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Perpetual Program Twilight: The Money Angle

So we opened by introducing the concept of a sort of perpetual Twilight that many schools are stuck in. This week we look at the money angle. And, no, we are not in the top programs. Lots of songs have been written about money, lack of money, owing money, and having money. Having money definitely helps with the winning thing. GO HOKIES!!!

Last week we introduced the Twilight Program series.

Queue Up Pink Floyd, The Beatles, Dire Straits, and Rush

This week we are going to look at the dreaded “M”-word. Yes, M-O-N-E-Y. That naughty no-no often not talked about in Pollyanna-ish company because the realty intrudes rudely on the dream of amateur kings of the grid iron playing for the pride of the school and leading their programs to victory against the noble foe (or cross state rival). –Hey, we aren’t talking about FCS Division III so don’t bring that dodge into this.

We are not here to debate the merits of the profit motive over the concept of the actual non-profit status of collegiate athletics. We aren’t going to deal with capitalism over some other form of brain torture. This is just an examination of a flat out truth. Money is a key factor in the championship equation. Whether it’s compensation for collegiate athletes, administrators, coaches, or future professional athletes the current iteration of the century plus existence of the NCAA is wrapped around, invested in, and married to the lure of big money.

The NCAA was founded to regulate collegiate sports by the agreement of a governing board of participating colleges and universities. (See: https://www.britannica.com/topic/National-Collegiate-Athletic-Association) One of the principle goals of the organization is the maintenance of amateurism within the membership. There is no associated legal antitrust exemption anywhere to be found, but the federal courts have been reticent to actually apply the law. (See: https://www.nytimes.com/2019/03/11/sports/ncaa-court-ruling-antitrust.html )

The problem is not new. In fact it’s part of the reason why the NCAA has been reformed and its rules rewritten over the last hundred years or so. It was just made worse by the triad of revenue flows that tempt even the most pure of amateur souls; Media Revenue, Booster Club/Foundation Funds, and Revenue Sport Gate funds. Tickets and donations (both on the books and off) have always been there, but it wasn’t until recently, with the advent of 24 hour sports networks, with multiple cable channels and conference media deals that the money amounts accelerated into the stratosphere.

Looking at Top 25 Football Revenues

Opening Note: There are hundreds of sources for the money numbers in the sports journalism world. This series isn’t about uncovering new details, but examining the reality on the ground for each of the discussed variables. We’ve been reading lots of articles, and looking at lots of numbers. The angles are all slightly different, and the numbers don’t always match from article to article and year to year. The NCAA seems only to track the Association aggregate (Billions...Billions), and no individual team revenues are listed. Those issues are for another time. What we are looking at is the impact of the size and consistency of those numbers on the ranking and championship realities for the Twilight Teams (and in particular Virginia Tech).

In an eye opening Forbes Article by their Sports Money reporter Chris Smith, the three year average revenues are laid out in a chart for the top 25 football programs. These numbers were compiled in 2019 for the article so they are for 2015, 2016, and 2017. The article is basically about the entry of Clemson as the 2nd ACC team in the top 25, and explains some of the revenue sharing aspects of the ACC Network. (This is still not a complete success due to the standoff in negotiations with NBC Sports/Comcast Sports Net, and Comcast’s unwillingness to carry the channel(s), for the bid price, on its Xfinity product.) The fact remains that television revenues are the largest driver of the college sports money flow. The total ACCN revenue sharing number won’t be known until the carrier agreements are completed.

The reality is that the ACC just doesn’t rate highly in the money game. Prior to 2019, the only top 25 ACC program in revenue was, you guessed it, Florida State. Even Miami hasn’t clawed its way back into those particular rankings. So, let’s look at the prime example of proving the case by the exception and that’s Clemson. Before Dabo Sweeny figured out his magic formula, Clemson made some money in the same realm as we did; however the non-magic of winning happened between 2010 and the present.

It doesn’t take much of a statistical eye to notice the massive increase in revenue as Clemson’s record improved. It’s struggle years between 2007 and 2010 when the rocket finally fired, Clemson averaged gross revenues of a rather pedestrian $14.2 million. Then a dramatic turnaround happened as Dabo Sweeny’s recruiting picked up and a few key star players turned the program’s win/loss trajectory around into double digit territory. By 2014, the team’s revenues were bumping up on the $20million gross level. Of course in 2015 – 2017 gross revenues exploded as repeated challenges and entries into the playoffs with one and two loss seasons mounted. In 2017 the program pushed past the $40million level. We’ll talk about some of the other implications of the money flow (Talent and NFL Draft implications) in another set of articles. Suffice it to say that as of last year the #25 team in gross revenue was pulling in $40.3 million, and that was still a huge difference between it, and the number one program, Texas A&M and number two school, Texas. Their totals pushed way past $140,000,000. Yes, you read that right… EACH program earned that from combined revenues and two different conference networks, though A&M only jumped to the SEC recently.

Now, money isn’t a guarantee of championships, but if you look at this list, you won’t have trouble finding the routine Top 15, Old BCS, and New “FakeOff” teams in the mix. Take a look at the list from the article.

1. Texas A&M / SEC

2. Texas / Big 12

3. Michigan / Big Ten

4. Alabama / SEC

5. Ohio State / Big Ten

6. Oklahoma / Big 12

7. Georgia / SEC

8. Notre Dame / Independent

9. Florida / SEC

10. Auburn / SEC

11. LSU / SEC

12. Tennessee / SEC

13. Penn State / Big Ten

14. Oregon / Pac-12

15. Florida State / ACC

16 (tie). South Carolina / SEC

16 (tie). Arkansas / SEC

18. USC / Pac-12

19. Washington / Pac-12

20. Nebraska / Big Ten

21. Iowa / Big Ten

22. Michigan State / Big Ten

23. Wisconsin / Big Ten

24. Mississippi / SEC

25. Clemson / ACC

-Data from the Forbes Article

Remember this is just football revenue. There are other athletic efforts going on at each school, and may earn some revenue, some earn a tremendous amount. Basketball is king (the ACC is still known as a basketball conference, the Big East has been left to the courts and boards, as well) instead of football in many schools.

The Virginia Tech Hokie Angle

If you want to get an idea of where Virginia Tech sits in all of this you might want to check out the USA Today article listing from two years within the range of the Forbes article for all athletic department revenues (not just football). We were 39th; even Virginia beat us at 32nd. (We lead them in other lists, though) The Forbes article might have been a bit more interesting if it had listed the top 65 programs just to see the broader picture. Notice that the complete list is not far off from the football subset, and if you also notice there are very few programs outside of the top 10 who actually make it into any real championship competition.

24/7 Sports just listed their Top 15 teams in total revenue. Not only are the names familiar they are also planted firmly in the top 20 football programs, and often vie for playoff berths. Penn State’s PennLive gives some interesting revenue figures (as in profitability) of the top 65 programs by their method. Tech runs in at a modestly profitable #30 for the 2018 season. The thing to look at is the massive disparity between that #30 position with $56.2 million and the Longhorns at $156million. No one is saying that Texas is doing particularly well despite the huge amount of profit their football program generates. Eventually they will buy a coach and perhaps join a more prestigious conference than the Big XII. Who knows? Maybe someone will bring defense to the conference and change the equation.

So, money isn’t everything, but it certainly is indicative of who is going to show up in the extra 2 games at the end of the season. It is also another example of the self-reinforcing feedback loop that generates more championship caliber programs.

It’s Not Everything but It’s Still Huge

Revenue pays for top notch coaches and complete coaching staffs, fancy facilities, top rate transportation and lodging, talent camps, and more intangibles that many people don’t want to see. Which is the off side of this since these numbers do not include booster club money, and outside undeclared fan organization funds.

Virginia Tech is improving a bit in the revenue flows, it will get its equal share of the ACC Network revenues, but we do not fill an 80.000 seat stadium weekly, and we certainly don’t have a coaching staff large enough to cover the needs of the current talent search. Our tendency to threaten to withhold checks, and follow through also has a serious negative impact. If you want to win, and you’re not, you need to open the checkbook, not close the change purse.

We exist in a Revenue Twilight… it’s looking like dawn but the day seems to be a bit longer than we’d like.

Next up PRESTIGE: Being Good, because they are ALWAYS good, even if they aren’t

GO HOKIES!!!!