Fan passion and spending are the engine that drives college football’s ever-more-powerful financial machine.
Revenues – from broadcasting rights, advertising and ticket sales – are predicted to grow exponentially in coming years.
Provided that the fan frenzy continues, that promises ever-more money to participating university athletic departments – including the University of Oregon’s – and helps pay some seven-figure salaries to the executives who arrange and oversee the games.
Think those tickets for Monday’s championship game between Oregon and Ohio State are too expensive?
The price is set by CFP Administration LLC, the new limited liability corporation formed to administer the College Football Playoff, the collective of the 10 Football Bowl Subdivision conferences (including the Pac-12, of which Oregon is a member, and the Big Ten to which Ohio State belongs) and the University of Notre Dame, which does not belong to a conference.
The College Football Playoff replaced the old Bowl Championship Series system, but it operates on much the same administrative model.
Participating universities control each conference, and the conferences jointly control the entity that runs the semifinals and championship game.
Eventually, after CFP Administration and conference salaries and other expenses are deducted, the conference and playoff system feeds revenues back to the schools’ athletic departments through each conference.
For the current fiscal year, the UO athletic department has budgeted to receive $21.8 million from the Pac-12 conference, including television revenue, bowl revenue and other event revenue, UO spokesman Craig Pintens said. That’s up from the $19.8 million it received from the Pac-12 two years previously.
Top CFP official Bill Hancock said the salaries of CFP officials, including his own, are not disclosed. But salaries of conference executives are public, and they have been criticized because of their escalating size.
The new CFP system promises to be more lucrative for the conferences in large part because of a new TV deal, in which ESPN reportedly has promised $7.3 billion over 12 years for rights to televise the semifinals and finals. That’s an average of more than $600 million a year.
The new system will make a base annual payment to each of the so-called Power 5 conferences – the Southeastern, Atlantic Coast, Pac-12, Big 12 and Big Ten – of about $50 million, up sharply from about $28 million under last season’s BCS system, The New York Times has reported.
In the Pac-12, that $50 million will be distributed equally among the schools. Any conference with a team picked for the semifinals will receive an additional $6 million, according to the “revenue distribution” model on the CFP’s website.
Thus, because of Oregon’s appearance in the Rose Bowl, the Pac-12 gets that extra money this year to distribute to its schools.
The College Football Playoff revenue to the conferences supplements other broadcasting rights, advertising and ticket revenue that each conference pulls in and distributes to its schools. On top of that, each school generates additional football revenue for itself independently.
According to the Pac-12’s most recently available tax filings, for the 2012-13 fiscal year, the Pac-12 conference had $329 million in revenue, mostly from TV contracts. After paying staff expenses and other costs, the Pac-12 had $228 million left that it paid out to its 12 member schools, including $19.8 million to the UO, according to the filings.
Pac-12 expenses are significant. They include $29.4 million in salaries for staff for the 2012-13 fiscal year and $75 million for other costs.
The highest-paid Pac-12 executive is Commissioner Larry Scott, who was paid $3.3 million in total compensation for the 2012-13 fiscal year, according to the tax filing. Gary Stevenson, president at the time, received $1.3 million in total compensation. Nine other staff executives were paid salaries and other compensation that averaged $505,000.
Unlike the private CFP Administration LLC, the conference organizations are registered nonprofit groups, so they must disclose salary details. The salaries have drawn the ire of some who consider them exorbitant.
Defenders say the pay is justified given the complexity of managing the lucrative events.
Spurring it all is fan enthusiasm.
The inaugural two semifinal games on Jan. 1, this year the Rose and Sugar bowls, each had an average TV audience of 28.2 million viewers on ESPN, The Associated Press reported. That made them the highest-rated shows in cable TV history.
— With Christian Wihtol