In September, Marcus Owens, the former head of the IRS's Exempt Organizations Division who is working with the lobbying group Playoff PAC, asked the IRS to review the nonprofit status of three BCS bowl games because of "excessive compensation." Junker and the Fiesta Bowl, which will run this year's BCS title game, are also under investigation by the Arizona attorney general's office. In December 2009, five former or current Fiesta Bowl employees told The Arizona Republic they were instructed by Junker to donate money to certain political candidates, to be reimbursed in the form of merit pay, which would be a violation of state and federal laws. Junker and the Fiesta Bowl have denied those accusations. The Republic also reported that the bowl spent more than $4 million since 2000 to curry favor from BCS bigwigs and elected officials—including almost $400,000 for its '08 Fiesta Frolic, a golf-intensive gathering of ADs and head coaches.
Of the 120 athletic departments that play I-A football, 106 lost money in 2009, according to an NCAA report. Budget shortfalls forced the University of California in September to cut five sports. Virginia hit up students for $11.9 million in fees for the 2008--09 school year to offset athletic department operating expenses. Cincinnati reached two consecutive BCS bowls and still found itself $24 million in debt. All over the country, schools are turning to student fees, academic funds and taxpayer support to balance the athletic department's books, which helps explain the uptick in so-called pay games (Hey, LSU, good luck this Saturday against Louisiana-Monroe!), conference realignments and expansion of the men's basketball tournament.
In the teeth of the worst economic downturn in several generations, it stands to reason that university presidents might look favorably on ideas that could dramatically raise revenue. Speaking to Congress in 2005, no less staunch a playoff opponent than Big Ten commissioner Jim Delany estimated that "an NFL-style football playoff would generate three or four times" more than "the current system does." That could mean an estimated $700 million to $800 million annually to be distributed among the I-A conferences.
Not only are the I-A presidents leaving hundreds of millions of dollars on the table by forgoing a playoff, but by outsourcing their most lucrative product (postseason football), they're also handing over more than half the profits—money that could replace tax dollars in the balancing of public schools' athletic department budgets. Think about it: The NFL and its teams collect every penny of revenue, from television to tickets to parking to popcorn. In college football the bowl games grab the biggest pork chop—and then help themselves to a few more, often more than 50% of a game's revenue. (The 2007 Chick-fil-A Bowl generated $12.3 million in revenue but paid out just $5.9 million total to the participating schools, Auburn and Clemson.) They do it by thinking of every conceivable way to profit from their supposed partners.
Ask Iowa. Halftime entertainment at the Jan. 1, 2009, Outback Bowl was provided by the Hawkeye Marching Band. And how did the Tampa Bay Bowl Association, which runs the game, thank the band for that gratis performance? By charging the university $65 a head for each of the 346 band members. According to university records submitted to the NCAA, the school was forced to purchase face-value tickets totaling $22,490 for the band, even though the game wasn't sold out.
Very few bowls do, in fact, sell out. Aware of this, their directors require a ticket commitment, which obligates the purchase of thousands of tickets at face value. Schools must then resell those tickets or risk losses that can run into seven figures. Before Internet ticket sites democratized the market, the deal made sense to the participating schools. Now, for all but the biggest games, fans can avoid paying full price—as they must when they go through the school's ticket office. Tickets to the 2009 Music City Bowl were available on StubHub for 19 cents.
The commitment guarantees only one thing: the fattening of the bowls' profit margins. For their appearance in the 2009 Orange Bowl, Virginia Tech and the ACC agreed to purchase 17,500 tickets at $125 per seat, but they could sell only 3,342, according to university documents. The result: a $1.77 million bath for the school, not the bowl.
Ohio State ate $1.01 million in unsold tickets at the 2009 Fiesta Bowl. Smaller bowls do similar damage to schools thrilled by a mere invitation. The euphoria of playing in the postseason quickly wore off for Western Michigan two years ago when the Broncos' athletic department was able to unload only 548 of the 11,000 tickets it was required to purchase by the good folks at the Texas Bowl. Western Michigan's loss of $462,535 (before adding in travel and lodging costs) probably hurt more than its subsequent 38--14 defeat at the hands of Rice.
Paying full price for unused seats in half-filled stadiums is just one of the ways bowls stick it to desperate universities, like unscrupulous undertakers who see that their clients are compromised and turn the screws. Preoccupied with perception, recruiting and job security, athletic department officials are in a poor bargaining position. They tend to agree to anything. Like paying $65 a head for the band.
Yes, you may be saying to yourself, but what about the big bowls, the major BCS games like the Fiesta, Rose, Sugar and Orange bowls? Surely the teams who play in those get lucrative bowl payouts? And, in fact, Ohio State earned $18.5 million for making it to the Rose Bowl in January 2010. That's a serious boost to any team's bottom line.