Are the "Big Money" Bowl Games Costing You Money?

You've probably read the articles, given that you're obviously interested in sports if you're reading this.  Team after team is having trouble selling tickets to the bowl games this year.  What you probably haven't read about, or even thought about, is how this might be affecting you.

Yesterday, the Sioux City (IA) Journal published a story that outlined the University of Iowa's ticket situation for the Insight Bowl.  (http://www.siouxcityjournal.com/sports/football/college/article_cf0d84ea-ce20-5362-8e0f-b23ceedf98c9.html)  The Hawkeyes have sold just over half of their allotment to the bowl game.  Iowa has already committed to all of those tickets.  So, after all of the bowl money has been distributed by the Big 10, the Insight Bowl will get paid for the unused tickets.  Not only that, but there are hundreds of thousands of dollars worth of travel expenses for the university and a lot of money goes into events and entertainment.

When it was all said and done at the 2009 Outback Bowl, the Hawkeyes lost $150,000.00 in unsold tickets.  They also spent over $300,000.00 to get their band to the game.  This year, the cost of the remaining tickets (averaging at a minimum of $65.00 per ticket) would be about $325,000.00 if they didn't sell any more tickets.  Given the situation at Iowa right now, I wouldn't anticipate a huge surge in ticket sales, and thus, you can estimate that Iowa will take a bath of a minimum of $200,000.00 in unused tickets.

Luckily for Iowa, it seems that the Big 10 revenue sharing takes all of this into account.  They will take home a little over $2 million when all is said and done.  (http://www.usatoday.com/sports/college/football/2006-12-06-bowl-payouts_x.htm)  Using last year's expenses (http://thegazette.com/2010/05/05/iowa-cuts-bowl-ticket-losses-by-nearly-114000/) and this year's expected ticket losses, Iowa would make a little over $500,000.00 for its bowl game this year.  What a windfall of revenue, right?

The story for Virginia Tech is not as good.  In the 2009 Orange Bowl, the Hokies suffered a loss of over $1 million in unused ticket sales.  The result?  They lost money going to a BCS bowl.  Let me repeat that just in case you didn't hear or believe me.  Virginia Tech LOST money going to the 2009 Orange Bowl.  This year, they're in danger of repeating that loss.  So, it seems that the system is set up to make the bowls money, but it really doesn't take the schools' best interests into account, right?

The Orange Bowl would argue.  The bowl likes to use past success as its measuring stick for schools making money in these ventures.  (http://hamptonroads.com/2010/12/tech-may-lose-money-again-orange-bowl)  Unfortunately, things have changed, which is one of the main reasons it is time for a change.  In the past, there were half the number of bowls.  The bowls matched-up traditional powers who travel well and teams who weren't necessarily used to going to bowl games who obviously could sell tickets to success-starved fans.  Now, with 70 teams going to a bowl every year, there is major travel fatigue.

This year, for example, Virginia Tech is matched up with Stanford in the Orange Bowl.  They're going to the bowl for the second time in three years and not playing a traditional power, which would elevate sales.  Another example of this comes from the Fiesta Bowl, where Oklahoma is having trouble selling its ticket allotment and Connecticut has only sold a little over 4,000 of its 17,500 tickets to the game.  Connecticut is almost guaranteed to take a loss on the game.

Then there's Washington.  The Huskies expect to break even on their bowl game.  Therefore, they will make the same amount of money playing in the Holiday Bowl as they did the last few years not playing in a bowl at all.  (http://seattletimes.nwsource.com/html/huskies/2013689596_uwfb16.html)

So, what does this all mean?  It means a couple of things.  First of all, some of these programs are self funded, so in theory, this wouldn't effect the overall school budgets.  Of course, Cal Berkley's athletic program is supposed to be self funded, and that's not the case there.  (http://alumni.berkeley.edu/news/california-magazine/spring-2010-searchlight-gray-areas/price-excellence)  Let's assume, though, that the self funded universities don't take from the overall budget.  What they do take from is student athletic fees, which have been rising quickly all across the country.  So, in part, the students are subsidizing the rising costs of athletics.  (http://www.usatoday.com/sports/college/2010-09-21-student-fees-boost-college-sports_N.htm)

In the other cases, when the schools are funding or partially funding the athletic departments, the tax payers and current students can be on the hook for the costs.  The rising athletic budgets and costs are paid for with higher fees, higher educational costs and bigger state budget deficits.  So, since these schools are publicly funded, it should be required that they do what is most fiscally responsible in order to save tax payers money, right?

In "Death to the BCS", it is estimated that a playoff system would generate $600 million more in revenue than the current bowl system.  That money would go directly into the schools, athletic departments and cities that those schools are in.  Tax revenue would grow.  Athletic budgets would be helped and even if conferences split the ticket and television revenue evenly, schools would be talking in the tens of millions of dollars in take home revenue.

Yet, we're supposed to believe that the current system is the best, most responsible system.  The bowls are making money.  The cities that the bowls are in get extra revenue.  The conference commissioners, athletic directors and coaches are getting bonuses.  They are all making money.

Is it at your expense?