The 2015 SEC revenue shares were announced this morning, and it begs the question, “Is money the root of all success in college football?”
It’s often said that championships are won in the offseason. The SEC is certainly doing their part to try and prove that adage correct. The conference announced today at its annual meetings a total distribution of approximately $455.8 million to the 14 member institutions. For you non-Vanderbilt graduates, that’s roughly $31.2 million per school. Just for comparison sake, the total conference payout is greater than the Gross Domestic Product (GDP) of seven nations. But what does this mean in a practical sense? How does the conference translate financial success into on-the-field success?
Separating from the pack
The most important implication is the gap between the SEC (and the Big Ten) and the other conferences. The Big Ten is expected to distribute revenues similar to the SEC this year, but the PAC-12, Big 12 and ACC are all expected to be $10 million behind the SEC and Big Ten. So for everything that the $31.2 million gets for an SEC school, that will be about 50% more than the schools in the three of the four other Power Five conferences.
The SEC Network is less than a year old and is already contributing money to the revenue distribution in totals much higher than expected. With the quality and quantity of advertisements still low, the earning potential for the network is still not close to being fully realized. We’ll get back to the SEC Network later.
Now start compounding this $10 million gap over two, three, five, ten years. At this current pace, SEC and Big Ten schools will make $100 million more than their PAC-12/ACC/Big 12 counterparts over the next ten-year span. That will clearly separate those two conferences from the others. At the current rates of earning, it will become increasingly hard for those institutions to keep up with the SEC and Big Ten schools in all of the below areas.
Coaches
Coaches matter to schools and money matters to coaches. But there’s only one head coach at each school and if a fair market exists, the coaching salaries should be fairly equal. Obviously, the schools that bring in the most can pay their coaches more, but in times of fiscal restraint in many states, it would be hard to justify paying a coach a salary that’s completely askew from the rest of the market.
Where it does matter, however, is with assistant coaches. If you took that $31 million and distributed it just among your assistants you would be giving each of them about a $2.75 million raise. With the hiring of Will Muschamp at Auburn and John Chavis at Texas A&M, it doesn’t take a professional palm reader to see the upcoming arms race for quality assistant coaches.
In addition to hiring and retaining high quality assistants, it will also become harder for second-tier schools to lure away big name coordinators for a head coaching vacancy. Particularly when that top-tier coordinator looks into the future and sees the growing financial gap between two of the Power Five conferences. It’s the assistant coaches where this gap will really make a difference in the future.
Facilities
We’ve said this many times before. In today’s recruiting, kids are losing regional affinity for teams and are more interested in the branding and potential for future development. Facilities are a key part of each recruit’s experience.
Indoor practice facility?
State of the art stadium that networks love coming to?
Full service nutritional area for student-athletes?
Physical therapy and fitness area?
Blinged-out weight room?
Barber shop?
If you want the top recruits you best be saying “check” after each one of these things. And they better not be old. Look, this recruit is only going to be here four or five years. He doesn’t want to see the new indoor practice facility being built during his junior and senior year. When you’re getting $30+ million a year you can keep up with your facilities. When you’re getting less than 60% of that, you can’t.
Recruiting
Back to recruiting. Each school has a budget, and with regional affinities disappearing in the recruiting process, coaches and assistants need to be able to travel, and travel a lot. Satellite Camps? That costs money, too. Recruiting material like pamphlets, letters, videos and phone bills also cost money. It’s simple math. If your school is making 50% more than 36 of your competitors, you are going to be able to do all those things at 50% more capacity.
Competitive Edge
The real winners from today’s announcements are the Ole Misses, Mississippi States, Vanderbilts and Kentuckys of the SEC. Those schools which don’t have huge alumni bases (Vanderbilt, Ole Miss) or gigantic stadiums (all of the above) or are naturally revenue generating machines will continue to be able to field top-tier programs in all sports. Each team in the conference will be competitive and recruits will want to come play against the best, week-in and week-out.
Conversely, the losers here are the “others” from the other conferences. Look, Texas, Oklahoma, USC, Oregon and Florida State are all going to be OK and remain competitive for the foreseeable future. It’s the North Carolina States, Clemsons, Texas Techs, Washington States and Colorados of the college football world that will really suffer. They will be compelled to keep up with coach’s salaries and facilities and recruitment and other spending areas or they will have to grow comfortable in the middle to bottom of the standings. And in a hyper-competitive college football landscape, it will become increasingly hard to get back to the top-tier after a program drops a notch.
The other winners from today’s distribution are the other sports. Let’s get back to the SEC Network. It’s been on the air for less than a year and it’s already available nationwide, in over 100 million homes, and is a top-5 lucrative network along with ESPN, NFL Network, FS1, and ESPN2, according to Clay Travis. Travis also says that there is a significant drop-off after those five. If you are a top baseball, softball, track, or whatever sport, isn’t it comforting knowing that you’ll be on TV across the country as a college athlete, knowing professional scouts will get to see you perform any time they want, knowing that your parents can watch you at any time?
The exposure the SEC Network brings, along with the additional revenue that athletic departments can allocate to those programs, will help the conference build entire athletic departments. Which, in turns, further amplifies the brand exposure and marketing ability of each program.
Back to the separation
The revenue sharing numbers announced today for the SEC signal a couple of things. First, the SEC is doing its part to enable the member institutions for success this coming fall. They are deftly managing the conference and continue to pay dividends – financially and otherwise – for their member institutions.
Second, the competitive balance in college football is changing yet again. In the last ten years we’ve went from divisions (Division I, Division II, etc) to FBS and FCS, establishing a clear delineation between revenue-generating programs/conferences and those that were not. Then we saw the FBS become the Power Five and the Group of Five. Now we are starting to see the separation even within the Power Five. It just isn’t logical to think that schools making 40% less per year can keep up with SEC and Big Ten schools over five and ten year spans, especially the schools that struggle to keep up even now.
Third, the television money will keep getting bigger and bigger, so the gap is likely to widen. What will the mid-tier and lower-tier ACC, Big 12 and Pac-12 schools do in this amateur athletics arms race?
Certainly there is something to be said of talent and luck equalizing money on the playing field. Upsets and tactics and heart and effort win games, but they don’t build programs. That’s what this is about. These huge sums of money will help programs establish themselves in a continually evolving stratification of college sports – highlighted by the flagship product of college football.
So, is money the root of all success? Or is it the root of all evil, as another common adage goes?
I suppose it just depends on which side of the line of scrimmage you happen to be on.
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