big Ten made more this year.
“When you talk about adding value, from a media standpoint, the Boise States and the Utahs add very little,” said Barry Frank, a media consultant from IMG who worked with the BCS on its new TV deal with ESPN. “They’re not population centers. And speaking from a personal standpoint, in football terms, I can tell you that networks look at them as ‘Johnny-come-latelies’ to the national scene that don’t play the kind of schedules that major conferences play.”
A total of $24 million goes to the five coalition conferences from the BCS this year. There’s a $9.75 million payout that’s automatic each year, another $9.75 million because TCU earned an automatic berth into the BCS based on its ranking, and another $4.5 million for the inclusion of a second team from the coalition, Boise State.
Once the BCS pays the $24 million to the coalition conferences, it washes its hands of the distribution. The breakdown of that money among the five conferences, which account for 50 schools, is determined by a complicated distribution method that the coalition leagues voted on four years ago.
The Mountain West will receive $9.8 million, while the WAC takes
$7.8 million and the rest goes to Conference USA ($2.8 million), the
MAC ($2.1 million) and the Sun Belt ($1.5 million). TCU is a member of
the Mountain West, while Boise State is in the WAC.
As the BCS moves into a new media contract with ESPN, those five coalition conferences will review and possibly change their distribution. What’s not known — and Mountain West Commissioner Craig Thompson won’t talk about it — is how vigorously the MWC will move for a new distribution system that pays more to the coalition conferences that send teams to a BCS bowl. Thompson wouldn’t comment on his plans.
There’s another scenario in play that could greatly enhance the MWC’s status and perhaps move it onto the same level with the other big six conferences that receive automatic berths into the BCS.
The Mountain West is two years into a four-year evaluation period that measures conference power. It’s based on the strength of the league champion, how many teams are rated in the BCS top 25 and average ranking for the entire conference.
The BCS has not fully divulged what thresholds must be met for the MWC to gain an automatic qualifying berth, which makes the whole process sound eerily like joining a fraternity. But if the MWC could join the big six club, membership would have its privileges and its annual BCS revenue would likely double.
“We look at consistency over time,” Nebraska’s Perlman said. “Looking forward, I don’t know that they change the equation, but certainly their performance over time makes it difficult to not look at them.”
Return to top
The majority of the rest — $24 million — goes to the coalition conferences: Mountain West, Western Athletic, Conference USA, Mid-American and Sun Belt. Notre Dame, as an independent member of the BCS, takes $1.3 million.
Sound a little uneven? Not really, says BCS Executive Director Bill Hancock. Schools from those big six conferences accounted for eight of the 10 teams in the BCS bowls, so those conferences should take roughly 80 percent of the total payout.
(Top) National champ Alabama, with help from
fellow SEC power Florida, secured $22.2 million
for the conference.
(Bottom) Boise State of the WAC won its second
BCS bowl in four years. The conference gets
$7.8 million this year.
fellow SEC power Florida, secured $22.2 million
for the conference.
(Bottom) Boise State of the WAC won its second
BCS bowl in four years. The conference gets
$7.8 million this year.
The distribution is based on a formula created in 2004 by the BCS commissioners and approved by the BCS Presidential Oversight Committee. The revenue distribution has varied little over the four years of the most recent media contract with Fox, which pays an average of $82.5 million annually. The media deal accounts for most of the revenue, while the rest comes from revenue generated by the Sugar, Rose, Fiesta and Orange bowls, and the national championship game.
Starting next year, the payouts will be even more, thanks to a new four-year rights-fee deal with ESPN that will average $125 million a year, all of which is distributed to the schools.
The money is paid annually by an escrow agent, Heartland Bank of Leawood, Kan., and each year’s distribution completely empties the account, Hancock said, meaning all of the revenue is distributed.
goes, controversy is sure to follow and it’s no different when it comes to distributing the revenue. Not everyone agrees with the BCS’ method of dispersing funds, mostly those from the coalition conferences.
It’s really a question of value, says WAC Commissioner Karl Benson. When a Utah shocks an Alabama or a Boise State stuns an Oklahoma, doesn’t that demonstrate the value of those teams and conferences to the BCS? Shouldn’t the payout to the conferences like the WAC and the Mountain West that send teams to the BCS look like the payout to the big six conferences?
No, responds Harvey Perlman, chancellor at the University of Nebraska and chairman of the BCS Presidential Oversight Committee. He says there’s a difference between playing well in a game and demonstrating the kind of value that drives long-term media contracts.
“Those teams have certainly performed well, but you’re talking about adding value,” Perlman said. “The real question is whether including those conferences when you negotiate a TV contract adds to the willingness of the network to increase the bid. I don’t think we’ve seen evidence that that’s true.”
2010 BCS Payouts
|
|
| Big Six conferences | |
| SEC |
$22.2 million
|
| Big Ten |
$22.2 million
|
| ACC |
$17.7 million
|
| Big East |
$17.7 million
|
| Big 12 |
$17.7 million
|
| Pac-10 |
$17.7 million
|
| Total |
$115.2 million
|
| Non-Big Six conferences | |
| Mountain West |
$9.8 million
|
| Western Athletic |
$7.8 million
|
| Conference USA |
$2.8 million
|
| Mid-American |
$2.1 million
|
| Sun Belt |
$1.5 million
|
| Total |
$24 million
|
| Other recipients | |
| FCS conferences |
$1.8 million
|
| Notre Dame |
$1.3 million
|
| Army |
$100,000
|
| Navy |
$100,000
|
| Total revenue distribution |
$142.5 million
|
Notes:
 Each of the big six conferences is allotted an automatic qualifier in a BCS bowl, accounting for six of the 10 BCS berths. The SEC and Big Ten placed two teams in BCS bowls, which earned them an additional $4.5 million each.
A total of $24 million is distributed among the Mountain West, WAC,
Conference USA, MAC and Sun Belt. About $4.7 million is shared evenly,
while the rest is paid based on a performance formula, agreed to by the
five non-automatic qualifying conferences. The Mountain West gets $6
million because TCU was an automatic qualifier into the Fiesta Bowl,
while the WAC gets $4.5 million for placing a second team from this
group in the BCS.
Notre Dame gets its share each year, and in years when it makes a BCS bowl, it receives an additional $4.5 million.
The revenue is derived from the BCS’ $83 million-a-year media contract
with Fox and bowl payouts. Next season, the BCS’ new contract with ESPN
will increase to $125 million a year.
The big six conferences represent 65 schools, while the other five non-big-six conferences represent 50 schools.Sources: BCS and the conferences |
|
This year’s Fiesta Bowl pitting coalition conference members TCU and Boise State on Fox drew an 8.2 rating, which is less than the 10.4 Ohio State and Texas got in the Fiesta Bowl the previous year. Both games were played on a Monday night. TCU-Boise State generated the second-highest rating of the three BCS bowls on Fox this year, just behind the Sugar (8.5) and well ahead of the Orange (6.8), both of which featured teams from the big six conferences.
The Fiesta’s attendance of 73,227 was higher than the previous two Fiesta Bowls, which again featured teams from the big six conferences.
“When given the opportunity, we’ve shown that these teams deliver,” the WAC’s Benson said. “We believe that teams like Boise State and TCU have become an important piece to the BCS.”
In breaking down the revenue distributed by the BCS, the Big Ten and the Southeastern Conference are the big winners. Each league put two teams — Ohio State and Iowa from the Big Ten; Alabama and Florida from the SEC — into BCS bowls, meaning those two football-mad leagues will each receive $22.2 million.
The other leagues that qualify automatically into the BCS — the ACC, Big 12, Big East and Pac-10 — each receive $17.7 million, accounting for $115.2 million to be distributed among the big six conferences’ 65 schools. Conferences typically share their BCS and other bowl revenue evenly, although the Big 12 is an exception and pays more to the bowl teams.
A bonus of $4.5 million is paid for each additional team that makes a BCS bowl, which is why the SEC and Big Ten made more this year.
“When you talk about adding value, from a media standpoint, the Boise States and the Utahs add very little,” said Barry Frank, a media consultant from IMG who worked with the BCS on its new TV deal with ESPN. “They’re not population centers. And speaking from a personal standpoint, in football terms, I can tell you that networks look at them as ‘Johnny-come-latelies’ to the national scene that don’t play the kind of schedules that major conferences play.”
A total of $24 million goes to the five coalition conferences from the BCS this year. There’s a $9.75 million payout that’s automatic each year, another $9.75 million because TCU earned an automatic berth into the BCS based on its ranking, and another $4.5 million for the inclusion of a second team from the coalition, Boise State.
Once the BCS pays the $24 million to the coalition conferences, it washes its hands of the distribution. The breakdown of that money among the five conferences, which account for 50 schools, is determined by a complicated distribution method that the coalition leagues voted on four years ago.
Boise State and TCU became the first pair of non-
big-six teams to make the BCS in the same year.
big-six teams to make the BCS in the same year.
As the BCS moves into a new media contract with ESPN, those five coalition conferences will review and possibly change their distribution. What’s not known — and Mountain West Commissioner Craig Thompson won’t talk about it — is how vigorously the MWC will move for a new distribution system that pays more to the coalition conferences that send teams to a BCS bowl. Thompson wouldn’t comment on his plans.
There’s another scenario in play that could greatly enhance the MWC’s status and perhaps move it onto the same level with the other big six conferences that receive automatic berths into the BCS.
The Mountain West is two years into a four-year evaluation period that measures conference power. It’s based on the strength of the league champion, how many teams are rated in the BCS top 25 and average ranking for the entire conference.
The BCS has not fully divulged what thresholds must be met for the MWC to gain an automatic qualifying berth, which makes the whole process sound eerily like joining a fraternity. But if the MWC could join the big six club, membership would have its privileges and its annual BCS revenue would likely double.
“We look at consistency over time,” Nebraska’s Perlman said. “Looking forward, I don’t know that they change the equation, but certainly their performance over time makes it difficult to not look at them.”
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