College Football: Why Pressure to Win Is So Big
Senior Editor, CNBC
The regular college football season wraps up on Saturday, but the biggest buzz in recent weeks has been the dizzying number of teams switching conferences.
Higher profile schools like West Virginia, Missouri and Syracuse are changing to bigger conferences, while even lower-tier programs like San Diego State, Temple and Houston are joining the rush.
Why the move? Simply put, it's the money.
More than 30 colleges have switched conferences since May of 2011 and the big reason is the cash and exposure from college football television networks. For a cash strapped school like the University of Maryland, leaving the ACC for the larger Big Ten means bigger money—some $15-20 million a year extra.
If fans are lost on who's moving where, and as old rivalries die, it may be reflected in attendance. This year, game attendance was down some 2 percent from 2011's record year.
But the biggest impact of conference switching, say analysts, is the overwhelming pressure to win—to win now and win big.
"It's the new economics of the the power conferences with all this re-alignment," said Mark Conrad, who teaches sports business at Fordham University. "Coaches will have a much shorter leash when it comes to winning."
Conrad noted that Auburn football coach Gene Chizik was fired last month after a 3-9 season this year— but just two years removed from winning a national championship.
"These coaches are going to be gone much sooner than in the past if they don't win and they'll be under so much pressure to recruit the best players, and the players will have to perform well," Conrad added. "The competition is going to be fierce."
The money and power associated with college football is enormous. The combined revenue for the 15 richest college football programs topped $1 billion in 2010—with the University of Texas at the head of the list taking in $95.7 million.
And even lesser football powers benefit. For example, every school in the Big Ten, like Iowa and Indiana, will reportedly receive some $25 million this year—topping the $22.8 million they got in 2011. And about $8 million of the $25 million comes from the Big Ten Network, which televises each conference game on cable outlets across the country.
Though re-aligning is nothing new its history shows how money and TV are tied together. Analysts point to the Supreme Court decision in 1984 that allowed colleges to form their own television networks without NCAA approval, and it slowly started the switching in and out as the growing pot of money became an enticement.
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And this recent overwhelming rush to jump conferences primarily comes from the current crush of college football television networks—and contracts with ESPN. Nearly every major and minor college football conference resigned or signed a new television deal in the last five years. The Pac 12's new TV deal is expected to pay each member some $22 million a year for the next five years.
That kind of money has left deals like the five year $38 million contract Notre Dame signed with NBC in 1991, pretty much in the dust, say experts.
"These universities are looking beyond tradition and into markets where they are more likely to have alumni and more eyeballs on television sets and get more revenue from TV and sources like mobile and tablet platforms," said Exavier Pope, an entertainment and sports attorney and principal owner of The Pope Firm.
While there is the money, there's something else when it comes to re-alignment, said Robert Boland, professor at NYU at the Tisch Center for Hospitality, Tourism and Sports. That's the cache for a college moving to a conference with a higher profile in sports and academics.
"Schools can increase their own perception with a new conference," Boland said. "Boston College liked being associated with Duke and North Carolina in the ACC. It's a chance to be associated with upper echelon schools."
But with all the money and prestige comes an arms race, say analysts. As more money comes in more has to be spent on upgrading facilities and coaches salaries.
It cost Auburn University $11 million to fire Chizik and his assistant coaches as part of a buyout. And they'll have to pay something close to that for a new coaching staff for next year. Maryland has to pay the ACC a $50 million fee to leave.
And as teams are expected to play in better conferences, the question is will they be as good as their new rivals.
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"The level of play could suffer from this," Mark Conrad said. "Many of the colleges that switched conferences might not be able to compete with some of the better college teams. They will be outclassed for years."
Also suffering in the realignment as teams move, are the lesser regarded conferences, said Exavier Pope.
"The big winners in all this are the Big Ten, Pac 12 and SEC," said Pope. "But other conferences are regulated to a secondary status and trying to catch up. For instance the Big East is replacing stronger members who left with weaker ones and they (Big East) will likely get surpassed by a conference like the MAC."
Despite the concerns over which college team can hold its own and how much it may cost to keep or fire a coach—and whether a team like San Diego State will enjoy the cross country trip to play Connecticut—the college football re-alignment bubble won't burst anytime soon.
In fact in may just be getting started, said Robert Boland.
"This isn't even close to reaching a saturation point," Boland said. "Right now, all the money suggests it's going to keep happening for a long time."